Christopher Daniti
Cost Administration Extra Credit
Apple iPhone 10
12/15/13

From: chrisdaniti@apple.com
Sent: Wed Dec 05 11:35:25 EST 2018
To: Timothy Cook; Accounting Dept; Sales Dept.; Advertising Dept.; Customer Service
Subject: iPhone 10 strategy
Team,
As you know we have begun production on the soon to be announced iPhone 10. Here at Apple we pride ourselves on our product differentiation strategy. Our phones are distinct from our competitors and generally regarded as superior to our competitors’ products, however in order to continue to succeed in this industry we must continue to differentiate our products so that we can continue to command a premium price. One thing that will help differentiate our product is the new eye-scanning phone unlocking system. This is similar to the fingerprint scan that we had in our iPhone 5 in 2013 that customers really enjoyed.
With the iPhone 10 our financial perspective is to increase our operating income and ensure we continue to have a price premium on our product. These measures indicate whether Apple is able to charge premium prices to achieve operating income increases through product differentiation. When considering the balanced scorecard that we’ve created for our customer perspective is focused on grabbing the majority of the market share in the smartphone industry. We also want to attract new customers. Current teenagers, our youngest customer base do not know anything other than smartphones when it comes to the cellular phone industry. They weren’t around for the flip phone era or prior to that, the briefcase sized cell phones. We must attract that demographic with our new technology while also maintaining a high customer satisfaction rating. I would like our new iPhone to be advertised in all the top selling apps in the iTunes store, as well as in all of our competitors.
The last two areas of our balanced scorecard that I would like to touch on are our internal-business-process perspective and our learning-and-growth perspective. We need to make sure our quality, design and frequency of new products are second to none. We need to always be ahead of the curve in the industry. Also, we need to attract new, talented designers while also retaining our best designers by any means necessary. Our employees should be the most educated and we want to create a working environment that they enjoy.
As you know, with turmoil in China and the wage inflation that has taken place there it is no longer profitable to outsource our manufacturing there as it is eroding our cost advantage. Because of this, the US has become a competitive player in terms of labor cost. The idea of “re-shoring”, or the renaissance of manufacturing in the US, has helped lower manufacturing costs and provides the best advantage for our company. This will help Apple, as it now plays on our old advertising strategy about how Apple products are designed in the USA, they are also now manufactured here as well. Not only will this help our customer relations, but more importantly it will help our bottom line. Our supply chain has now shortened significantly and we no longer suffer the drawbacks of an international supply chain, such as working capital costs, higher inventory and slower delivery times. Add to this our tax incentives that President Christie has put in place to bring manufacturing back to the US and we would be foolish