Apple

Taking a Bite Out of a Mac Apple Loribeth Rodriguez Southern New Hampshire University Multinational Corporate Management INT-600-X2153 Robert Fouquette March 25, 2012 Abstract Apple Inc. is more than just your typical iPod, iPad, and iPhone. Their business is by far one the world’s leading top grossing and they are still making more. Since Apple Inc. was founded by Steve Jobs and Steve Wozniak in 1976, the company has escalated to being known worldwide. This paper will focus on how Apple Inc. has managed to deal with the pressure of being such a successful business in such a globalized world. It is time to take a bite out of the Apple. Introduction Apple Inc. is an American based multinational country and it specializes in designing one of the most popular products in the world, the iPod. They are also one of the world’s largest manufacturer of electronics and computer software. Since Apple Inc. was founded in 1976, it has escalated to having more than three hundred retail stores worldwide (in about ten countries) and offers their products online through their website. It is said that the company has over forty-five thousand full time employees, and over three thousand employees working worldwide. Apple Inc.’s mission statement is to bring the “best personal computing experience to students, educators, creative professional and consumers globally through innovative hardware, software and internet offerings” (Strategic Management Presentation, slide 1). Steve Jobs was the co-founder, CEO, and director of Apple Inc. Apple Inc.’s headquarters are located in Cupertino, CA and most of their manufacturing is done in China. Apple Inc. provides a wide range of technology and has surpassed Microsoft as one of the world’s largest companies. Because of their business strategy, their operational philosophy, the unique design of their products, and their marketing campaign, they have been able to achieve a distinct market position and an immense reputation worldwide. The company has loyal and devoted customers which allow the company to succeed and develop new products that will satisfy the customer’s needs. Business Strategy According to Michael Porter (1998), there are two basic types of business strategies. These business strategies are cost leadership strategy and differentiation strategy. Cost leadership can be defined as “Strategy used by businesses to create a low cost of operation within their niche. The use of this strategy is primarily to gain an advantage over competitors by reducing operation costs below that of others in the same industry”(businessdictionary.com). Differentiation strategy is a strategy that is aimed to develop products and services that are unique and well liked. Apple Inc. is now working on their differentiation strategy. They have already merged into China, so their cost leadership is not one of their main focuses because they are able to produce products at a lower price and pay their employees a lower rate. They are striving to provide excellent usage experience to its customers. They are doing this by offering innovative products. The company is using their ability to design a unique product with their integrated business and design units. The success of this company in the global market is because of their extensive focus on market research and development of its products and services. The company also involves the expansion of its distribution network. They are doing so in order to improve their global reach by providing high quality products and services to their customers. Management There human resource and management styles are recruiting, hiring, training, and retaining. To recruit they would use their online connections, they would go to universities, and they would offer internships. Their hiring process was done through online applications, then the interview process, they offered equal employment opportunity and then affirmative action. Training involves new technology and career advancement. Then there is the retaining process in which there is a fun and innovative work environment, more possibilities for career advancements, and great benefits. They also offer tuition assistance, product discounts and commuter programs which are to ensure the arrival of their employees to work. External Factors Competition: Direct Competition, which is “market situation where two or more firms offer essentially the same good or service” (businessdictionary.com). Some competition they have is Dell, Hewlett-Packard, IBM, and Microsoft. Indirect Competition, which is “competition among the suppliers of different types of products that satisfy the same needs” (businessdictionary.com). This competition includes television, video games, DVDs, CDs, just about anything that one may choose to use over using an Apple product. They have a sustainable competitive advantage. That is a “long-term competitive advantage that is not easily duplicable or surpassable by the competitors” (businessdictionary.com). Product differentiation and strategic alliances are part of their business strategy. Technology: Another external factor is technology. They have to stay on top of the industry trend and strive to be the best. With that they have to make sure their battery last longer than that of their competition, their internet capabilities have to be outstanding, and their products have to be easier to manage. Also being that they manufacture their goods overseas they have a high risk of having their ideas copied and sold for a lower price. Customers: Another external factor is the customer. One of their main fears is having the unsatisfied customers. They want to make their products with no discrepancies and easy to adapt from one another. The customers are divided into many categories. The main customers that it markets are of small and medium businesses. In order to meet their needs they utilize direct and indirect distribution channels. This includes the online sales, retail stores, and direct sales from a third party sellers. In order to maximize its sale the company is in process of expanding and improving their existing channel distribution. Strength and weaknesses Apple Inc. has many strengths and weaknesses. They have a strong cash base. They are one of the world’s top leaders in technology. They have charismatic leadership, which are “leaders who inspire and motivate employees through their charismatic traits and abilities” (Luthans, 623). They are also known for iTunes store. Apple Inc. also has many weaknesses. Some of them include lower profit margins, dividends are rarely paid, lack of succession planning, and an underdeveloped customer relationship. As for dividends being paid with the sale of the iPad 3, they have raised billions of dollars and are planning on paying back some dividends, but Apple Inc. is not sure what to do with the money. Global Expansion Apple Inc. has been under fire lately with its overseas manufacturing partners. There are articles in the news saying that they are not paying their workers their worth, that they have poor working conditions and that they have children working in their factories. According to an article Apple Inc., Made in America, Apple hired the Fair Labor Association to conduct audits in their Asian Facilities. People are not buying what they have to say. Most believe that Foxconn would just “hide the children and give everyone a new pillow prior to inspector’s arrival” (Apple Inc., Made in America). Apple has been seen as just another unethical company employing overseas laborer because they are willing to assemble Apple products at a low pay rate and then bask in the savings. What is globalization' Globalization can be defined as “A concept in which the different economies of the world amalgamate or unify with each other by reducing the barriers like tariffs of international trade, fee related to export and quotas on the imports” (Impact of Globalization on Apple Inc.). Apple Inc. has over three-hundred stores in about ten different countries. Production across the Borders Their four Ps of marketing are product, price, place, and promotion. Product is supply superior and easy to use and their innovative industrial design, another one of their major product is iTunes. The next P is price, which it is a value based and they have fixed pricing over all. The third P is place, which they use third party wholesale and online stores and they have no franchises. Finally the last P is promotion, not really many but they in 1983 had a promotion called “test drive a Mac” and they also have celebrity involvement. They offer various deals for Christmas and Black Friday. They are expanded on global basis. Apple Inc. has been able to expand their website to many countries. They change the language and offer all the same support that they offer in America all over the world. Apple uses their home base in Cupertino, California for designing and developing their products, but they outsource production of parts to various international and national supply chain partners. Source: http://htmlimg4.scribdassets.com/2kqgs0eikg12mbeu/images/10-6bf3113a6c.jpg Supplier Responsibility According to Apple’s website, Apple is “committed to the highest standards of social responsibility across our worldwide supply chain. We insist that all of our suppliers provide safe working conditions, treat workers with dignity and respect, and use environmentally responsible manufacturing processes” (Apple.com). They prohibit practices that threaten rights of workers. They have tried to take actions towards preventing underage workers, and to prohibit discrimination. Apple requires their suppliers to provide a healthy workplace. They require their suppliers to use environmentally responsible manufacturing. Their suppliers must maintain the highest standards of ethical conduct. Conclusion Apple Inc. has come and conquered the world of technology, making advancements in electronics as we know it today. Apple does not fail to impress their customers with the latest and greatest but also never fails to provide their customers with the best service possible. Not only has this company spent years dedicated to their customers, but they have also committed themselves to creating technology with the highest of standards. Apple Inc. has indicated not only to the American people, but to the world that they are here to stay. They will continue to advance our technology, bringing greater minds together to brighten our future, with a respectable work atmosphere while satisfying their customers along the way. Apple Inc., without-a-doubt, will continue to grow as a corporation and will be viewed in the ranks of the greatest corporations created. All the indications point to success for Apple Inc. and nevertheless for all. References Direct Competition, Indirect Competition. (2012). In Business Dictionary. Retrieved March 20, 2012, from http://www.businessdictionary.com/definition/direct-competition.html John, B. (2012, March 3). Apple Inc., made in America. In Managed.com. Retrieved March 20, 2012, from http://www.managed.com/apple-inc-made-in-america/ Linden, G., Kraemer, K. L., & Dedrick, J. (2007). Who captures value in a global innovation system: the case of Apple’s iPod. Irvine CA: Personal Computing Industry Center, retrieved on March 20, 2012 from http://pcic.merage.uci.edu/papers/2007/AppleiPod.pdf Luthans, F., & Doh, J. P. (2012). International Mangaement (eighth ed.). New York, NY: McGraw-Hill Irwin. Nelson, C. (2010, May 18). Strategic management. Retrieved February 23, 2012, from http://www.slideshare.net/colbynelson/strategic-management-presentation-apple-inc Porter, M.E. (1998) Competitive Advantage: Creating and Sustaining Superior Performance New York: free press Sohail, N. (2011, August 9). Globalization and its impact on Apple Inc. In Impact of Globalization on Apple Inc.,. Retrieved February 23, 2012, from http://www.scribd.com/doc/61951649/Impact-of-Globalization-on-Apple-Inc Supplier Responsibility. (2012, January 1). In Apple. Retrieved February 25, 2012, from http://www.apple.com/supplierresponsibility/