Apple

Summary

Technology has enabled the interconnectedness of the world's operations, offering companies and countries numerous benefits (Stransberry, Anderson & Rainie, 2018). Nonetheless, the challenges of globalizing a company's operations are significant; hence multinational companies such as Apple have had to adopt various globalization and internationalization techniques. Apple Inc. is a technology business that Steve Jobs and Steve Wozniak founded on April 1, 1976. Aside from producing technological devices such as personal computers and smartphones, the company also deals in software, networking solutions, third-party digital content, and accessories (Naik & Pai, 2018). Its operations extend to Europe, the Middle East, America, Africa, and Asia-Pacific (McCarthy, 2021). Apple had a 15.6% global market share in 2022’s second quarter, and its biggest competitor is Samsung (Statista, 2022; Li, 2021). In each consecutive year from 2019, Apple has become increasingly profitable, a situation one can understand from its globalization and internationalization strategies (Macrotrends, 2022). Globalization has resulted in numerous benefits, some of which directly impact Apple. For instance, the company cheaply produces its products in China and sells them at a higher price to the customer for profit (Dudovskiy, 2021). Due to its successful operations in various countries, one can analyse Apple through political, economic, sociological, technological, legal and environmental (PESTLE) analysis. Its environment includes adherence to each country's political regulations, being affected by global economic turndowns, the need for constant technological advancement, and the aim to satisfy consumer needs (Dudovskiy, 2021). The company's innovativeness grants it a competitive edge. Apple uses a differentiation and standardization strategy to be profitable and efficient (Hiremath & Gupta, 2022). By differentiating its high-quality products Apple increases its profit margin and improves consumer loyalty, while standardizing enables waste reduction, improving company efficiency (Le & Lei, 2018; Hiremath & Gupta, 2022). Its market entry mode has been through licensing, exporting, and importing (Hiremath & Gupta, 2022). Licensing offers greater benefits than joint ventures and other strategies due to its low risk, high returns, and reduced complications regarding regulations (Khadka & Akande, 2017). A better-suited method would be a fully owned subsidiary for market entries, allowing Apple to control the core initiatives and become geographically diverse while facing fewer political and economic risks.

Apple

With the world being more interconnected through technology, various companies have expanded their operations to a global scale. The venture offers them numerous benefits and presents various challenges as well. In light of this, these companies had to become sustainable by adopting entry mode and international business strategies. One such company is the technology company Apple Inc, which began by manufacturing and selling personal computers but has now advanced into various sectors and diversified its offerings. The company's biggest competitor is Samsung, a titan of the smartphone world. Therefore, Apple's globalization and internationalization strategies are responsible for the company's success in the global market. 

Apple Background

  Apple Inc. is a global technology business with its headquarters in Cupertino, California. Steve Jobs and Steve Wozniak founded the company on April 1, 1976, under the name Apple Computers, Inc. (Naik & Pai, 2018). Apple Inc. designs, manufactures, and advertises tablets, smartphones, wearable devices, and personal computers. It also offers software, accessories, third-party digital content, networking solutions, and applications (Naik & Pai, 2018). Although the company was founded in the United States, it operates in Europe, America, the Middle East, Asia Pacific, and Africa (McCarthy, 2021). In 2022, Apple had a 15.6% global market share in the second quarter, a decrease from its first quarter's market share (Statista, 2022). Its 2019, 2020, and 2021 revenue was 260.174, 274.515, and 365.817 billion dollars, respectively (Macrotrends, 2022). These figures indicate a 5.51% and 33.26% revenue increase between 2019 and 2020 and 2020 and 2021, respectively (Macrotrends, 2022). Apple is, therefore, a successful multinational company with a vast product portfolio and significant global market share. 

Globalization

Globalization has numerous benefits, including; access to new cultures, lower product and services cost, the spread of innovation and technology, increased life quality globally, access to new economies and their markets, and access to human resources. Countries conducive to international trade often experience fast growth and have higher productivity, more innovations, and increased opportunities to help their population (World Bank, 2018). Nonetheless, globalization has adverse effects, including job insecurity, price instability, currency fluctuation, exploitation of cheaper labor markets, unequal economic growth, and the drowning of local economies (National Geographic, 2022). Globalization has also impacted Apple significantly. The company manufactures its products overseas due to cheap labor and availability of raw materials, reducing costs and inefficiencies and increasing its profit margins (Lak, 2017). The United Kingdom's (UK) economy experienced increased trade due to greater goods and services choices, competition due to price competitiveness, efficient production due to economies of scale, and increased labor mobility due to globalization (Pettinger, 2019). Overall, the pros of globalization on a country's economy and companies exceed its cons.

Concepts, Analytical Tools and Theories of International Business.

In its globalization ventures, Apple uses various concepts, analytical tools, and theories. First, the company must adhere to the regulations of the countries it operates in, such as China. Additionally, the global economic turndown reduces consumer purchasing power, reducing the company's sales (Dudovskiy, 2021). Since the company's products are sold in an open cultural environment, the company must design them to meet the needs of various cultures globally. Moreover, the company must keep improving its technology in the highly volatile and constantly changing technological environment (Dudovskiy, 2021). Apple's competitive advantage is developing innovative products with similar operating systems, applications, and software, enabling the company to reduce the risk, costs, and time required to develop a product. From the preceding, Apple Inc. has been successful due to the effective exploitation of its external environment, which has granted it competitive advantages. 

International Business Strategies

Moreover, Apple uses the differentiation strategy to differentiate its products and services overseas. To complement this strategy, the company has a standardization strategy to make it cost-effective and efficient (Hiremath & Gupta, 2022). Apple enhances its profit margin and develops customer loyalty by differentiating its high-quality goods, while standardizing makes waste reduction possible, improving efficiency (Le & Lei, 2018; Hiremath & Gupta, 2022). As part of its market entry mode, the company prefers licensing, exporting, and importing strategies in its country of interest. The company prefers licensing due to its various advantages over other strategies, such as strategic alliances and joint ventures (Khadka & Akande, 2017). For instance, licensing is low risk, leads to high returns, and ensures the company faces fewer complications concerning regulations. Nonetheless, the company should use the fully owned subsidiary entry into international markets to increase its control over the initiatives at the heart of its business and increase its geographical diversity while reducing its economic and political risks (Schellenberg et al., 2017). Although the company's entry strategies have worked for it in the past, it should consider adopting the recommendation for improved results.

In a nutshell, Apple's international success is attributed to its effective internationalization and globalization strategies. The company is a multinational technology company with various offerings in technology and software. The company's profits have increased over the years due to its high quality and innovative products. Globalization has significantly impacted Apple, enabling it to cheaply produce its goods in countries with cheap labor, such as China, and sell them for higher prices in other countries. The company's success can also be analyzed through the PESTLE analysis that paints a picture of its external environment. Combining its differentiation and standardization strategy, the company offers unique products while maintaining its profit margin. Although its entry mode is licensing, a fully owned subsidiary could prove more effective. Generally, Apple Inc. must continue evolving and adapting its strategies to fit its external environment for continued sustainability.

References

Dudovskiy, J. (2021). Apple PESTEL analysis - Research-methodology. Research-Methodology. https://research-methodology.net/apple-pestel-analysis-4/.

Hiremath, N., & Gupta, N. (2022). Marketing strategies used by Apple to increase customer base. International Journal of Innovative Science and Research Technology, 7(7), 1293-1297. https://ijisrt.com/assets/upload/files/IJISRT22JUL940.pdf.

Khadka, B., & Akande, S. (2017). Market entry strategy (Bachelor´s). Oulu University of Applied Sciences.

Lak, R. (2017). Globalization with Apple - Technology and operations management. Technology and Operations Management. https://digital.hbs.edu/platform-rctom/submission/globalization-with-apple/.

Le, P., & Lei, H. (2018). The effects of innovation speed and quality on differentiation and low-cost competitive advantage. Chinese Management Studies, 12(2), 305-322. Doi: 10.1108/cms-10-2016-0195

Li, Y. (2021). Apple Inc. analysis and forecast evaluation. Proceedings of Business and Economic Studies, 4(4), 71-78. Doi: 10.26689/pbes.v4i4.2389

Macrotrends. (2022). Apple revenue 2010-2022 | AAPL. Macrotrends.net. https://www.macrotrends.net/stocks/charts/AAPL/apple/revenue.

McCarthy, N. (2021). 20 years on: The global Apple store empire. Forbes. https://www.forbes.com/sites/niallmccarthy/2021/05/14/20-years-on-the-global-apple-store-empire-infographic/?sh=317e39494b26.

Naik, T., & Pai, V. (2018). A study on products and services of Apple Inc. International Journal of Case Studies in Business, IT, And Education, 2(2), 67-76. https://doi.org/10.47992/ijcsbe.2581.6942.0044

National Geographic. (2022). Effects of economic globalization. Education.nationalgeographic.org. https://education.nationalgeographic.org/resource/effects-economic-globalization.

Pettinger, T. (2019). Effects of globalisation on the UK Economy - Economics Help. Economics Help. https://www.economicshelp.org/trade2/globalisation_uk_economy/.

Schellenberg, M., Harker, M., & Jafari, A. (2017). International market entry mode – A systematic literature review. Journal of Strategic Marketing, 26(7), 601-627. https://doi.org/10.1080/0965254x.2017.1339114

Statista. (2022). Apple iPhone market share 2007-2022 | Statista. Statista. https://www.statista.com/statistics/216459/global-market-share-of-apple-iphone/#:~:text=Market%20share%20of%20Apple%20iPhone%20smartphone%20sales%20worldwide%202007%2D2022&text=Apple%20claimed%20a%2015.6%20percent,market%20share%20of%2021.8%20percent.

Stransberry, K., Anderson, J., & Rainie, L. (2018). The internet will continue to make life better. https://www.pewresearch.org/internet/2019/10/28/4-the-internet-will-continue-to-make-life-better/

World Bank. (2018). Stronger open trade policies enable economic growth for all. The World Bank. https://www.worldbank.org/en/results/2018/04/03/stronger-open-trade-policies-enables-economic-growth-for-all#:~:text=Trade%20is%20central%20to%20ending,more%20affordable%20goods%20and%20services.