In class we talked about how important inventory management was for a business and even one small mistake could harm you. Well I read a article called “Apple’s secret sauce for success is inventory management” by Victor H. In this article he talks about how Apple is the master of inventory management at the time and that is why they are the leading company right now. He mentions that the person who made this possible is not Steve Jobs but Tim Cook (Current CEO). Before Steve Jobs hired Tim Cook at Apple were doing poorly in regards on inventory management. He also says that one of the most important factors in running a successful business is inventory management. In the article it also states that Tim Cook says that each week the inventory is kept it loses 1% to 2% to its value. And the article also mentions that to keep up with the demand for a product if the sales go through the roof Apple goes on a hiring spree.

Above is the Inventory Turnover rate along with how many days it takes apple to run out of all it inventory. Inventory turnover shows how many times inventory of a company could be sold and replaced over a specific period and the higher the number the better. From the chart above we can clearly see how Apple is ahead of its competitors in inventory turnover along with how many days it takes apple to sell out of its inventory. Before reading this I thought it was Steve Jobs who orchestrated everything at Apple and people were just there to back him up if something goes wrong. But I was wrong all the fame and success belong to Tim Cook as well as Steve Jobs because without one another they couldn’t have taken Apple to the heights that its at right now.

So do you think Apple could’ve been where it’s at now without great inventory management?

In class we learned about product life cycles and how the product life cycle tells us how the product is doing in the market. A product goes through four stages in the product life cycle and they are introduction, growth, maturity, and decline. In the introduction stage the company promotes the product in order to create awareness. In the growth stage the sales and profits increase.  In the maturity stage most of the profit is earned during this stage and competitors are established. In the decline stage the sales decline and profits also go down. During this stage the company could decide to cut off the product as well.

The IPhone 4s is currently in the maturity stage and there are many competitors that the IPhone has to deal with right now. Just to name a few Samsung Galaxy S II HD, Galaxy Note, HTC Sensation 4G, and Motorola Droid. In the current stage Apple has to deal with all the competitors that I’ve listed and the market share is going down along with profits. The reason why I say that is because when it comes to technology people want to buy the latest thing and if Apple isn’t changing there phone or software for the phone then they are going to lose customers due to new technology and software on the other phones. When the IPhone first came out it was always in the growth stage because it didn’t have any competitors and the sales were always going up because everyone wanted one. But that didn’t last because competitors came out with touch screen phone that were cheaper then the IPhone. And as of right now the first IPhone is the decline stage because they no longer make them and no software updates are available as well. For the IPhone 4S to stay in the maturity it must come out with a software update. Apple is currently working on IOS 6 which is coming this fall and its going to have features that will make it easier for people who have disabilities to use the devices. Another app that got updated was Maps, which will now give you turn-by-turn spoken directions, interactive 3D view, and a new flyover feature will allow you to see major metro areas from an airplane. It will also have another new app called Passbook that will store your boarding passes, movie tickets, retail coupons, loyalty cards in your phone. Also new calling feature that will let you reply with a text message or set a callback reminder when you decline a call. And there are many other features that are going to be new or improved in IOS 6, which will set up the IPhone 4S to continue to be on the maturity stage. Another thing they could do in order to stay in the maturity stage is reduce the price of the IPhone 4S which will increase sales and profit.

 

Do you think when the IPhone 5 comes out it will stay on the growth or maturity stage as much as the IPhone 4S?

 

Sources:

http://www.apple.com/ios/ios6/