Reasons behind Global Expansion of Apple Inc - Research Paper Example

Reasons behind Global Expansion of Apple Inc. Introduction Apple Inc. is an American based global corporation with its operations in many parts of the world through its various retail and online outlets. It is mainly into the manufacturing and designing of personal computers, computer software, music devices and market consumer electronics. A few of the best products of Apple consist of the iPod, iPhone, iPad and the Macintosh computers. Its software products include mobile operating system, computer operating system that is Mac OSX, iTunes, and iLife. The company was founded by Steve Jobs and Stephen G. Wozniakin, in the year 1976 and got incorporated in January 3, 1997. Steven P. Jobs is currently the CEO of Apple Inc. It has it’s headquarter located at Cupertino, California. During the first 30 years of its incorporation the company was named Apple Computer, Inc. but in the year 2007 the word computer was removed from its name as the business has expanded from the manufacture of computers to more diversified products range. At the initial years of operation, Apple Computers, Inc. faced difficulties in sales of its products and Steve Jobs left the company. As a result of competition from Microsoft and other companies, Steve Jobs eventually returned and after that he was the main source for increasing the sales of the company and bringing it back to track. At present Apple Inc. is a global corporation which is constantly growing and developing with the introduction of new and innovative products in the market which is second to none. The key competitors of Apple are Microsoft, Hewlett Packard, Cisco Systems, Dell, and IBM (Steele, n.d.). Reasons behind Global Expansion of Company When Jobs and Woz founded Apple and made their first computer with a circuit board named Apple 1, they got good results with sales of 200 units in the first few months. There was potential for Apple products to grow, both in sales and popularity worldwide. This was one of the main reasons for the global expansion of Apple Inc. worldwide. Apple was also facing competition from IBM which was a huge company. In order to grow and become one of the top companies of the world and ward off competition Apple expanded its operations to Europe and United Kingdom and further to other countries of the world. Apple’s Controversial Issues Despite its tremendous performance and its outstanding products, Apple, Inc. has faced many controversies in the recent few years. There were many issues regarding the products of Apple, Inc. The company also faced other controversies related to its human resources, business partners and also consumer services. The main controversies faced by Apple, Inc. are stated below. Apple’s controversies started immediately after its first few years of operations. Apple Computers had asked Apple Corps regarding the sharing of name Apple as the name of the company which was agreed by Apple Corps. At that time Apple Corps believed in the policy of sharing freely. Apple apparently got into the business of music selling and after the end of the seventies, trademark controversies started between two of them. Apple Corps claimed that Apple Computers was illegally using Apple Corps name to sell music products in the market. Finally Apple Computers had to settle this case by paying a huge amount of $27 million (Waling, 2005). After few days of release of Apple iPhone 4, information was leaked which opened the truth of the company. It was found that a series of suicides which was around 11 was committed by workers of Apple in Chinese factory where iPhones, iPads were manufactured. It was revealed that the working conditions in these factories were worst. These Apple factories were nick named as i-nightmare factories by the workers where they use to work 24 hours a day for production. The workers had a shift of 15 hours a day and they were provided weird rooms with no air conditioners to sleep. Workers were treated as prisoners where they had to work under constant pressure for increasing Apple’s sales (Pixellogo, 2010). Apple has been committed to ensure the utmost level of social responsibility through its supply base. Apple said that its suppliers followed a code of conduct regarding working conditions, treatment of workers, and manufacturing processes. To the contrary, report of Daily Telegraph stated that Apple’s suppliers used child labor in its factories. The suppliers were involved in child labor and other issues like labor violations, overtime and huge work load, and minimum wages (China Labour Bulletin, 2008). Apple also faced controversies regarding its products. Frederick Black of Florida filed a 19 page complaint against the company regarding the monopoly which Apple was creating with the illegal tying of iPods with iTunes. The suit landed on the feet of Apple corporate office. iPods were unnecessarily attached with the iTunes services and anyone who purchased iPods from Apple stores had to mandatorily subscribe to its iTune download services. iTunes also restricted consumers from transferring or downloading music from any rival online stores. As a result of these monopoly consumers were forced to pay high prices for Apple’s products (Smith, 2007). Another controversy was about Apple’s iTunes based social networking and Facebook. At the time of demonstration of Ping at the annual launch of its product, it was noticed by many that Ping included Facebook integration which made it easy for people to find people who were familiar with Ping. But when the product was available for public they found that the integration was missing. It added to the disappointment of around 160 million users who were using Ping. Apple failed to negotiate with Facebook regarding the integration with Ping considering the terms stated by Facebook as onerous (Paul, 2010). IPhone 4 antenna held another controversy for Apple Company. Wi-Fi and cellular antennas are not inside the iPhone. In place of that there is an iconic steel band around the corner of the phone which is spilt into two parts. As these antennas are situated outside the phone, touching them affects the operation of the phone. These factors have led to the deficiency of the product and Apple is facing serious complaints from customers regarding it (Fastie, 2010). Beside the above stated issues, there were numerous other controversies related with Apple. The fault in Apple’s iBook line related the fracture of joints after certain period of time which caused the breakdown of system was also a major issue for Apple, Inc. There has also been an issue regarding the patent of home screen of a mobile application filled by Apple. It is said to copy the home screen of an application which already existed. Controversies were also raised when Google recently pulled out its voice application from Apple iPhone Application store. External Environmental Factors Affecting Management The external environmental factors of Apple consist of the following: Technological factors: With the advancement of technology, customers are constantly demanding high and advance technology products. Apple has to continuously add innovation in its products. Competition: Apple is facing tough competition from its main competitors like Microsoft, Dell, and HP which decreased the sales of Apple in the past. Apple has to deliver good service and high quality products if it wants to lead the market. Economic factors: Recession and other economic conditions have a negative impact on the company. It decreases the sales of the company which hurdles the growth of the company. Government: In its path of global approach, Government and legal rules of the host countries can affect the company in its marketing and sales of products. Cultural Dynamics Apple being a multinational corporation works in different countries having varied cultures. Each country in which it sells its products has its own culture and beliefs. Whether it is Africa, India, America, China or Europe, each country has its own norms and practices. Despite such a huge operation and cultural variation, Apple has maintained integration through its products. Worldwide acceptance of Apple products prove that it has successfully placed its products and services in this varied atmosphere compromising with the cultural aspects of the country. Organization’s Strategies for Management of the Issues From the early controversy regarding the use of brand name for selling music products to the latest iPhone 4 antenna issues, Apple has been defending any controversies regarding its product or any other company issues. The issue of copyright of company’s name was settled by Apple by paying $27 million to Apple Corps which was huge during 1980s. Recently there was an issue regarding extreme working conditions in Apple’s China factories due to which 11 workers committed suicide. Steve Jobs addressed this controversy saying that the suicide was pretty nice. He added more that if anyone goes to the factory location, they will find restaurants, hospitals, theatres, and swimming pools. All these comforts in a factory were good and comfortable (Edwards, 2010). The controversy regarding use of child labor in Apple’s 3 factories to manufacture products was admitted by Apple. These factors had a detrimental affect on Apple’s overall image and also its growth. Media had made a huge issue regarding this scenario. There were 11 children employed in these factories. Apple is nevertheless taking measures to check the issue and minimize the practice of child labor. Apple declared that it will review all its employment records and will analyze the complete hiring process to ensure that no underage worker is employed in the factory (iPhoneness, 2010) The latest issue related with one of Apple’s new products was the iPhone 4. Although it is one of the best smart phone manufactured by Apple, but it still faced complaints regarding the two sides spilt antenna which affected the performance of iPhone. Steve Jobs, CEO of Apple defended this controversy stating that almost all smart phones had problem with signal reception if it is held in a certain position and it is the same for the iPhone. He blamed media for spreading unnecessary buzz about this issue particularly to Consumer Reports review. Apple is also offering a free Bumper case for iPhone to avoid user’s finger interference in the antennas. He also added that only 0.55% of iPhone4 users have complained about the antenna issue (Palenchar, 2010). All the issues addressed by Apple have helped the corporate to sustain its position in the competitive world. In the year 2009, the company earned revenue of $8.16 billion with a net quarterly profit of $1.21 billion, till March. In its previous year it had earned $7.51billion as revenue with a net quarterly profit of $1.05 billion (Apple, 2009). These figures makes it clear that Apple has fought, sustained and achieved a place of one of the most popular brand names in the world. Right from the defend of the copyright issue of Apple Corps to the latest complaint of iPhone 4 antenna, Apple have been successful in warding off the hurdles in its path. Issues were also raised of low sales as a result of which Steve Jobs was forced to leave the company. Despite controversies and issues of even international level, Apple has always been taking corrective actions and steps taking into consideration the companies objectives, policies, and growth. Every decision taken by Apple has been implemented towards efficient performance and achieving goal of the company. Apple is dedicated towards providing best quality services in its field. At present Apple has adopted the policy of green apple due to the increase in concern of global warming. A toxic chemical which was used in the manufacturing of its products is no more in use. Apple has always utilized the opportunity present in the market and gave its performance to the world. The very simple fact that Apple is one of the Fortune 500 companies proves that its organizational management has been successful in positioning the company in the global landscape. How Management can Prepare to Deal with or Conclude the Issues Apple Inc. had a tremendous opportunity to explore the market and increase its potential. Apple has been facing many complaints and issues regarding its products and services from its customers and media. The issue regarding the suicide of its workers left a bad impression on the company’s working culture and environment. As customers today are becoming more conscious towards public welfare and environment, such activities will hamper goodwill of Apple Inc. and can also result in low sales. As for the issues regarding suicide of workers, Apple must appoint an investigation committee to find out the cause behind such act and if there is any deficiency in the working atmosphere, the company must try to cover it. Another report also stated that working conditions of workers in factories were worst with extra time working and low wages. The accommodation provided to workers was also not satisfactory. If Apple wants to maintain its corporate objectives and be a market leader in its type, it must provide fair wages to its workers and if they are working overtime, then proper overtime remuneration should be given to them. Child labor issues also created problem for Apple as it was related to legal aspect of China’s law. This kind of activities can pull Apple in serious trouble and huge expenses can be incurred by the company solving it. Apple must follow strict selection criteria and must discharge existing child workers in the factories. In the case of Facebook integration with ping controversy, despite taking any fast and reckless decision, Apple must properly negotiate with Facebook and see its benefit from long term prospective. Apple should follow a stakeholder model of corporate governance where every aspect of corporate activities must be given preference. It will help Apple in minimizing its corporate issues and other matters of concern. Apple’s relation with the media companies has not been good. This may be one of the main reasons why every time the company gets into controversies. Even small issues were enlarged and spread by the media companies which increased extra trouble for the company. Apple should focus on building and maintaining good relation with the media companies. This will help the company in getting good publicity and avoiding less public issues. References Apple, Inc., (2009). Best March Quarter Revenue and Earnings in Apple History. Apple Reports Second Quarter Results. Retrieved Online on November 09, 2010 from http://www.apple.com/pr/library/2009/04/22results.html China Labour Bulletin, (2008). Apple's Labour Report Stirs up Controversy. Home. Retrieved Online on November 09, 2010 from http://www.china-labour.org.hk/en/node/100696 Edwards, T., (2010). Jobs Defends ‘Pretty Nice’ iPhone Suicide Factory. People: People in the News. Retrieved Online on November 09, 2010 from http://www.thefirstpost.co.uk/64063,people,news,steve-jobs-defends-pretty-nice-apple-iphone-foxconn-suicide-factory Fastie, (2010). iPhone 4 Antenna Controversy. The Phone Costs More than Advertised. Retrieved Online on November 09, 2010 from http://www.fastie.com/articles/article.php?id=105&title=iPhone-4-Antenna-Controversy iPhoneness, (2010). Apple & Child Labor Violations. News. Retrieved Online on November 09, 2010 from http://www.iphoneness.com/news/apple-child-labor-violations/ Pixellogo, S., (2010). The Apple Controversy: Will You Stop Buying Apple Products? Design & Style. Retrieved Online on November 09, 2010 from http://blog.pixellogo.com/?p=609 Paul, I., (2010). Apple vs. Facebook: What's Behind the Ping Controversy? News. Retrieved Online on November 09, 2010 from http://www.macworld.co.uk/ipod-itunes/news/index.cfm?newsid=3238156&olo=rss Palenchar, J., (2010). Apple Profits despite iPhone 4 Controversy. Twice. Retrieved Online on November 09, 2010 from http://www.twice.com/article/455412-Apple_Profits_Despite_iPhone_4_Controversy.php Steele, J. L., (No Date). Apple Inc. Profile. Retrieved Online on November 09, 2010 from http://jlsteele.iweb.bsu.edu/profile.html/ Smith, S., (2007). Apple Hit with iPod-monopoly Class-action Lawsuit. Tech News. Retrieved Online on November 09, 2010 from http://www.monstersandcritics.com/tech/news/article_1372511.php/Apple_hit_with_iPod-monopoly_class-action_lawsuit Waling, E., (2005). The Controversy. Apple Copyright Controversy. Retrieved Online on November 09, 2010 from http://web.ics.purdue.edu/~smatei/435/techwiki/index.php?title=Apple_Copyright_Controversy Read More