Apple Globalization - Coggle Diagram
Internal Apple sources claim that Apple is dedicated to using as much renewable energy as possible in its buildings and data centers and that the company is constantly working to lower its carbon footprint
Today, all businesses must comply with the regulations and guidelines set by governments and NGOs addressing ecology and the environment. Apple is not exempt from these strict regulatory requirements, which sometimes harm businesses’ economic success.
Apple’s financial and economic performance is impacted by fluctuations in the exchange rates of major currencies worldwide.
The global market of new digital technologies is marked by an increasingly high competitive intensity. Being the number one company in the world is not easy, but staying on top for a long time is even more difficult.
Apple’s various products face fierce competition, especially from Chinese and Korean companies (Samsung, Sony, and Huawei).
An economic crisis now marks the global economic environment due to the negative impacts of the Covid-19 health crisis on the purchasing power of consumers and the economic growth of companies and countries. Apple is no exception.
Another huge opportunity lies in the constant desire of consumers to equip themselves with electronic products. We are seeing an increased global consumer appetite for innovative electronic products: intelligent cars and smart appliances. Etc.
Thus, Apple can easily convince consumers of the added value of these innovative products.
The characteristics of Generation Z, also called digital natives, represent a considerable growth potential for the Apple brand. Generation Z is very demanding and zealous, constantly looking for innovative solutions and new experiences. So, this can be a potential threat to the sustainability of Apple company.
As a result of the political and economic war between China and the United States, the U.S. government has set high taxes on imports from China, which has increased the overall cost of imported Apple products.
Europe also has conflicting relations with some large companies in taxation, especially with the GAFA (Google, Amazon, Facebook, and Apple) - severe threat to the Apple brand because it could face obstacles to marketing and distribution in the countries of the European Union.
Current and future political conflicts between these two big countries (CHINA & AMERICA) may negatively impact Apple’s margins and business performance. Many of Apple’s sales come from the Chinese market.
The Apple market is characterized by rapid technological advancement. In the world of new technologies, technological acceleration represents an excellent opportunity for companies wishing to make the most of technology.
Apple is an excellent example of this with its innovative products. In short, Apple operates in a market where innovation is widespread and rapid.
It can be both a threat if the company misses a significant innovation and also a great opportunity if, on the contrary, it is at the origin of this innovation.
The growing use and rapid evolution of computers are vital elements in the development of the American company.
Because most emerging countries neglect intellectual property and industrial property laws, many users consider the counterfeit device a poor-quality product manufactured by Apple.
Due to the rising importance of user privacy, the increasing smartphone tracking poses a possible severe risk to smartphone manufacturers like Apple.
Due to Apple’s presence in worldwide markets, company management has to consider the rules and regulations of each country that Apple is targeting. New consumer data and information protection rules, particularly in European countries, also apply to American brands.
Apple could control the tracking that programs do with users thanks to the iOS 14.5 update released this year. We may conclude that by meeting the needs of its customers, the Apple brand was able to take advantage of this potential threat. We should also notice the rise in class action lawsuits against Apple recently. These acts negatively impact the company’s sales, reputation, and brand image.
Efficient Supply Chain Management
Taiwan, United States, Japan, and China are some of the countries that contribute in manufacturing the component of Apple's products.
For example, in 2018, Foxconn, one of Apple’s oldest and largest suppliers, had 35 supplier locations servicing Apple from Taiwan, China, India, Brazil, Vietnam, and the United States, and 29 of its 35 locations are in China.
Globalization allow Apple to manage its supply chain within global. Hence, Apple has more than 200 suppliers in the world to manufacture the component of product.
Globalization encourage Apple to do research and development from time to time in order to provide a better choice for customers compared to competitors.
For example, Apple develops its operating system named iOS. And, Apple is continuously implement research and development to differentiate Apple with other brands.
Lower Cost of Production
In its domestic country, the manufacturing costs is very much due to the laws and taxes. Apple currently pays approximately 2 percent on its overseas profits, but that would increase to about 35 percent for U.S.-made phones. Hence, by entering global market, Apple can reduce its production cost.
Globalization allow Apple to operate its factory in other country with lower cost like cost of raw material, labor cost or taxes imposed.
For example, China only require much lower cost than American counterparts. Hence, Apple can design their product in California, USA while manufacturing their products in China and other resources will come from different parts of the world.
Also, it is proved that the operating software of iPod written by engineers in India are cheaper than their American Colleagues. Besides, the labor wages in India are approximately 25% the cost of labor in China. By globalization, Apple can manufacture iPhones in India since they have the experience and skill to quickly learn the manufacturing process especially during peak seasons.
Increase Market Share
Apple has made the most significant gains in the smartphone market share over the past year as competitors struggle to catch up due to involve in globalization.
Apple's estimated global smartphone market share surged 20% between 2021 Q1 and 2022 Q1, from 15% to 18%. Apple's competitor, Samsung, has recorded the second-highest growth in market share at 9.09%. Hence, Apple is leading in market dominance growth.
An organization that provides its goods or services to customers in all areas of the world
Apple operates through the following geographical segments: Americas, Europe, Greater China, Japan, and Rest of Asia Pacific.
United Arab Emirates
Apple is using standardization strategy and treats the whole world as one market and provides the same kind of products and services to everyone.
Products from Apple are frequently in high demand. The company continues to offer high prices for its products, and despite its best efforts to boost supply, there is still insufficient inventory to meet demand.
Apple has been able to maintain a consistent increase in demand for its products in part by expanding its product portfolio and introducing new models of its brands on a regular basis. Consumers are typically left excited and looking forward to the product's annual launch as a result of this.
Apple usually records demand increase of about 7.2% each month for about 4 months once it launches new brands or new models of its smartphones. The 7.2% increase translates to an average of demand for about 5 million units of quantity demanded.
Aggressive competition involving large multinationals
For example, Apple competes with firms like Samsung, which also uses rapid innovation.
Tough competition in the technology industry is partly because of the aggressiveness of firms.
aggressive competition has a limiting effect on the business, indicating the necessity for strong fundamentals for maintaining competitive advantages in computer software and hardware, and online services.
imitation from other companies and compete with lower price
Apple faces the threat of imitation of some products, such as the iPhone. Local and multinational firms could imitate the design and features of Apple’s products.
Apple is applying premium pricing strategy so it has the weakness of sales dependence on high-end market segments. High prices attract customers from the middle- and high-income brackets, but may prevent customers from low-income brackets from easily purchasing Apple’s consumer electronics.
RIsing Labour Cost
An increase in the cost of labour in the various countries where the company maintains production facilities
Rising labor costs involving contract manufacturers, such as those in China, reduce profit margins or push selling prices even higher.
One of the most well-known brands is Apple. Apple moved their emphasis from having superior products to having a superior brand. It doesn't matter what they are making; what matters is how we feel about their business.
Apple was the first to introduce some of the most innovative products that have changed the world such as iPods, iPhones, iPads, and Apple Watch.
What drive Apple be globalized?
International doorways have opened through other business adventures because of Apple’s devices being extremely manageable and accessible. Steve Jobs understood the critical importance of Apple’s technology creation which allowed the company to venture into foreign markets such as China.