Businessmodel of Jabil Circuit

Customer Segments

Jabil has a niche market business model, with a specialized customer segment. The company’s EMS segment primarily targets firms in the automotive, energy/industrial, digital home, printing, networking/telecommunications, storage, and point-of-sale industries.

Its DMS segment primarily targets firms in the aerospace/defense, consumer lifestyles/wearable technologies, emerging growth, mobility, healthcare, and packaging sectors. Apple accounted for 24% of Jabil’s sales in 2015.

Value Proposition

Jabil offers three primary value propositions: innovation, accessibility, and brand/status.

The company places a strong emphasis on innovation. It offers some of the most advanced testing and manufacturing technologies in its industry, including  automation, electronic interconnection, advanced polymer and metal material science, automated tooling, single/multi-shot injection molding, stamping, multi-axis Computer Numerical Control (“CNC”), spray painting, vacuum metallization, physical vapor deposition, digital printing, anodization, thermal-plastic composite formation, plastic with embedded electronics, in-mold labeling, leather/wood overmolding, metal cover with insert-molded or die-casting features for assembly, seamless display cover with integrated touch sensor, plastic cover with insert-molded glass lens, and advanced testing solutions.

The company creates accessibility by offering a wide variety of options. It has acquired several enterprises and enterprise units, which has enabled it to drastically expand its portfolio of services. The additions have also enabled it to expand its presence in countries such as India, China, Spain, Mexico, Russia, and the Netherlands, making its services available to many more customers.

The company has established a strong brand as a result of its success. It bills itself as one of the world’s top providers of electronic manufacturing services and solutions. It has 100 locations in 28 countries with over 180,000 employees. In addition, it has won many honors, including the following:

• International Team Excellence Award by the American Society for Quality (2016)
• Top High-Tech Manufacturing Supply Chain Innovation Award by Gartner (2016)
• EMS Company of the Year by Circuit’s Assembly (2015)
• Gold Quill Merit Award for An Internal Communications Program by IABC (2015)
• Project of the Year Award by ISE Southeast (2015)
• Lean Best Practice Award by Institute of Engineers for its Shanghai region (2014)
• Recognition as one of Fortune 500’s Most Admired Companies (2012)
• Kaizen Award by 1MFG and the Kaizen Institute Consulting Group (2012) ### Channels

Jabil’s main channel is its sales and business development team. The company promotes its offerings through its website, social media pages, and attendance of conferences.

Customer Relationships

Jabil’s customer relationship is primarily of a self-service nature. Customers utilize its products and services while having limited interaction with employees.

The company’s website features an “Expertise Hub” that includes self-help resources such as articles, blogs, case studies, brochures, fact sheets, eBooks, white papers, infographics, and videos.

It also includes a customer portal called “Jabil Business Connect” where clients can collaborate with the firm on content and access a document library. That said, there is a personal assistance component in the form of phone and e-mail support.

Key Activities

Jabil’s business model entails designing, developing, and manufacturing its offerings for clients.

Key Partners

Jabil’s key partners are the suppliers of the parts and components it needs to manufacture products.

The company also forms manufacturing and supply chain partnerships with other firms to enhance its offerings, and educational partnerships with universities for research and innovation purposes.

A high-profile example is its alliance with the Fraunhofer Institute for Applied Optics and Precision Engineering in Jena, Germany, with whom it is working to improve camera lens technology.

Key Resources

Jabil’s main resources are its human resources, primarily the engineering employees who design and develop its solutions and the manufacturing workers that produce them.

It also depends on its physical resources, namely the 90 production plants it operates in 23 different countries, including Austria, Belgium, Brazil, Canada, China, Finland, France, Germany, Hungary, India, Ireland, Israel, Italy, Japan, Malaysia, Mexico, The Netherlands, Poland, Russia, Scotland, Singapore, South Korea, Spain, Taiwan, Ukraine, the U.S. and Vietnam.

Cost Structure

Jabil has a cost-driven structure, aiming to minimize expenses through significant automation.

Its biggest cost driver is cost of revenues, a variable expense that includes the cost of electronic components and other materials; the cost of manufacturing overhead and labor; and adjustments for obsolete and excess inventory.

Other major drivers are in the areas of sales/administration and research/development, both fixed costs.

Revenue Streams

Jabil has two revenue streams – revenue from services (manufacturing services associated with electronic equipment built to customer specifications, and design services) and revenue from sales of excess inventory.