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The case gives a brief history of the mobile payment and how Apple through its Apple Pay application has been introduced in the market. The case study presents an example of one Tag who uses this application to pay for services and goods through his Apple Watch. This innovation is expected to replace cash and credit cards, and many firms such as PayPal, Sony, and Google among others have ventured into this industry. The case study identifies some of the innovations and advancements made by Apple to curb the numerous challenges facing this innovation such as security and convenience issues aimed at overcoming negative consumer perceptions. The case study mentions that despite the multiple advancements, the company still several challenges which hinder the penetration of this application to the market. It, therefore, advocates for the need of the firm to conduct various research aimed at addressing some of the customers' concerns for better results.
Value delivery network is a portion of a firm’s supply chain that includes all its direct participants involved in sourcing, production, marketing, distribution, and customer service among other in a specific geographic location with the aim of improving the supply chain performance (Mike).
In this case, Apple is the producer since it is the one that comes up with the plan after conducting various research, sources for all the required materials and software to make the Apple Pay, and then designs the program and test it to make sure that it is effective. The firm integrates this application to their gadgets, allowing their customers to use it at their convenience effectively. Additionally, the fact that the firm introduces the product to the market and uses different marketing strategies to market for this product makes it the producer. Intermediaries, in this case, are those firms that help Apple sell this product in the market while its customers are both the Apple phones and watch users and the different firms that will take up the application.
As stated in the case study, Apple requires to engage in different partnerships to make this application successful. Such partnership includes those with credit unions, credit card issuing banks, and top national brands and retail outlets such as Best Buy and Meijer. Credit unions and banks will help make the Apple Pay effective since it will link the application to the users’ bank accounts where they can then conveniently pay for goods and services. The top national brands and retail outlets will make the application successful since they will enhance the use of Apple Pay by installing hardware that recognizes the application. The installation of the hardware will motivate people to use the application due to its acceptability in the various areas. The effective development of the Apple Pay without these two crucial players in the market will render it useless.
A market channel is defined as the integration of organizations, people, and activities that are essential for the transfer of goods ownership from the point of manufacture to the point of consumption. Some of the threats to the future success of Apple Pay in regards to the different market channels include the increased cost of marketing in the future, which is likely to increase the cost of Apple Pay. Due to the various failures experienced by other firms that have tried to adopt cashless payment methods, Apple will have to effectively market its product to create awareness and encourage customers to take up the product. This increased marketing might result in high costs making the Apple Pay costly compared to other methods. Additionally, security concern is another threat that is likely to affect the application's future since some of the marketing channels used may depict a wrong image of the product which will, in turn, ruin the product's reputation resulting to reduced sales. The use of salespersons to promote the product may affect its future success as a result of poor skills of the brand ambassadors.
From the case, one can conclude that Apple should use multiple marketing strategies to advertise for its product. As stated, most firms have ventured in this industry, but have yet been accepted in the US market. By forming the partnership with the different market players, Apple is likely to gain a high market penetration if it can address or the needs and concerns of its customers. From this analysis, I have learned on the need for firms to conduct a thorough market analysis before introducing a product into the market. Apple took time to identify some of the reasons for the poor adoption of the cashless modes of payment. From this analysis, it identified security concerns is a significant hindrance to its adoption and therefore worked towards solving this solution such as the use of fingerprint detection and ability to erase or lock the phone once it is lost. They also identify that the procedures used when buying for products through the various methods was timely and therefore came up with ways to make their application efficient by integrating the application with different credit cards. Unlike other firms, Apple is likely to enjoy a market advantage when it comes to adoption and use of this application meaning that firms should take time to study and understand the market.
Mike. "Supply Chains and the Value Delivery Network." Winstudent, 5 June 2015, www.winstudent.com/supply-chains-and-the-value-delivery-network/. Accessed 17 Oct. 2018.
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