Introduction
Apple Inc. is an American multinational cooperation that specializes in the design and the manufacture of consumer electronic goods, hardware and software implements. This company is best known for their personal computer line, which is subscribed to by millions of loyal users. Apple company has its headquarters in Cupertino in the state of California with an upwards of 284 retail locations in more than ten different countries. The company has recently made major strides in establishing markets in foreign markets with records of great profit. Nonetheless, as it can be expected for any multinational corporation, the process of establishing itself in a foreign market has not been easy. Numerous market limitations have stood in the company’s way to acquire ground in foreign markets even when the company boasts of a history of working around such limitations. An understanding of the characteristics of a foreign market is of prominent importance in informing investment decisions. For that reason, this paper sets out to analyze and compare the operational requirements and makeup of the market in both the U.S. and India where Apple intends to establish an overseas market.
The U.S. is ranked third in the most populous nations of the world and forth in the total area. The nation has an upwards of 318 million people who are of many diverse cultural backgrounds. This contributes significantly to the nation having the best economy in the world. Even though its economy slowed due to a series of terrorist attacks, the nation has recorded steady economic development in the recent few years. What has been integral in the development of Americas economy is the role of business investment, consumer expenditure and a significant decrease in the level of unemployment. The nation reserves a strong democratic setup and an effective system of maintaining the rule of law. America enjoys massive economic and political influence over global and national policymaking.
The country’s economic systems are well developed and gain strength from a large pool of manufacturing and service industries. However, the nation is being challenged by large deficient in its budget. Currently, the United States is being faced by the challenge of an aging population, which is posing a threat to the constant supply of labor and affecting a rise in taxes. In addition, the nation is facing a challenge of increased illegal immigration. The nation has a very strong background in the field of technology with serves a critical cornerstone of the entire economy. This nation has been at the forefront of innovation and adoption of emerging technology. America has made significant progress in the field of information technology, although it is facing stiff completion from nations such as China and India.
In comparing the market of India in which Apple intends to establish an overseas subsidiary, there are some similarities and differences in the market makeup of both nations. One close examination of the economy of the U.S. against that of India, one can note a series of striking similarities in the overall market makeup. For instance, like the U.S., India, reserves a significantly large democracy and is served by a federal system of government. Like America, the nation has also had a stable economy since the introduction of industrial policies to address economic growth (Sinha, 2015). In addition, like the U.S. India is affected by a characteristically aging population and thus a threat to the supply of labor for its economic development. Other similarities include advancement and progress in the field of technology among others. On the other hand, there are notable differences between these two nations in the context of the overall factors that contribute to their economic makeup.
For instance, while a large population with a diversified cultural background characterizes America, India, on the other hand, has a significantly large population but not as culturally diversified as that of the U.S. Another difference comes in the effectiveness of the systems of maintaining the rule of law in these nations. On one hand, the U.S. has exceptionally good systems of maintaining law while India largely suffers from an ill system of maintaining the law. For this reason, India is characterized by high levels of corruption that highly challenges foreign investment (Manthri et al., 2015). Additionally, being a developing nation unlike the United States, India lacks a significant influence of both nation and international economic policies. Additionally, the rate of technological advancement and adoption can for India cannot match that of the United States considering the economy of India is far from being the best in the world.
Over the history of Apple local market, the U.S., the nation has always been open to new and foreign investment. The free market policy of the United States has, therefore, gone a long way in assisting the apple company to attain its current level of success. However, the historical context of India has not always been well coming as the nation has had some limitations against foreign investment with the aim of promoting the proceeds of domestic producers (Kumar & Thakur et al., 2015). Nevertheless, the country is slowly opening up and granting foreign investment a chance in its market. The U.S. has had a history of having interests in establishing overseas industrial affiliates and investment establishments in most of the world's developing markets. Fortunately, the last decade has seen India have a significant appeal for multinational corporations. All the same, over the history of the two nations, some factors have gradually eased the operational demands of both establishing and allowing foreign investment.
As earlier mentioned, both nations reserve federal systems of governments. In both nations, the political environments largely influence the business environment. In the U.S., the Apple Company has enjoyed significant stability due to the nation’s political stability and significantly high competence in the political space. Similarly, India enjoys a significant political stability and the government makes efforts to promote business establishment (Kathuria et al., 2015). However, constant political conflicts often threaten the stability of the nation and affect the business environment negatively. It can also be noted that the quality of democracy and the efficiency of the justice apparatus of the nation cannot match those of the United States. This is what accounts to the nation’s high records of corruption. This situation may have some implications on the smooth flow of operations for the Apple Company as it may frustrate the company’s efforts to establish itself fully in the new foreign market.
Both nations have social systems that are characteristics with promotional and limiting characteristics. Unlike in the U.S. market, the new Indian market will be characterized by significantly higher levels of illiteracy, unemployment and thus lower purchasing power. In addition, the company may encounter a limited supply of skilled labor on the account of a large populace that is not professionally competent. This would be unlike its experience in the U.S. where there is a significantly higher number of people with skills related to the operations of the company. Another limiting factor would be the apparent lack of coincidence in preference where the populace of India does not prefer some products like IPad as much the American consumers do (Arora, 2015). That along with the limitation of a lower purchasing power of the consumers may turn out to be a significant challenge.
The foreign investment venture in India may further be influenced by a set of legal factors in the company’s target market. For instance, until recently, India maintained that not more than 70 percent of the products being brought to the nation’s market should be sourced from foreign producers. In addition, a number of legislations have been implemented and enforced to protect both the interests of Indian producers and consumers while considering the impact to the nation’s economy. These legislations have certainly had an impact on the sector of business in India. For this reason, there is a high possibility that the company’s operations will be limited by such legislations as the volume of products beyond which they cannot retail to their target market. This is unlike the company’s local market where the government did not set the volume of products it could retail to its consumers. It can, therefore, be said that to a certain extent, the market of India in restive to foreign investment on the account of protecting their local producers.
Nonetheless, over the recent decades, India has made efforts and gradually risen to be ranked among the world most advanced nations in the field of information technology. For this reason, the nation reserves a strong background in the related hardware and the required infrastructure that facilitates the innovation development and use of start of the art information related technologies. Apple Inc. international will enjoy this development and has an easy time establishing the company because of readily available resources and expertise in fields related to the innovation, development, and manufacture of their wide array of products. Apple may significantly benefit with Indians drive to promote the development of information technology, for instance, India is in the process of launching their satellite into space to develop further their information technology industry (Sultan, 2015).
Conclusion
In conclusion, as revealed in this discussion, the factors that contribute to the overall makeup of the Indian and American economy have a lot in common. While there are some differences in some factors of the two nations, those differences do not negatively restrict a foreign investment venture in both nations. As established from the consideration of the main factors that determine the suitability of an international market enterprise it can be concluded that it is safe from Apple to proceed and establish itself in the Indian market. By doing so, the company will not only benefit from the nation state of the art information technology infrastructure but will also contribute to the development of the Indian market. Additionally, the company will not strain as much in adapting to the political, economic and social environment of India as the country has close similarities with the company’s nation of origin.
References
Arora, S. (2015). Micromax Informatics Ltd: Marketing strategy for emerging markets. Emerald Emerging Markets Case Studies, 5(5), 1-30.
Kathuria, R., Chowdhury, S. R., Kedia, M., & Srivastav, S. (2015). An Inquiry into the Impact of India’s App Economy.
Kumar, A., & THAKUR, Y. S. (2015). AN EMERGING OPPORTUNITY IN ORGANISED RETAIL SECTOR IN INDIA. REQUEST FOR FEEDBACK & DISCLAIMER 111.
Manthri, P., Bhokray, K., & Momaya, K. S. (2015). Export Competitiveness of Select Firms from India.
Sinha, D. (2015). The Trap of Mass-Market Thinking. In India Reloaded (pp. 4-23). Palgrave Macmillan UK.
Sultan, A. (2015). Resource-Based Competence of Apple-Based Processing Units in Jammu and Kashmir. IUP Journal of Business Strategy, 12(4), 7.
