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Case Study: Apple Stores
Channel & Distribution Strategy
The Johns Hopkins Carey Business School
Instructor Richard R. Gomes
November 12, 2012
In January 2000 Ron Johnson joined Apple Computer as their new Senior Vice-President of Retail. His primary mission at the time was to design and implement a plan to create Apple’s first retail stores. Apple had become concerned that the computer industry had become too commoditized and that the industry was being dominated by a complex collection of supply chain providers including online resellers and large megastores that had led to consumers buying computers based on their price and availability. Their fear was that consumers were becoming used to determining the relative value of computer products by logistics factors that Apple had significantly less control over, rather than by the innovative features and their unique packaging that were Apple’s main differentiators. Consequently, Apple felt that it was necessary to open retail stores across the United States to reduce their dependency on “wintel” wholesalers and retailers in the supply chain and take their message of “Think Different” directly to the consumer.
The Experience: In conjunction with their brand identify of “Think Different”, Apple embarked on a retail strategy of “Shop Different”. The goal was to separate the Apple brand from the conventional retail environment for computers, and design a store setup that delivered the most complete consumer experience to its customers. This experiential approach was built around empowering consumers to be “active participants in their digital needs”, with the confidence that as consumers became more aware of Apple products by experiencing them hands-on, they would be more willing to purchase Apple products based on their unique integrated digital value proposition, rather than price or one particular product feature....