Wall Street Journal Article Oct 20, 2014 - Essay Example

Part I: Summary of Wall Street Journal Article Oct 20, On Oct 16, an interesting article was published in the technology section of the Wall Street Journal pertaining the unveiling of iMac and iPad Air 2. The article which was titled Apple Unveils iPad Air 2, IMac pointed out that Apple Inc had unveiled new iPads that have new incremental improvements that are aimed at prodding companies to replace personal computers and older tablets. According to the article, the new Apple Air 2 is designed to be 18% thinner than its predecessor in addition to also having a more powerful graphics engine and processor. It has also been equipped with Apple’s Touch ID fingerprint reader. The Touch ID allows users to purchase items within apps by using Apple Pay payment services in addition to also acting as a security feature (Wakabayashi, 2014). In July 2013, Apple announced that it would work with International Business Machines Corp so as to develop iPad and iPhone apps that would cater to the workplace. By positioning the iPad as a possible PC replacement for the newly emergent generation of workers, Apple is noted to be aiming at attempting to answer the existential question noted to be facing tablet computers as technology continues to evolve. As smartphones continue to grow bigger with more powerful processors and larger screens, this trend is noted to be visible in Apple’s own products as is demonstrated in the case of the newly released iPhone 6 plus which comes with a 5.5-inch display that is nearly encroaching on iPad Mini’s 7.9-inch screen. Having been the first tablet computer in 2010, Wakabayashi (2014) points out that the iPad was largely a runaway success but demand for the product has started to gradually slow. A key reason as to why the sale of tablets is gradually decreasing is that people that own iPads are not replacing their tablet computers nearly as often as they tend to swap their phones. It is estimated that about 46% of the iPads that are currently in use are the original iPad and iPad 2 that were initially introduced in 2010 and 2011 respectively. The new iPad Air 2 is largely expected to help drive what will be “an upgrade cycle” among the currently existing owners of iPads. Other than the iPad Air 2, Apple also plans on unveiling a new iPad Mini 3, that will come with Touch ID as well as a new iMac personal computer. To compete with lower priced rivals that run Google Inc’s Android operating system, Apple cut the price of last year’s iPad model down to $299 while that for its previous iPad minis was reduced to $249. Apple is also engaged in preparing a larger 12.9-inch iPad with a higher resolution display. The new iMac is designed to feature a display that provides seven times the resolution of the currently available high definition television. According to Apple, Iphone users will now be able to use Apple Pay services at about 220,000 U.S. locations including Macy’s McDonalds and Bloomingdale’s. The company also expects that Apple Pay will eventually be supported by an estimated more than 500 different banking outlets by early 2015. Apple also also showed off its new OS X operating system for Macs that will become available for existing customers on Thursday, on the other hand, the new mobile operating system iOS 8.2, will be available on Monday. Part II: Summary of Assigned Chapter- Chapter 9 International Product Policy The assigned chapter examines just how companies work to develop international product policy including product-line policies and new product development. According to the authors there are a number of factors that can cause companies to opt for standardization over adaptation some of these include high cost of adaptation, similar tastes and convergence in diverse country markets, standardized products marketed by competitors, strong country of origin image and effect, centralized management in international operation when mode of entry is mainly direct exporting. On the other hand, some of the facts that might cause companies to opt for adaption as opposed to standardization include differences in technical standards, variations in conditions of use, variations in ability to by as well as variations in consumer needs. According to the Terpstra, Foley and Sarathy (258), both the domestic and global companies need to formulate strong new product development strategies if they are to remain competitive. However, this task is often quite complicated for global companies as they need to take into account varying market characteristics, the global business environment as well as diverse customer needs. Terpstra, Foley and Sarathy (259), highlight the fact that it is important for product-line strategies in foreign markets to reflect the local market characteristics, conditions of use, consumer needs, as well as the ability to buy. Companies operating in high-tech industries are noted to be faced with the certainty that current generation technology will eventually become obsolete. With this in mind, the companies are faced with the dilemma of having to balance incremental improvement to the current technology – based products while constantly focusing on next generation technology. According to Terpstra, Foley and Sarathy (263), product-line extension is basically the use of one product upon which to develop further closely related products. Product-Line extension has been noted to have a number of advantages that include the fact that similar and multiple products allow excess capacity to be used without any costly product change over and setup costs, minor product modifications to add new products allowing firms to be able to claim that they are essentially innovative as well as to satisfy customer who are currently engaged in looking for something new. Some of the negative aspects of product-line extension include that extension works to reduce brand loyalty as it encourages customers to experiment and switch, extensions have also been noted to crowd out genuine new product ideas. Companies tend to employ a number of techniques in order to effectively manage New Product Development (NPD). The authors also point out that knowing when to end an NPD project is a critically important management issue. Some of the key factors variously include advocacy, the innovation level as well as the level of product performance. Companies that have well established foreign subsidiaries often tend to encounter increased demands for local autonomy. These demands are often reinforced by the nationalistic feelings of the subsidiary personnel. In the chapter, Terpstra, Foley and Sarathy (265-266) are keen to point out that firms may cooperate with other firms in their NPD. These consortium partners typically tend to have complementary assets in technology or design and an alliance is formed to ensure that new products are developed at a faster rate. As a firm works to develop its global reach and development strategies, it is necessary that it considers a number of factors including the level of autonomy, location, personnel issues as well as the possible implications on its organizational structure. Part III: Relationship/Application of Concepts to Article Similar Tastes and Convergence in Diverse Country Markets Causes Consumption Patterns to Converge and thus Encouraging Standardization: According to Terpstra, Foley and Sarathy (253), as countries obtain similar income levels and develop at the same economical pace, their overall consumption patterns are often quite likely to converge. This is exemplified in the case of the European market and the creation of the EU that has resulted in single large markets that have similar tastes and incomes. In producing the iPad Air 2 and the iMac, Apple has standardized its products and is able to sell these products to numerous global markets without having to make any special modifications to its products. Strong Country of Origin Image and Effect: Firms often prefer staying with standardized products so as to stress the product’s link back to the home market and this is regarded as being part of the products appeal to diverse foreign consumers. This point is seen to link to the article in that Apple does not adapt its products to suit any of its global markets. Its products are standardized and this can be identified as being part of the appeal to the product’s foreign markets. NPD and Technology Upheavals: Companies operating in high-tech industries are constantly faced with the certainty that the current generation technology will eventually become obsolete. This dilemma often forces these companies to make incremental changes in their product. This aspect is seen to be related to the journal article in developing the iPad Air 2 and the iMac, Apple essentially made a few incremental changes to its existing products so as to ensure that they remain competitive in the current market. Product-Line Extension: This has been describedas the use of one product upon which to develop a number of other closely related products. This is related to the article in that in developing the iPad, Apple which was the first company to developed tablet computers is seen to have adapted it to concepts borrowed from the iPhone and the iMac computers. Works Cited Terpstra, Vern, James Foley, and Ravi Sarathy. International Marketing. Naperville, Ill.: Naper Publishing Group, 2012. Print. Wakabayashi, Daisuke. Apple Unveils iPad Air 2, iMac. Accessed at < http://online.wsj.com/articles/apple-updates-ipad-apple-pay-1413480121> Web, Oct 16, 2014. Read More