International management has gained great popularity due to globalization. Globalization has opened the door for many business opportunities. Businesses had more options in the global network and this was the first step of many private companies to explore other markets. But this led to increased competition among the firms. The firms were to exposed to different nations, culture who were outside their geographical boundary. The company goes to do business in the international market to gain profits, make new markets, sell their products etc. As there is rise in the companies to expand their business internationally and when business start operating there are many challenges face by the companies.
Key Concepts of International Management
To do business in the international market they need proper planning, organizing their staffs, opening new offices at proper location, engaging new recruitments in the operating nation, proper marketing strategy and others. It means that International management deals with managing such affair followed by the strategy implemented within the organization. So, international management encompasses proper marketing, accounting, human resource management, service marketing to expand its business. Even there has to be proper mode of communication with the international offices and parent company.
Company Introduction: Apple
Apple Inc. is an American company based on Cupertino, California which manufactures, designand markets computer products – both personal and professional. It also produces mobile communication products. According to Thiele, Sarstedt and Ringle, (2016, p.991), the operating system which Apple uses is MacOS for computers and iOS for tablets, phone etc. Apple has a media player named as iTunes, iPod and its own browser named Safari.A digital media player produced by Apple Inc. is Apple TV and has producedother accessories like iCloud, iWork. So, the company produces different rage of technology products. These products are in high demand globally due to excellent design, software and service. Apple is a huge brand and this brand targets the urban population of any big city of a country.
The organization structure of the company:
The organizational structure of the company Apple is the most important factor or part of the company in terms of their successful innovation. This organization structure of the company can create an opportunity for Apple to enhance their growth in the global market. In the case of Apple the organizational structure can be identified as mainly a traditional hierarchy, along with few key elements from other types of organizational structure.
Culture: Basically, the company believes in innovation, so that they have the motive to think differently. This is the main culture of the organization Apple, they are different than other companies in the market.
Human resource: Along with this the leadership style as well as the human resource management part is another most important thing of Apple. In this case Steve Jobs have adopted his own innovative leadership style in terms of managing the company. The company makes small changes in their management process or organizational structure time by time according to the changes of market. The company always manages their each and every part of their business in effective strategies as well as they also have some motivation strategies for managing their employees.
Impact of global market
Every company needs to export and import products to stay in competitive global market. There are many emerging markets where it’s cheap to import products and also gain to sell the product to these countries. Apple Inc. too follows this strategy i.e. it exports and imports goods to produce and sell it products in the international market (Sojka, 2016, p.285)). This is done as labor is cheap in many countries and raw materials are available at low cost. But to do this an organization has to go through many types of customs and duties and has to pay it. This is a cost to the company. There is another international activity that becomes a problem for the organization is licensing. This licensing help big brands to spread its products in the international market at low risk. Apple too follows the norms of international laws and the regulation work in a proper way. After these activities, the company makes its marketing strategy and proper business model to increase its business.
Challenges in International Market
In spite of all these strategies one of the prime problem of global marketing and setting up of global offices is understanding the other country’s culture and sometimes the differences creates a lot of problem. So, the demographic, political, technological, economical and socio-cultural differences are the major factors of a company to do business internationally. As sighted by Peterson, (2016, p.9), when a company moves from one region to another there are many problems come in its way.
One of the main barrier is the mode of communication. The languages are different in different countries. This is challenge for any organization and sometimes creates a situation that is difficult to deal with.
Every firm has its own culture and it is different from other firms and countries. But the basic idea lies in understanding each other either from a different country or own country. This increase efficiency and competition of an organization. Apple Inc. follows the acknowledgement of an employee’s ability and a friendly atmosphere to work. The international market has uplifted the wall of the differences of culture and now a cultural diffusion has occurred.
There is custom in different countries like in Arab countries it is a not a good manner to shake hands and there are custom of greeting a person, paying respect to high official of the country and it is different in different countries. There things are need to be know before operating a business in a foreign land.
Other than culture there are other things that helps a business to understand a different country are the taxation, laws, mode of business operation, holidays etc. to name a few. To expand a business internationally it is important to grow either internally, merging or acquisition. The internal growth is the growing of the organization from the basic level and establishing itself in a new country. But a merger or acquisition means a company that is already established another country but learns the rules and regulation of a new country from the acquired unit it has merged with. This mode of operation is better to perform internationally.
Travel condition of many countries is different and sometimes it becomes difficult for an employee of high level official to visit a proper site is another problem (Parihar et al. 2016, p.113).
In case of Apple Inc. environment becomes a hindrance to market the products. For example, in case of developing nations the pricing strategies are low but in developed countries it is just the opposite. Even in the case of products Apple Inc. gives new and advanced with high level technology to developed nations while in developing nations this absent. This means that there are differences of tastes between countries and this an important strategy for a company to identify to market its products. To survive the competition the organization has to think differences of taste in different countries. Then there is technological advancement in various countries. For example, there is competition among technology in different countries like in USA and UK the technology firm is high in comparison to India. So, if Apple Inc. has to use across boarder strategy it will be different In countries like India, China and different in USA and UK. The acquisitions established in developing nations are far different in developed nations.
The product selling strategy of Apple Inc. are through retail stores worldwide, online stores and direct selling. The company also sells through third part like cellular networks carriers, whole sellers, retailers and resellers. The retail stores tat re owned by Apple itself provides a comfortable feeling to the customer and helps the customers to their best. The service of Apple is based on trust on the brand, loyalty and honesty. As per Ma and Abdulai, (2016, p.21), it is easy to replace or get a new product depending on the problem. This is known is global market as Apple Care and range of support it provides are any problem related to software products, technical assistance and there is fee based Apple care protection Plan (APP). This protection includes two or three years’ support to phone, laptop, tablet. In the global market the company has targeted the continents of Europe, South America, Asia- Pacific, Australia (Lo Dolce and Ryan, 2016, p.98).
Apple has increased its global presence. The main market is the high profile urban population of US and they use its products for home ad office. Now the business ha increased to such a level that now the manufacturing is at USA and assembling and sales are in done in the global market. Presently the company assembles and sources its raw materials from 140 nations. This has led to reduced cost as the manufacturing and labor cost due to new technological innovation. This is how Apple is entering the merging market. Apple’s emerging market is a huge market for the company. The main country is China where the major portion of the company’s sourcing and manufacturing comes from.
In case of China the environmental conditions are problem regard to the manufacturing. The Chinese government’s has planned to impose some restrictions and increase the profits of the state owned companies to 30 % by 2020.This will increase the cost of the company and the labor cost.
Solets’ discuss the marketing strategies:
According to Lilford, Harrison and Berthon, (2016, p.127), to enter a country the main ways are - licensing, exporting and importing strategies. In case of licensing discussed earlier is allow risk market entry way compared to joint venture or other alliances.
In case of regulations also licensing is a way and is less complicated and the organization face less problems in comparison to other ways of entering an international country.
The companies adopting licensing are getting more returns than any other strategic options in foreign lands. So, returns are high in licensing strategy (Langner et al. p.327). Hence we can infer that Apple Inc. follows the export and import strategy and licensing strategy to market its products globally and enter the foreign land and these are favorable for the company.
International Strategy Undertaken by Apple
As per Chaudhary et al. (2016, p.78), the important strategy that Apple Inc. uses is differentiation strategy. It’s important strategy is to deliver high customer value by newly designed and innovative products in international market. As this strategy is a tool to develop a huge market share internationally and Apple uses this strategy to make a differentiation in the offering depending on the country. But the question arises why this differentiation is needed? There are reasons that are explained below:
- We are aware of the fact that Apple products like iPod, iPad, iPhone, iTunes and others are in huge demand in the international market and this is the prime reason of differentiation strategy and has become an important strategy for an organization to market globally.
- Next is the brand value. This strategy of Apple Inc.provides brand value to the company. This is possible through differentiation strategy as it helps in developing stronger position in international markets compared to other businesses.
- The above gives competitive advantage to Apple Inc. The competitive advantage helps the company to stand in any kind of challenges and issues that other competitors like Dell Computers, Google, and Microsoft and so on gives in international market (Bhasin, 2017, p.90).
- The products of Apple Inc. are such that it is difficult to imitate . The innovative products are difficult to adopt by competitors in international market. So, imitations by rival companies and this is possible by the adoption of differentiation strategy helps. Confirmed by Investor Relations, the iPhone is Apple’s primary growth strategy in emerging economies. Apple needs to step up the efficiency of its global scale efforts as Samsung, Apple’s primary competition, continues to rise in its dominance in the global cell phone market. It should shift from a global strategic perspective into a transnational perspective.
- The new strategy adopted by Apple is highly centralized, scale-intensive manufacturing but the standardized products of the company are not allowing the company to succeed. So, the company needs to know the flexibility in different fields.
- Supply Chain management had helped the company in a great manner. The company sources the raw material of all the products from the global market and also used the cheap labor. The company is having good relations with the sources and this has helped the company grow and be innovative. One example that the company in investing a huge amount of money to a US-based sapphire company new technology. So its supply chain plays a vital role in developing the company innovative perspective and increasing the global presence.
So, we conclude that Apple Inc. follows proper international strategies, operates through legal market entry modes and follows rules and regulation in international market. We can infer that the company follows effective and efficient strategies depending on the countries as it varies from one country to another due to environmental factors. To start business globally firms has to select right Firms are entry modes by taking into consideration their advantages and disadvantages along with the demographic, political situation of country. Developing a business in one’s own country and then developing it in another country is an easy task. This task needs a lot of disciplined workforce, proper environment.
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