HomeResearch & Knowledgeback to HomeOperationsback to Research & KnowledgeApple’s supply chain transformationback to Operations

Case Study

Apple’s supply chain transformation

By Carlos Cordon and Nick Georgiev

14 pages

May 2023

Order this case study

Reference: IMD-7-2451

In 2022, Apple lost US$1.5 billion in Black Friday sales due to iPhone supply constraints. One in three retail stores across the US and Europe experienced stockouts of the new iPhone 14 Pro. China sales were down more than 30% year on year. Apple’s stock had dropped 29% in 2022. China’s zero-Covid policy resulted in massive lockdowns that made factory working conditions unbearable. In the second half of 2022, many Chinese workers quit their jobs at Apple’s Foxconn facilities. The Russia-Ukraine war that started in February 2022 and the ensuing Western sanctions spurred an unprecedented global energy crisis and double-digit inflation. Now that supply chain disruptions, component shortages and rising geopolitical tensions had become a reality, Apple had to decide on a transformation, knowing that the transition presented difficult trade-offs and would take years to complete: (1) Which elements to change in the company’s global value chain? How to approach change without hurting manufacturing continuity, product quality, revenue and profitability? (2) Should Apple further drive its vertical integration in the design of chips, semiconductors, screens and assembly? Or should it adopt the Android phone manufacturers’ model and develop a broader base of suppliers?

Learning Objective

Define Apple’s supply chain competitive advantages and dependencies
Analyze the factors driving the need for transformation and their impact
Assess the options available in Apple’s global value chain adaptation to a deglobalizing world
Evaluate the strategy and tactics for Apple’s supply chain transformation

Keywords

Operations, Strategy, Supply Chain, Value Chain, Transformation, Logistics, Offshoring, Friendshoring, Supply Chain Management

Settings

World/global
Apple, Consumer Goods, Consumer Electronics
1998-2022

Type

Published Sources

Available Languages

English

Related material

Teaching note

IMD case studies are distributed through case clearing houses. In order to browse the collection and purchase copies please visit the links below.

The Case Centre

Cranfield University

Wharley End Beds MK43 0JR, UK
Tel +44 (0)1234 750903
Email [email protected]

Harvard Business School Publishing

60 Harvard Way, Boston MA 02163, USA
Tel (800) 545-7685 Tel (617)-783-7600
Fax (617) 783-7666
Email [email protected]

Asia Pacific Case Center

NUCB Business School

1-3-1 Nishiki Naka
Nagoya Aichi, Japan 460-0003
Tel +81 52 20 38 111
Email [email protected]

IMD retains all proprietary interests in its case studies and notes. Without prior written permission, IMD cases and notes may not be reproduced, used, translated, included in books or other publications, distributed in any form or by any means, stored in a database or in other retrieval systems. For additional copyright information related to case studies, please contact Case Services.

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Best-selling Case Study

Keep reading

Article

What can we learn from Xiaomi’s monumental EV rise

Xiaomi’s rapid EV rise shows how future readiness and agility are reshaping the auto industry – a challenge traditional automakers can’t ignore.

Everything you need to know about nonmarket strategy part 2: six key steps

Following on from the ‘why’ of nonmarket strategy, Michael Yaziji sets out a practical framework to get started, with industry examples.

VARO’s twin-engine strategy on energy strikes the right balance

The Swiss-based energy group is plotting a course toward a renewables-focused future, without abandoning its traditional customer base.

Organizational Transformation Strategy Sustainability

By Winter Nie and Ivy Buche

in I by IMD

Article

LuxExperience - Luxury E-Commerce

Michael Kliger, CEO of LuxExperience, explains how the group drives luxury e-commerce growth through execution, customer loyalty, and resilience.

Strategy

By Stéphane J. G. Girod and Jana M. Arden

in I by IMD

Article

Everything you need to know about nonmarket strategy, part 1: Why do you need it?

Why do you need nonmarket strategy?

Strategy Strategy Implementation

By Michael Yaziji

in I by IMD

Article

Net ero - Political battles - How to survive

Business leaders must master the art of building strategies that take account of partisan divides over net-zero goals while progressing the interests of their company and society.

Geopolitics Strategy Sustainability

By Arturo Bris

in I by IMD

Article

Everything you need to know about nonmarket strategy, part 1: Why do you need it?

Forward-thinking leaders proactively shape their external environment, turn uncertainty into certainty, and create substantial value in the process. In the first of a two-part series, Michael Yaziji explains why nonmarket strategy is a key tool in...

Leadership Strategy

By Michael Yaziji

in I by IMD Brain Circuits

25 September 2025

Report

Voluntary biodiversity credits: A guide for business

This guide aims to help businesses navigate the rapidly evolving voluntary biodiversity credit (VBC) markets and decide whether and how to engage in VBCs. It is intended for companies that want to help halt biodiversity loss or restore and regener...

Sustainability Strategy

By Adrian Dellecker, Julia Katharina Binder, Peter J. Stephenson and Luca Fumagalli

IMD white paper, 23 September 2025

Article

A strategic thinking test for leaders - Brain Circuits

Take the strategic thinking test for leaders to assess your readiness and explore practical steps to strengthen this vital leadership capability.

Leadership Strategy

By Michael D. Watkins

in I by IMD

Article

Energy transition: how to surf the wave of change

Future-ready organizations that focus on the energy transition and accelerate along with it will reap the benefits.

Change Management Strategy Sustainability

By Julia Binder and Knut Haanaes

in I by IMD

VARO’s twin-engine strategy on energy strikes the right balance

By Winter Nie and Ivy Buche
in I by IMD

Summary

The Swiss-based energy group is plotting a course toward a renewables-focused future, without abandoning its traditional customer base.

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Organizational Transformation

Strategy

Sustainability

Browse all topics

Net ero - Political battles - How to survive

By Arturo Bris
in I by IMD

Summary

Business leaders must master the art of building strategies that take account of partisan divides over net-zero goals while progressing the interests of their company and society.

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Geopolitics

Strategy

Sustainability

Browse all topics

Everything you need to know about nonmarket strategy, part 1: Why do you need it?

By Michael Yaziji
in I by IMD Brain Circuits 25 September 2025

Summary

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Leadership

Strategy

Browse all topics

Voluntary biodiversity credits: A guide for business

By Adrian Dellecker Julia Katharina Binder Peter J. Stephenson and Luca Fumagalli
IMD white paper, 23 September 2025

Summary

Available Languages English

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Sustainability

Strategy

Browse all topics

Energy transition: how to surf the wave of change

By Julia Binder and Knut Haanaes
in I by IMD

Summary

Future-ready organizations that focus on the energy transition and accelerate along with it will reap the benefits.

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Change Management

Strategy

Sustainability

Browse all topics