With this approach, Apple can employ experienced and knowledgeable personnel to offer a wide selection of third-party hardware, software, and other accessories that complement Apple’s products. Yet Apple has full control over the customer experience, and control over a distribution strategy requires massive resources. While this is a critical part of Apple’s distribution strategy, it is also quite expensive. That is also why Apple keeps expanding its stores worldwide. Those are critical to Apple’s success as they enable Apple to deliver a high-quality buying experience for its products in which service and education are emphasized. Apple’s direct sales grew from 29% in 2018 to 38% in 2022. In 2022, Apple generated 38% from its direct channel, vs. Apple’s direct distribution strategy explained This means that when Apple makes a judgment call for its business strategy, it does that through the lenses of its iPhone sales.Īnd there is no better place to showcase Apple’s technology than its owned stores. Apple generated over $394 billion in revenues in 2022, of which $205.5 came from iPhone sales, $40 billion came from Mac sales, over $41 billion came from accessories and wearables (AirPods, Apple TV, Apple Watch, Beats products, HomePod, iPod touch, and accessories), $29.3 billion came from iPad sales, and $78.13 billion came from services. Apple has a business model that is divided into products and services. Now, when you look at Apple’s business model, its main product is still the iPhone. Apple sells its products directly via its Apple Stores. When it comes to distribution channels, companies usually use a direct or indirect approach.Ī mixture of direct and indirect channels makes more sense in many cases.įor instance, the Apple business model leverages both direct and indirect channels. Yet, why, then the company keeps such expensive stores? And what’s their primary function? Apple’s distribution strategy in a nutshell While Apple Stores are a crucial driver of its revenues, they are not a primary driver. In short, people might assume that those Apple Stores are also the primary driver of Apple’s revenues. Those impressions might also create a cognitive gap. When you walk through the urban streets of cities around the world in crowded and selected locations, you’ll find an Apple Store.įrom Piazza Liberty in Milan, Cotai Central in Macau, and Grand Central Terminal in New York, the Apple brand leaves a strong impression in the mind of its consumers. Home Pageīreaking down Apple’s distribution strategy.Digital Business Models Podcast by FourWeekMBA.Business Strategy Book Bundle By FourWeekMBA. An Entire MBA In Four Weeks By FourWeekMBA.100+ Business Models Book By FourWeekMBA.I had seen my Apple Pencil go into my infant daughter's mouth more than once, so I assumed there was a fair chance they would find water damage. If not, I would have to pay a considerable amount for a new one, although not the full amount due to the warranty. If the Pencil stopped working on its own, my new one was completely free. The only part that made me uncomfortable was that they had a hold on my credit card, pending whether or not they found any physical or water damage. Still, it was easy to package up and the label just had to be stuck on the box. I left it a little too long and ended up dashing to my local FedEx dropoff just minutes before it closed on a day close to my deadline. You do have to send the old part fairly quickly. Not having an Apple Pencil greatly reduces the functionality of my iPad, so a short wait time on getting a new Apple Pencil was excellent. I had been under the impression I would have to wait for the shipping label and packaging, send it out, see if they could repair it, then either get the same one back or have a new one sent out. I received a replacement Pencil within a couple of days, much to my delight. I chose the mail option, as I am greatly trying to limit the amount I go out right now. The agent concluded I would need a repair or replacement, and asked me if I wanted to make an appointment at my nearest Genius Bar, or if I wanted to send it in by mail. The answers were not immediate, but since I was also working, I didn't mind the wait time in between messages. The agent was able to quickly look up my device, and asked me some questions about what the problem was, what I had tried, etc. I decided to go on Apple's website, and was able to easily navigate through the first steps, trying all their troubleshooting options before finally choosing to speak with an agent over chat. My ExperienceĪs mentioned, my Apple Pencil broke within a month of purchase. Just have a simple question that can fit in 280 characters? Tweet It may take a little longer for them to get back at you, but you'll get a direct answer, and many customer service issues can be addressed at least partly through Twitter, with the process getting started without you having to visit their site.
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