Monday, September 23, 2013

iPhone Trade in program.
     I chose this article about the iphone trade in program because of our in class discussions about the supply chain last week.  We talked about what happens when people return TVs to BestBuy or similar stores.  Apple now has a buyback program that allows you to return your phone for credit towards a new iphone.  A customer comes in to the store, the employee comes up with a value for the phone, and the trade-in can be completed.  I wonder what effect this has on their supply chain?
     On the surface it is fairly easy to see the benefit as a marketing tool and ploy to increase brand loyalty.  However, what happens with regard to their supply chain?  Well after a customer returns the phone, it is shipped to Brightstar corporation.  Brightstar refurbishes the phone for use in America.  I think this allows apple to cash in on the reselling market and also get more access to parts for refurbishing.  By keeping these refurbished phones in America, they are also keeping their network local, as opposed to global.  This shows their commitment to the American customer and eliminates outsourcing overseas.  I think this buyback program is a multifaceted asset.  It allows apple to take advantage of the reseller market.  By keeping the products in America, they have more refurbished phones to sell and parts to refurbish phones as well.  They eliminate a cost associated with overseas outsourced refurbishing.  It is an interesting choice and I wonder what kind of return on investment they will see from this program.

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