Challenges Faced by Apple In China - Research Paper Example

?Globalization and International Management CHALLENGES FACED BY APPLE IN CHINA Apple Inc. is a multinational corporation with head-office in Cupertino, California in the United States of America (US). The company produces as well as markets various mobile communication and media technologies, music players, personal computers and software. The products of the company are offered to customers through retailers, sales forces and online stores. The different market segments of China are identified as one of the leading markets in the world for the company. In China, the company is observed to face certain challenges in relation to warranty policy. The warranty policy for products and/or services in China is for two years while the company provides warranty for a period of one year. The warranty policy of the company is criticized by the media, Communist Party, celebrities and consumers in the market of China. This issue is mainly criticized for the violation and the negligence of the company towards the rules as well as the regulations of China in relation to foreign companies operating in the Chinese market segment. The company is also seemed to face challenge in relation to after sales services. The consumers also complained that they are not provided with adequate customer services with issues including technical faults among others. The state media of China is a major challenge for the company i.e. Apple as the Chinese media has undertaken every measure in criticizing the policies of the company and revealing the ill-treatment that Chinese journalists has faced in the offices of Apple in China through news. The state media is determined to adopt aggressive tactic of criticizing the operations of Apple in China with the intention of enhancing the performance of local telecom companies to compete with Apple (Barboza and Wingfield, “Pressured by China, Apple Apologizes for Warranty Policies”). It is observed that the company lacks communication with its businesses in the market segment of China. The lack of effective communication is one of the major challenges and this may adversely affect the operations and performance of the company in China. Lack of communication will increase inefficiencies of the company resulting in the reduction in customer base and market share. The company is identified to face pressure in the Chinese market due to rivalry issues amid China and the US. China has faced cyber-security issues in relation to hacking of computers of various American companies. Additionally, it has been identified that the Government of the US had proposed to restrict the operations of two Chinese companies in the US. The two Chinese companies which include Huawei and ZTE are the leading producers of telecommunications equipment had been advised to stop their businesses in the US due to engagement in espionage activities (V.V.V., “Unparalleled Arrogance, Full Apology”). These are the various challenges which are faced by Apple in the market segment of China. Furthermore, these challenges are seemed to act as a trade barrier for the US corporations to operate their business activities in China. 2. RISK MANAGEMENT STRATEGY OF APPLE Apple is identified to possess certain risk management strategies with the objective of mitigating risks which arise both in the national as well as international market segments. It can be stated that the company does not possess adequate risk management strategies in order to eliminate those risks at the time of identification. The company is seemed to adopt risk management strategy for interest rate and foreign currency risks but is ineffective in the management of risks arising within challenging marketplaces regarding consumers. It is observed that in the market segment of China, the company has faced various challenges in relation to warranty policy and customer services which are affecting the performance and customer base. The company is a multinational corporation and accordingly it has over the years faced various challenges in relation to rules and regulations, policies and legal requirements among others. In this context, the company has devised various strategies on the basis of which the operations will be executed successfully both in national as well as international markets. The company follows certain policies in order to comply with the rules as well as the regulations which are applicable for operating business operations in different countries. The company also recognizes the various governmental as well as legal requirements which are necessary for operating in foreign market segments. It analyses the market situations and accordingly formulates strategies on the basis of which it has planned to enter different target market segments. The company, on identification of risks, adopts changes in its business processes or strategies with the intention of overcoming those emerging risks (Apple Inc., “Form 10-K”). The employees and leaders of the company comprise various experienced as well as expertise individuals for executing the business operations both in national and international market segments effectively. The management of the company is entrusted with the responsibility of identifying and analyzing emerging risks and reporting those risk factors to the board of the company so that effective measures are undertaken. The board members of the company should seek appropriate strategies in accordance with which the uprising problems or risks are to be mitigated (Apple Inc., “Schedule 14A”). It has been observed that in the past, the company has faced numerous challenges but those risks and challenges have been sorted out by the company in an appropriate fashion. The challenges faced in the Chinese market segment are just mere issues as the company can extend the warranty policy for two years as per the law of China. Additionally, the improvement of customer services will aid in managing any technical issues customers have in relation to products. However, the challenges which have been raised due to unhealthy relationship amid the US and China for restricting the operations of two leading Chinese companies to operate in the US owing to espionage and blaming China for hacking computers of certain progressing US companies. These factors cannot be readily mitigated by Apple as they are out of control of the company. 3. STRATEGIES TO BE APPLIED BY APPLE IN ORDER TO RECOVER ITS DAMAGED REPUTATION IN THE CHINESE MARKET Apple is required to adopt certain strategies with the motive of overcoming the aforementioned challenges which are faced by the company in the Chinese market segment. The strategies to be adopted by the company are as follows: Training and Development Program The employees of the company should be offered with efficient training as well as development facilities with the objective of offering customers with better after-sales services. The training and development program will enhance skills and creativity of employees so that they are able to manage the various issues which are faced by customers in relation to products. Employees possessing an enhanced level of competencies will be able to render superior performance and will be capable of bringing back the lost reputation of the company amid the customers. Employees with innovative skills are able to meet and satisfy the needs as well as the preferences of customers (SAGE Publications, “Training and Developing Employees”). Effective Communication System Apple should adopt certain effective communication system such as ‘information and communication system’ (ICT) with the objective acquiring and disseminating appropriate information in a timely manner. The board members of the company with the assistance of this communication system are likely to acquire adequate relevant information on the basis of which appropriate strategies and changes in the business operations can be implemented. The company with the assistance of ICT will be able to communicate with customers in order to determine their preferences so that it is able to provide products and/or services accordingly. Moreover, an effective use of public relation campaigns can be made by Apple to salvage its lost reputation and place the company as one of the most trustable ones amid the consumers (Crown, “Internal Communication”). Risk Management Strategy Apple should adopt an effective risk management strategy with the objective of mitigating any sort of risks whether quantitative or qualitative in nature. The company should be able to analyze the risks which may hamper its performance in different market segments worldwide. With effective risk management, the company is likely to identify and analyze risks in order to develop appropriate strategies with the aim of minimizing the chances and the impacts of those risks. It will assist the company to make better decisions and improve its performances. The company should seek that it scrutinizes the risks on a continuous basis in its every operational process so that in future such risks could be mitigated ensuring sustainable operation and performance (Thanet District Council, “Risk Management Strategy”). These are the various strategies with the assistance of which the company is likely to meet that challenges it faced in the market segment of China. These strategies will assist employees to meet the requirements of the customers along with facilitating them to render required quality service based on their preferences. Moreover, the company with the availability of adequate market information will be able to formulate suitable strategies and recover its lost reputation in the Chinese market. Works Cited “Form 10-K.” United States Securities and Exchange Commission. Apple Inc., 2012. Web. 25 June. 2013. . “Schedule 14A.” United States Securities and Exchange Commission. Apple Inc., 2012. Web. 25 June. 2013. . Barboza, David and Nick Wingfield. Pressured by China, Apple Apologizes for Warranty Policies. The New York Times, 2013. Web. 25 June. 2013. . “Internal Communication.” Publications. Crown, 2010. Web. 25 June. 2013. . “Risk Management Strategy.” Version 9. Thanet District Council, 2012. Web. 25 June. 2013. . “Training and Developing Employees.” Applied Human Resource Management. SAGE Publications, 2013. Web. 25 June. 2013. < http://www.sagepub.com/upm-data/26858_7.pdf>. V.V.V. Unparalleled Arrogance, Full Apology. Apple in China, 2013. Web. 25 June. 2013. . Read More