Apple and COFCO Companies

Apple and COFCO Companies

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Institution

Apple and COFCO Companies

Introduction

COFCO has many subsidiaries and deals with many businesses. Some of the companies listed in Hong Kong and Mainland China include China Foods, COFCO Packaging and Holdings, COFCO Tunhe, Mengniu Dairy, and COFCO Real Estate. It is involved in the production of food products, real estate, hotels and other products. It manufactures foods such as instant foods, wines and spirits, dairy, meat products, oils, and flour products among others. Some of the non-food related business includes the production and manufacture of metal packaging consumables and garments. It has a website through which customers can shop for their products. It also deals with the sale of different properties including hotels, apartments, resorts, and commercial properties among others. The company conducts extensive research and development and it is involved in agricultural industrialization. It uses its knowledge to help farmers maximize their production (COFCO, 2012).

Apple is one of the most recognized global companies dealing with hardware and software. Its main interests lie in the design and marketing of iPhones, iPads, and iPods. The company has become recognized worldwide for its ability to create innovative, functional, and appealing products. It invests a lot in research and development, design, and marketing of its products. Customers can access and purchase products from the company’s retail stores, online stores, third party network carriers, wholesalers, as well as direct sales force (Forbes, 2014). The easy accessibility is an advantage for the company since customers can get the products they want easily. The company has managed a consistency in developing products that serve the interests and needs of the consumers. Customers are aware of what to expect when they are purchasing Apple products. Recently, the company has had to endure competition from the international market. However, it continues to hold a significant share of the market. .

Background and History

COFCO is a Chinese based company founded in 1949. It currently has more than one hundred thousand employees and it works with more than twelve million farming households. It has a diversified range of business portfolio ranging from packaging of materials and products to branding of consumer goods and trading in agricultural products. It is recognized as one of the Fortune 500 companies for many years (COFCO). Apple Inc. was the creation of Steven Jobs and Stephen Wozniak. The two of them joined forces in 1976 to create their first personal computer after Hewlett-Packard denied Wozniak’s microcomputer. The company has diversified its product range since then. It continues to design Macs and other hardware including its range of iPhone series and iPads. In addition, it now manufactures software such as OS X and iWork among others. The company has over eighty thousand employees currently.

Performance in 2014

Apple announced that it had posted revenue of $42.1 billion in the September quarterly results. The company’s net profit was $8.5 billion. Sixty percent of the revenue came from sales in the international market. The iPhone was the company’s most productive product, and it accounted for $23.7 billion of the company’s revenue in the last quarter. The improved performance can be attributed to the recent release of the new iPhone 6 and iPhone 6 plus models. The increase made up for the decreased revenue from the iPad sales (Bailey, 2014). COFCO has experienced a decrease in revenue over the past months but it has managed to grow its bottom line. The company’s total revenue fell from $329.7 million in March 2014 to $294.8 million in June. It increased its total cash and short-term investments from $375.9million to $552.3 million during the same period (Business Week, 2014).

Competitive Advantages, Historical and Current Shifts of their Market Share

COFCO has managed to penetrate into many people’s homes. People around the country are aware of the company and they recognize it among the biggest in the country. In addition, COFCO has managed to diversify its product and services portfolio. COFCO Corporation has a number of brands under its name and this has given it a competitive advantage. The wide variety of brands provides a form of protection from risks such as food safety concerns. Customers are assured of getting whatever they might need from the company. COFCO has large production facilities that enable it to manufacture many products at the same time. This ensures that the customers can always rely on the company to deliver without fail. The company deals with necessities and this ensures that it always has a ready market for its products.

Apple’s main competitive advantage is the creation of high quality and innovative products. Over the years, the company has managed to introduce new technologies to the market and this has enabled it to get new customers. The continuous creation of high quality and interesting products has enabled it to expand its market share. Its products have a wide range of functionality and this makes them appealing to many people. In addition, the company invests a lot in its design and research and development. Therefore, it has a deep understanding of what the market needs and it works to achieve this. Apple is recognized for the efficiency of its stores. It uses a minimalist strategy, which ensures that it improves on its effectiveness. The company focuses on ensuring that it provides good customer services (Thau, 2014)

History and Evolution of the Companies’ Focus on Operations and Supply Chain

Apple has outsourced the production of its products to countries outside of the US in an effort to reduce costs. Doing so has managed to help reduce the cost of operations. Locating the company in Asian countries maximizes profitability for the company because labor is cheap and it does not have to pay high taxes (Maynard, 2012). In 2012, the company announced that it would return the manufacturing operations of the Mac Computers to the US (University Alliance, 2014). Apple deals primarily with the design and marketing of its products This makes its supply chain different from that of COFCO. The company incurs more in shipping costs, as it has to transport its products from the manufacturing sites in Asia to America and other global markets.

COFCO has a fully integrated value chain. It takes the raw products from the farmers and it conducts value addition then sells it to the consumers. Some of the agricultural products are consumed in their raw form while others such as oil and rice have to go through production and value addition. The company’s expansion strategy involves mergers and acquisitions. It has joint ventures with some subsidiaries and controlling stakes in others. This has enabled it to have a controlling share of the Chinese market and to expand its operations globally. The recent acquisition is Nadera, which is a South American company. Prior to that COFCO had bought Tully Sugar, which is an Australian company (Hornby & Meyer, 2014). The mergers and acquisitions ensure that the company has enough food for domestic and international markets.

References:

Bailey, B. (2014, Oct. 20). iPhone sales drive Apple’s quarterly results. The Detroit News. Retrieved from http://www.detroitnews.com/story/business/retail/2014/10/20/iphone-apple-financials/17640985/

Business Week (2014). Cofco Tunhe Co Ltd-A (600737: Shanghai Stock Exchange): Financial statements. Retrieved from http://investing.businessweek.com/research/stocks/financials/financials.asp?ticker=600737:CH&dataset=balanceSheet&period=Q&currency=US%20Dollar

COFCO (2012). Discover COFCO: COFCO overview. Retrieved from http://www.cofco.com/en/about/c-482.html

Forbes. (2014)  Apple: Profile. Retrieved from http://www.forbes.com/companies/apple/

Hornby, L., & Meyer, G. (2014). China’s Cofco takes on global trading houses. Financial Times. Retrieved from http://www.ft.com/intl/cms/s/0/978dae32-a452-11e3-b915-00144feab7de.html#slide0

Maynard, M. (2012). Cheap labor, taxes, location: Why Apple doesn’t build products in the U.S. Retrieved from http://www.forbes.com/sites/michelinemaynard/2012/01/24/cheap-labor-taxes-location-why-apple-doesnt-build-products-in-the-u-s/

Thau, B. (2014). Apple and the other most successful retailers by sakes per square foot. Retrieved from http://www.forbes.com/sites/barbarathau/2014/05/20/apple-and-the-other-most-successful-retail-stores-by-sales-per-square-foot/

University Alliance. (2014). Apple’s process improvements make it a global supply chain leader. Retrieved from http://www.usanfranonline.com/resources/supply-chain-management/apples-process-improvements-make-it-a-global-supply-chain-leader/#.VEXHsSKUfWq