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    Apple international strategy

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    Apple international strategy


     Introduction

     
    The multinational typology of Bartlett and Ghoshal indicates there are two forces or pressures acting on firms competing in an international market setting (Harzing, 2000). These are the force represented by local responsiveness that considers if customers in different countries expect a product is adapted to local requirements and their needs, as well as if local domestic competitors have a potential advantage due to their ability to be more responsive (Harzing, 2000). The second force represents global integration that asks the importance of product standardization that aids a firm to operate in an efficient manner represented by economies of scale, and a consistent approach to global branding requirement to achieve success in the international stage (Harzing, 2000). 

    These two forces will form the basis for the analysis of the following models and theories along with information on Apple which will be utilized to delve into these aspects:

    a) Apple business strategies that address MNC typologies of Bartlett and Ghoshal represented by and analysis of Apple’s corporate level strategies

    b) Mintzberg’s Plan, Ploy, Position, Pattern, and Perspective that delve into aspects of Apple’s corporate level strategies

    c) Global value chain analysis for Apple that will look at its local responsiveness and product standardization under Bartlett and Ghoshal typologies.

    These aspects have been chosen since they delve into the core of Bartlett and Ghoshal typology as represented by the two forces mentioned.
     
    Apple business strategies 
    This aspect of the analysis looks at MNC typologies represented by corporate level strategies. In Apple’s case, it represents the global model under Bartlett and Ghoshal’s typology is shown below:
     
    Table 1 - Bartlett and Ghoshal’s Typologies of Multinational Companies
     
     
    Apple’s centralized operational approach means product and marketing decisions are made and controlled at its global headquarters in the United States (Apple, 2016). This is because its products are standardized for international markets (Yoffie and Kim, 2014) with the adaptation representing customizing the software in terms of language and the cultural nuances regarding phases for accessing features and functions (Davis et al, 2012). This gives the company the advantage of being able to achieve economies of scale regarding the most costly aspect of its products (materials, sourcing and manufacturing), whilst being able to customize products to country markets represented by language, and the cultural nuances of language interpretations for accessing functions and features through software adaptations (Hovivian, 2018). This is stated in Apple’s 2018 annual report as “The Company believes … sales of its innovative and differentiated products and services are enhanced … software integration and demonstrate the unique solutions that are available on its products” (Apple Form 10-K, 2018, p. 4).

    The above addresses the first force represented by local responsiveness in terms of customizing the software to meet the particular expectations of customers in different markets. This is clearly defined in its 2018 annual report under business strategy that states “The Company’s business strategy leverages its unique ability to design and develop its own operating systems, hardware, application software and services to provide its customer’s products and solutions with … superior ease-of-use and seamless integration” (Apple Form 10-K, 2018, p. 1). These points have been brought forth to emphasize Apple’s commitment to servicing international markets and meeting customer expectations in terms of utility, along with economies of scale.

     
    In terms of analyzing Apple under Bartlett and Ghoshal’s typology, it is important to note that the company has carefully selected the countries it enters in terms of its products to break into regions (Business Insider Intelligence, 2016). This was particularly the case for the iPhone which spearheaded Apple’s expansion to more market in Africa and the new countries in the Middle Easr due to its multi-functionality (Medhat, 2015). It also needs to be noted and remembered throughout this analysis that Apple has always take the position of not adapting to customers (Hovivian, 2018). This is a unique perspective for a customer-centric company as Apple thinks of and innovates products based on new directions in the market that delivers products customer did not know they wanted (Hartley, 2018). This was the case with iTunes, the iPad, the iPod and iPhone. Steve jobs revealed this insight in a comment to Business Week in 1998 where he stated “A lot of times, people don’t know what they want until you show it to them” (Mui, 2011, p, 1)
     
    Mintzberg’s Plan, Ploy, Position, Pattern, and Perspective
    This model delves into a further analysis of Apple’s corporate level strategies using Mintzberg’s 5P’s (French, 2009). Its reference in terms of Bartlett and Ghoshal’s typology refers to both force aspects (local responsiveness in terms of product adaptation using software to address their expectations, and global integration where its branding approach has enhanced its international image). Mintzberg’s stated his theory was devised to aid in the development or analysis of the varied operational facets of a company regarding its strategy (French, 2009). In this instance, Mintzberg’s 5Ps was utilized to delve into analysis areas to aid in the furthering of the understanding of Apple’s approach to Bartlett and Ghoshal’s typology.
     
    The following provides the application of the 5 P’s for Apple:
     
    Plan
    Apple plans and innovate the consumer electronic products it develops based on attention to years of understanding consumer preferences that focus on excellent operational functions and high user utility ease of use (Montgomerie and Roscoe, 2013). This refers Bartlett and Ghoshal’s local responsiveness force (Hartzing, 2000).
     
    Ploy
    Apple has always used an innovative approach to product and software design to achieve a competitive edge (Pisano, 2015). This represents the company being mindful of the importance of local responsiveness (Bartlett and Ghoshal ) it addresses on a country and international level (Hartzing, 2000).
     
    Pattern
    The company utilizes prior innovations it has developed in the past to build on them for new products to enhance product acceptance by making changes in part for products rather than wholesale change (Cooper, 2011). This falls under Bartlett and Ghoshal’s local responsiveness force (Hartzing, 2000) as it permits customers to easily use new product features since a level of familiarity is always present (Hartung, 2016).
     
    Position
    Apple has made a niche in each of its product and service markets as a premium brand that represents high-end products and services (Copper, 2011). This falls under the second force of Bartlett and Ghoshal’s consistent approach to global branding (Hartzing, 2000).
     
    Perspective
    The company’s core business value is based on innovation and thinking differently which is engrained into its culture (Copper, 2011). This falls under Bartlett and Ghoshal’s consistent approach to global branding (Hartzing, 2000).
     
    The above 5 P’s are reflected in Apple’s business strategy as contained in its 2018 annual report that stated “The Company’s business strategy leverages its unique ability to design and develop its own operating systems, hardware, application software and services to provide its customers products and solutions with innovative design, superior ease-of-use and seamless integration” (Apple Form 10-K, 2018, p. 1).
     
    Global Value Chain
    The global value chain represents the activities and people engaged in production, distribution, supply and sales activities that are also known as the supply chain (Antras and Chor, 2013). The following value chain analysis for Apple will aid in the identification of its business activities that can help in creating value as well as a competitive advantage (Wilson, 2012). The following represents the components of the value chain as it applies to Apple:
     
    Inbound logistics
    Apple limits inefficiencies in its operations and achieves economies of scale (Bartlett and Ghoshal) by sourcing production to hundreds of suppliers strategically located globally that adds efficiency to its supply chain, deliveries and distribution (Clarke and Boersma, 2015).  
     
    Outbound logistics
    In order to achieve efficient delivery to its five regions (the Americas, Europe, Greater China, Japan, and Asia Pacific), the company outsources elements of its product manufacturing to approved suppliers primarily located in Asia that are assembled and shipped globally (Dedrick et al, 2010).   
     
    Marketing and sales
    The company has developed a sophisticated sales and marketing channel that represent Apple retail and online stores, a direct sales force, third-party network carriers (cellular), wholesale operations and value-added resellers (Clarke and Boersma, 2015). This aspect of the company’s business strategy supports its branding efforts under Bartlett and Ghoshal’s second force (Hartzing, 2000).

    The analysis of Apple’s value chain in the context of Bartlett and Ghoshal’s first and second force reveals the company has taken proactive measures to secure and protect its local responsiveness and global branding under the measures indicated above.
     
    Conclusion
    The above analysis of Apple using Bartlett and Ghoshal’s typology delved into its two forces of local responsiveness and global integration that uncovered the company is well positioned in terms of the delivery, marketing and customization of its products in consideration of the three areas applied to assess the typology. 

    Under business strategies and globalization, Apple made specific references to its standardized product manufacturing approach that is adapted to local markets using customized software that pay attention to language and cultural nuances. This is one of the key business strategies of the company that is customer-centric in its approach to products and services which has become an expected part of the Apple experience. These aspects were further supported by the use of Mintzberg’s 5Ps that illustrated how the company’s business strategies address Bartlett and Ghoshal’s local responsiveness and global integration through its plan, ploy, pattern, position, and perspective contained in specific references under its 2018 annual report. A third model (global value chain) looked at inbound and outbound logistics as well as marketing and sales to further evaluate the application of Bartlett and Ghoshal’s local responsiveness and global integration regarding its business strategies and operations.