Background of Apple Inc.
Apple Inc. is an American technology company located in California. The company designs and develops software and electronics such as iPhone, Mac Pcs, and iPad. Apple also develops online services such as iTunes and Apple music. The company is multinational as it has operations in different countries. Apple buys and sells products from different parts of the world including Kenya and Mexico. Apple is one of the richest companies and manufacturers of mobile phones and consumer electronics. The company is known for its widespread consumer loyalty. Apple relies on the uniqueness of its products that has developed a strong customer loyalty. It was founded in 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne and incorporated the following year. I chose Kenya and Mexico in order to distinguish doing business in Africa and Latin America respectively.
Advantages of Doing Business in Mexico
According to the World Bank report on doing business, it is easier to do business in Colima, Aguascalientes, and Estado de Mexico states in Mexico. Mexico has continued to enjoy implementation of reforms in different states,. One of the advantages to note in Mexico is that the country has the most free-trade agreements with different countries totaling to 49 countries and 17 agreements,. This is an advantage of any company intending to export products from Mexico. Producing in Mexico would ensure ease in the exportation of Apple products into the countries with which the country has trade agreements. In addition, the country also enjoys low cost of labor. The country also enjoys proximity to North America which makes exportation costs to this region effective,. There are also existing trade agreements between North America and Mexico which make exportation easier and cheaper.
Disadvantages
The existence of trade relationship between the United States and Mexico reduces the importance and significance of setting up a factory company Mexico. It would be more efficient to export Apple products to Mexico. Doing business in Mexico also differs between states. It is also generally difficult to obtain construction permits in Mexico. There are huge differences between states and the achievements made in terms of the four indicators applied by the World Bank,. This complicates the setting up a business in a specific state in Mexico. The most efficient method of doing business with Mexico would be to export Apple products through different retail companies or setting up different retail outlets in different states in the country.
Advantages of Doing Business in Kenya
According to the World Bank report, Kenya is among the nations that have made major changes within the economy that enhance the business environment,. One of the most important steps in the development of a good business environment is that Kenya has established one-stop-shops for all government services. The government of Kenya established “Huduma Centers” which bring services closer to the people,. The move eases access to services and increased transparency in the registration process for businesses and properties. The move has also streamlined the requirement for startup businesses. This is one of the measures applied by the World Bank to evaluate the ease of doing business. Not only that, the legislature eliminated the requirement to have registration documents notarized before the commissioners of oaths through the amendments to the Companies Act 2015. This reduced significantly the complexity of starting a business,. The government also abolished stamp duty on the memorandum and articles of association. Stamp duty was also abolished on the statement of nominal capital in the year 2016. This also reduces the complexity of starting and registering a company. In addition, the country made the Lands ministry service charter available online. The move increases transparency in the process of property registration.
Apple is a multinational company that relies mainly on the customer loyalty. Kenya being a developing country that has recently moved to middle-income level presents an opportunity for the company to tap into the middle class. The company should try to establish itself in the developing countries like Kenya. In addition, the company will benefit from its established brand and the increasing improvements in the laws and regulations governing the business environment. Kenya is a mixed economy which can be considered highly capitalistic and dependent on consumption. This implies that Kenyans may be highly competitive leading to increased market for Apple products. In addition, the country has good trade relations with the neighboring countries,. This also makes exportation to other East African countries easy and effective. This is because Kenya is strategically located making it a reliable and crucial logistical Conduit in the Sub-Saharan Africa. Kenya also enjoys a proficiency in English easing official communication for Apple,. As the Supply Chain Manager, I would set up a plant in Kenya to make it the hub for Apple products in the Sub-Saharan Africa.
Disadvantages
Even though the country has made progress in the national level, the county level remains far behind. Some of the achievements made at the national level are yet to be realized at the county level. For example, the country is trying to make the registration of business easy and transparent. However, at the county level, several counties have increased the cost of registration. In addition, many counties rank bottom in some of the indicators such as enforcing contracts and registration of properties. Another problem in Kenya is the rate of Corruption. PWC reported an increase in economic crimes such as corruption in its 2016 global economic crime survey,. This implies that the company needs to develop ways through which it can work around the vise and other economic crimes in the country.
Conclusion
As the supply chain manager, I would do business with the two countries. This is because the two countries exhibit differing comparative advantage with the rest of the world. Kenya as a hub of the East African community presents a rear opportunity for setting up a factory. Apple will be able to capture the market through established brands. The company will also be able to export the products to the neighboring countries due to the good relationship with other countries. In Mexico, on the other hand, Apple will be apple to enjoy the ease of exportation into the country and can even take advantage of the high population. Doing business with both countries allows the company the opportunity to capitalize on the advantages of both economies. In addition, the company will be able to take advantage of the increasing improving reforms in the laws and regulations in both countries which make doing business easier.
Work Cited
Bokrezion, Harnet. "8 Benefits of Doing Business in East Africa (EAC)." 2015. <http://financialjuneteenth.com/8-benefits-of-doing-business-in-the-east-african-community-eac/>.
EntradaGroup. "The pros and cons of doing business in Mexico." 2017. <http://www.entradagroup.com/pros-and-cons-doing-business-mexico/>.
PWC. "2016 Global Economic Crime Survey: Kenya Report." 2016. <https://www.pwc.com/ke/en/publications/economic-crime-survey.html>.
World Bank. "Doing Business in Kenya." 2017. <http://www.doingbusiness.org/~/media/WBG/DoingBusiness/Documents/Press-Releases/Subnational/DB16-Sub-Kenya-PR2.pdf?la=en>.
—. "Doing Business in Mexico." 2017. <http://www.doingbusiness.org/~/media/WBG/DoingBusiness/Documents/Subnational-Reports/DB16-Mexico-Overview-English.pdf>.
