Risk Mitigation Strategies in Apple Inc. - A Case Study Analysis

This case study analyzes Apple's implementation of risk mitigation strategies to address various identified risks including competition, manufacturing, and inventory management. With increasing competition from companies like Samsung in the smartphone market, Apple focuses on maintaining its brand loyalty through innovation as a primary strategy against competitive threats. The complexity of Apple’s extensive distribution network poses challenges for inventory management; thus, supply chain segmentation and optimal inventory practices are suggested to mitigate these risks by reducing waste, costs, and obsolete stock while consolidating production facilities. Manufacturing risks arise due to Apple's reliance on third-party production, which lacks direct monitoring control. To counter this, the study recommends a comprehensive digital supply chain information framework along with electronic tagging of products for enhanced oversight. Additionally, diversifying suppliers and incorporating user feedback in new product designs are advised to minimize manufacturing dependencies and improve overall risk management.

Running Head: RISK MITIGATION STRATEGIES 1
Case Study
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RISK MITIGATION STRATEGIES 2
Risk mitigation:
Risk mitigation could be defined as the strategic approach for developing alternatives
and actions that could subsequently provide reduction of threats alongside improving the
opportunities for accomplishing the objectives of a project (DuHadway, Carnovale & Hazen,
2017). Apple Inc. has created a niche for itself in the electronic products market with
formidable dominance in the sectors of personal computers as well as mobile devices such as
the iPhone, iPod and iPad. However, the recent trends in the domain of technology have
provided impetus to other companies to access a substantial share of the smartphone market
especially observed from Samsung. Therefore, Apple Inc. has to implement appropriate risk
mitigation strategies for tackling the identified risks in the report such as competition,
manufacturing risks and inventory management.
Competition:
The strategies that could be adopted by Apple for addressing the risk of competition
can be observed in branding. Branding is considered as an effective resource to develop a
favourable relationship between customers and the brand thereby emphasizing on the
outcomes of customer loyalty (Giannakis & Papadopoulos, 2016).
The aspects of Apple’s branding include a unique brand identity developed by the
company over the years which is also responsible for acquiring a large share of customer
loyalty (Malhotra, 2015). However, customers that depict loyalty to the brand should also be
provided with the necessary advantages in terms of innovation which could be accounted as a
primary strategy for Apple to mitigate the risk of competition.
Inventory:

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Inventory management has become a major risk for Apple owing to the diverse
manufacturing activities and market position of the organization. The complexity of the
inventory system and the extensive distribution network of the organization create potential
setbacks for implementing a risk mitigation strategy (Verner et al., 2014). Therefore, the risk
mitigation strategies could be observed in the form of supply chain segmentation and
introducing optimal inventory management practices.
Some of the promising outcomes that can be derived from this risk mitigation strategy
refer to reduction of waste and inventory costs, streamlining of inventory processes and
elimination of obsolete stock. Outsourcing of production facilities and implementation of a
single warehouse in the USA are accountable as formidable features of the supply chain
management of Apple Inc which provide risk mitigation for inventory management related
risks.
Manufacturing:
Another profound risk that has been identified in the case study of Apple Inc. refers to
manufacturing risks. The manufacturing of Apple is outsourced in order to obtain effective
inventory management. The risk is observed due to the lack of monitoring and control
privileges of Apple over the third parties involved in production, logistics and transportation
management (Verner et al., 2014). The implementation of a comprehensive digital supply
chain information management framework as well as electronic tagging of merchandise could
assist in improving the control of Apple over its production aspects.
The organization should also expand its supply chain in order to reduce dependency
on a single supplier thereby limiting the manufacturing risks. The introduction of new
products should be associated with the prospects of feedback and follow-up regarding the
product design and features. The user oriented value of the organization should be sustained

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in all products of Apple Inc. in order to address insufficiencies observed in manufacturing
aspect of the organization.
References
DuHadway, S., Carnovale, S., & Hazen, B. (2017). Understanding risk management for
intentional supply chain disruptions: risk detection, risk mitigation, and risk recovery.
Annals of Operations Research, 1-20.
Giannakis, M., & Papadopoulos, T. (2016). Supply chain sustainability: A risk management
approach. International Journal of Production Economics, 171, 455-470.
Malhotra, Y. (2015). Cybersecurity & Cyber-Finance Risk Management: Strategies, Tactics,
Operations, &, Intelligence: Enterprise Risk Management to Model Risk Management:
Understanding Vulnerabilities, Threats, & Risk Mitigation (Presentation Slides).
Verner, J. M., Brereton, O. P., Kitchenham, B. A., Turner, M., & Niazi, M. (2014). Risks and
risk mitigation in global software development: A tertiary study. Information and
Software Technology, 56(1), 54-78.