SCMluxe for premium products - a lesson from Apple

I bought an iPhone...yes, not a "smartphone" but an iPhone. So what makes this difference between Apple products and its competitors? The difference is in the strategies of SCMluxe that Apple uses more in parts than in its entirety. Does this make Apple product luxe or even premium? - not really (the Vertu could be one), but it does show that some of SCMluxe strategies could work very well for non-luxe products.

Lets see what Apple does and does not do, that makes it so successful vis a vis other competitors:

SCMluxe Strategies:

1. Distribution is controlled and in-house with almost no external contractors/wholesalers or even retail points. Notice the long queues outside Apple iStores every time a new product is released....the deliberately restricted volumes of first sale, hype before release and carefully constructed point of sale experience
2. The iStore experience - unlike its competitors the point of sale for Apple is an extension of the brand and its carefully managed to convey their messaging across all the stores especially in the iconic stores in London's Covent Garden or New York's Fifth Avenue. The retailing is very much done in high streets with expensive decor and location just like all luxury goods stores
3. Product quality - is another factor that Apple scores over its competitors. The design and quality makes no allowance for mediocrity (or the customer, for that matter). And like all self respecting luxury goods companies makes no allowance for the convenience of the customer (the BMW experience in leg space in earlier posts) - note the requirement for Apple customers having to lug the product to an iStore every time one has to replace its batteries instead of being able to do it at home. No other competitor actually would dare inconvenience its customer this way
4. Design - is the soul of Apple and is kept not only in-house (and in the country of origin, USA) but kept fiercely guarded with heavy investments/budgets
5. Pricing - though the price of its products are only nominally higher than its competitors, Apple strictly follows the no-discount or sale policy of SCMluxe

Non SCMluxe strategies:

1. Production/Manufacture - is almost completely out of its country of origin with a supply chain spreading across global low cost locations (mainly China)
2. Traditional mass production conveyor belt production systems - almost no artisanship or manual craftsmanship involved or communicated
3. Broad based customer segment not exactly targeting the high end luxury customer

Surprisingly this unique mixed up strategy works for Apple remarkably well and there are lessons to be learnt from it - the most important one being that SCMluxe components work for non-luxury products too. Only one must carefully analyse and see where and what components will work for the premium/mass premium product that one is considering the supply chain strategy