With so much press speculation about a double-dip recession being imminent, I cannot help getting sucked in by headlines that may offer a clue on what\u2019s to come economically. Such was the case today when I saw the headline \u201cIs Apple Fearful of a Consumer Slowdown?\u201d<\/p>\n
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That headline actually scared me. After all, if Apple is scared of the short-term economic prospects, certainly investors will be spooked and the stock market will tumble (again).<\/p>\n
What I expected to see when I read the associated article was some information about how Apple executives are viewing the short-term economic situation. There was nothing of the sort. What I did see, but didn\u2019t expect to, was a tie-in with Apple\u2019s supplier and competitive strategies.<\/p>\n
You see, the article did not cite any sources within Apple regarding the electronic device manufacturer\u2019s take on a possible economic slowdown. It merely said that a third party analyst reported that \u201chas slashed orders to its Asian suppliers of iPad parts by 25%.\u201d<\/p>\n
While outsiders have interpreted this to mean a variety of things \u2013 including the possibility that consumers are hunkering down in the face of a bad economy \u2013 one of the industry experts thinks that it\u2019s merely a matter of Apple\u2019s supplier and competitive strategies being deployed \u2013 an observation he calls the \u201cbad-ass competitor hypothesis.\u201d<\/p>\n
So, what is the \u201cbad-ass competitor hypothesis?\u201d<\/p>\n
The article describes it as \u201cApple purposefully over order[ing] parts to lock out competitors. Then late in the quarter they scale back knowing it\u2019s too late for rivals to react and too bad for suppliers who wouldn\u2019t dare mutter a bad word about their sugar daddy.\u201d<\/p>\n
While very few people know whether or not this is true, it\u2019s undeniably interesting. It if is a tactic being used by Apple, it\u2019s a good example of procurement being deployed in a strategic way: to keep competitors at a disadvantage.<\/p>\n
I hope that, if Apple\u2019s order reduction is true, it is because of this competitive strategy instead of a recognition of softening consumer buying power. I also would love it if such reason for the order reduction became public knowledge so that investors could rest easier.<\/p>\n
The last thing anyone\u2019s stock portfolio needs is a good business strategy to be misinterpreted as a harbinger of more economic struggles.<\/p>\n","protected":false},"excerpt":{"rendered":"
With so much press speculation about a double-dip recession being […]<\/p>\n","protected":false},"author":12,"featured_media":4095,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-3113","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-procurement"],"yoast_head":"\n