Apple Incorporation is a globally-operating company with its headquarters in Cupertino, California, in the United States. The company was founded in 1976 by Steve Jobs, Steve Wozniak and Ronald Wayne. The founders had fashioned the company for development and sale of personal computers. However, over time the company extended its operations to the production of consumer electronics, software, as well as delivery of online services. The hardware products of the company include iPad, iPod, Mac laptops, as well as the new Apple Watch. The consumer software that the company produces includes OS X and iOS operating systems. The online activities of the company include the Safari web browser, iLife, and iWork. The quarterly revenue for the fourth quarter of the fiscal 2015 was of $51.5 billion with a net profit of $11.1 billion (Apple.com, 2016). Samsung, Lenovo, and Microsoft are major competitors to the company in the production of Smartphones.
The company has been operational in most of the countries globally. iPhone is a major product in the company that is major contributor to the success of the company. Therefore, it would be significant in defining the direction of the company in the global trade. The operation of the company in global trade is usually ordered by the Apple’s global trade compliance. All the regions where the company operates must agree with the conditions set by the company. Failure to comply, the company sanctions its activities in the specific economy (Reuvid & Sherlock, 2011).
In the countries where the trade sanctions have been authorized by the company no trade in form of exportation, re-exportation, sale or supply of Apple products is allowed (Branch, 2006). For example, in regions like Syria, North Korea, Sudan, as well as Cuba Apple cannot hold its operations. These economies are under sanctions by the United States thus no American company should operate there (Linshi, 2014). The company cannot setup Apple stores and authorized resellers of Apple products in the economies.
The company has been very successful in the technology industry following the ability to develop a premium Smartphone. The company has a comparative advantage over other companies by having all the devices manufactured under one roof. The iPhone is fitted with the right accessories under one roof without the need of seeking resources outside thus professionalism and keenness in the production of the Smartphone. Also, the company has uniform devices and software, following the production by same hands. The absolute advantage of the Apple Incorporation is evident in the fact that the company can produce a range of portable devices while some of its competitors concentrate on one product. As such, Apple Incorporation manages to fetch a wider market share than any of the competitors (Helpman, 2011).
Markets and marketing
Apple Incorporation matches its business activities to market conditions through a reliable and well defined marketing mix. The marketing mix is offer knowledge on how to deal with the market conditions such as competition effectively through the high-quality iPhones, promotion for the products, as well as pricing. Apple has continued to advance its iPhone mix by developing new models of the phone from time to time. there has been a series of iPhone devices from iPhone 3, iPhone 4, iPhone 5, and iPhone 6. (Greenspan, 2015).
The company’s marketing mix involves a holistic approach to distribution by employing a number of channels of distribution. Apple Incorporation employs a selective distribution strategy, which may be restrictive to the size of the market that the company manages to reach. The places through which the company distributes its iPhones include; Apple stores, App store, authorized retailers, telecom companies as well as through fulfilment services (Greenspan, 2015).
The company emphasizes on promotional mix to promote or maintain a premium image as well as high-quality Smartphones of the firm. The promotional mix enables the company to reach more buyers. The promotional mix include advertising, personal selling, sales promotion, as well as public relations. The website of the company is a significant platform for advertising the iPhones. The company has been considerate in its pricing strategy as it employs a premium pricing strategy. The prices are relatively high in line with high quality of the products. The strategy is helpful to the company maintain high-end image for itself and its products. The price enables the company to target customers in the middle and upper classes (Greenspan, 2015).
In its marketing mix, the company is very concerned of what are the consumer needs and wants. The company produces premium Smartphones relevant for specific customers who are mainly middle and upper class. Such people require high edge smartphones with unique features that would enable them to do a lot of activities through the phone. The company has thought around the middle and high class who are the main customers by developing high class devices and branding the iPhones globally as the best Smartphone.
Also, the company has ensured convenience for the customers in buying the iPhone. The company has created massive awareness of the product through the media and the company’s website. Further, it has become convenient for the customers to buy iPhones since it is available and easily accessible on the websites, retail outlets and online selling points. The phones are delivered upon demand.
Global trade strategic issues
The company is driven to certain activities by its vision. Innovation is the vision for the company with continuous improvements and development of high-quality smartphones. The company wishes to control the technology that is being used in the production of smartphones and the company is only willing to participate in markets where it can make significant contributions (Rowland, 2015). The mission of the company is to design the best devices in form of iPhones, iPads, iPods, and Mac Book (Rowland, 2015).
It is evident that the company has remained highly influential to the smartphones industry. The company has embraced innovation and improvements of its products by engaging the production of iPhones in a series. The devices continue to change over time making it very successful and enabling it to maintain customers. For example, the link between the Apple Smartwatch and the iPhone is a sign of development through iPhone 6 (Ong, 2016).
The company defines strategies for different markets based on the level of technology and competition in other nations. However, it would be assumed that the company keeps watch of an economy and wishes to progress with the changes in the particular economy (Aim, 2012). The company should adopt unique marketing strategies depending on the market that they are dealing at a given time. The company should use the most influential media in a country at any given time to reach more customers.
In a brief SWOT analysis; the company has strength in form of awesome interfaces. The company has a powerful brand image linked with the quality and superior design for its products. The company has a well defined supply chain that ensures effective delivery of orders by customers (Rowland, 2015).
The weaknesses linked to the company include limited identification of the needs of the customers, which may make them switch to the alternatives. Also, the products are relatively highly priced locking out many customers (Rowland, 2015).
The company has opportunities in regard to the increased demand in smart phones and tablets. The company can chase the opportunity through improvements on the iPhones and iPads. Nevertheless, the company has some threats, which include competition from a company like Samsung, which is developing cheaper products with equal features (Rowland, 2015).
Operational Issues of Global Trade
In its global trade, the company has been equally sensitive to a number of procedures that would be effective on its trade. Apple has adopted overseas manufacturing operations with consideration of some advantages. Overseas operations save the company high costs of labour. The company outsources services from highly talented companies where labour is readily available (Gupta and Prinzinger, 2013).
Operating in foreign countries helps the company to fetch speedy employees who are able to deliver the assigned responsibilities within the required time. The company believes that employees from foreign countries have the required skills to offer high-quality products. For example, the company outsources most of its production skills from China (Ong, 2016). The Chinese are believed to possess better skills than the U.S citizens in the production of the Apple devices. In such countries as China, labour is readily available and there a lot of people willing to offer their skills at relatively low cost (Aim, 2012).
Also, the company has been involved in elimination of risks that come with the suppliers. The company has been effective in the elimination of the risks by engaging the suppliers in ensuring successful processes that would help in minimizing the risks that come with the procurement processes. To avoid problems in the transportation of its products, the company hires transport companies such as FedEx so as to ensure safe delivery of its products to the warehouses and the distributors (DeAngelis, 2012).
Trade Distribution Process & Transport
After the production of its devices, Apple requires its products to be moved from one locality to the other. The company ships its devices worldwide. The distribution process starts before the products are unveiled to the public. After the production is complete, the Apple devices are shipped to the distribution points around the globe. Apple does not use its name in shipping the products. For example, Apple Company uses FedEx to carry its devices from China to Memphis at the headquarters of the company (Ferrari and Heisler, 2016).
The company remains responsible of its products in the warehouse after delivery by the global courier company. The products are later distributed to the globe through the approximately 156 vendors of Apple products across the globe. The company has synchronized its data on its operations to the 246 stores that it owns globally (Ferrari and Heisler, 2016).
Risks
Apple Incorporation has a reliable distribution system for its products. The network between the carriers, wholesalers, national and regional retailers as well as the value-added resellers to ensure the product reaches customers on time. Upon cases of increased production cost, the risk is likely to arise where the company cannot revisit the agreement with the distributors as they equally deserve the right of riding on the benefits generated by the company (Eassa, 2016).
At some point, the company may discourage the resellers from investing their resources as they may get to a point where they need the finances at a point when the prices are falling and they would not be willing to sell the Apple products since they would incur a loss (Heracleous, 2013). Therefore, the apple products may face the challenge of missing in the market for a certain period.
The other risk may arise from sole sourcing. Apple obtains its components from single as well as limited resources depending on the product being manufactured. At such a point, the company is exposed to supply and pricing risks. Although, the company has tried to mitigate the risk by hiring more suppliers, Apple Corporation is unable to sustain the high number of suppliers who are willing to work with the technological company (Eassa, 2016).
Also, there would be a risk of misinformed risk through the stock market. People are usually advised to trade in the top ten companies in the market and they participate in ensuring they obtain the necessary stocks at the given time (Eassa, 2016). At such a point, the company may risk losing a lot of people who were misinformed on the best shares to buy at the particular time.
Conclusion
Apple Corporation is a renowned company globally with interests in the technology industry. The company is driven by the urge for innovation and development in the technology field. The company has competent global link with exclusive efforts in production of premium products and reliable supply chain which ensure safe delivery of products to customers. Highly competent marketing strategies of the company help in reaching its middle and high class customers at premium prices for its products. The leadership of the company has been strategic enough to maintain the company as one of the most competitive companies in the industry against companies like Samsung, Lenovo, and Microsoft.
References
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