Apple Inc. designs, manufactures and markets a wide range of personal computers, computer software, and portable music devices. Some of these Apple products include the Macintosh, iPods as well as the iPhones. Apple’s strong value chain is one of the reasons for its success today. Its’ efficient and strong value chain has allowed the company to expand globally with a strong presence in 102 countries. Furthermore, Apple has joined in the process of reintermediation, adding an online store and more resellers into its distribution channel in order to reach more consumers and to boost its sales and profits (Kevin L. Webb, 2001).
Fueled by globalization and opportunities presented in the emerging Asian markets, Apple recognises the need to enter into these new geographical areas. Based in California US, the vast geographical distance has made it expensive for Apple to use a direct distribution method to open up a flagship store in Singapore. Moreover, The Singapore market is unique and requires a different managerial expertise. Therefore, to enter into the Singapore market, Apple has used the multi channel strategy to develop its channel distribution. Apple believes that by using multiple intermediaries, its channel members will be able to do a better job in customizing to Singaporeans wants and needs, as they understand the local market better. In order to be successful in building its brand presence in Singapore, Apple has carefully and selectively chosen suitable distributors, retailers and service providers whose firms’ objectives and strategies are consistent with Apple’s.
APPLE SINGAPORE CHANNEL STRATEGY & DESIGN
Selling highly standardized products, Apple Singapore distribution channel is able to go through a relatively wide and long distribution structure.
Being a huge company with the necessary resources, Apple has a high reward power to encourage and motivate them its channel members. Adding on, Apple also has the coercive power to substitute its channel members easily since there is an abundance of entrepreneurs wanting to jump on the “Apple phenomenon”. However, channel members has a greater referent power as Apple relies on these resellers to a certain extend (because it has its own online store) to reach out to consumers in Singapore. But in terms of legitimate power, Apple has a higher influence on its channel members because of its tightly control and developed distribution design. All in all, Apple has a relatively high degree of flexibility in choosing its channel members and has a high power base, allowing it to have a high degree of control over its channel members.
Apple carefully accessed and selected two local distributors, whose objectives and strategies are inline with Apple’s overall image and objectives. Apart from that, these two distributors are also chosen because of their stable credit and financial capabilities to hold many of its products in their inventory during heavy selling season (E.g. IT Fairs) to assure timely availability. Moreover, their management abilities, wide market coverage as well as their well-known reputation in distributing other companies’ products in Singapore affirmed Apple’s choice of selecting them as Singapore Apple distributors.
Apple recognises the importance for its consumers to experience the tangible access of its products to facilitate learning and discovery in the retail stores hence, there is a need for Apple to have a high degree of control over its resellers. In order to have this high degree of control (in terms of formulation of the store design, merchandising, providing impeccable services and inventory of no competitors’ products), Apple has differentiated its resellers by creating the Apple Premium Reseller Program (APRP). Even though Apple...