One of the 50 Smartest Companies - Case Study Example

One of the 50 smartest companies 2015: Apple Inc Name Professor Institution Course Date One of the 50 smartest companies 2015: Apple Inc Introduction In the recent years, managers have been asked to think global so as to gain competitive advantage. Apple is one of the companies which has heeded to this call and has currently increased its global markets (Apple Inc 2015). Today, Apple Inc is ranked as the 3rd leading mobile phone maker in the world and the largest information technology firm in the world based on its revenue. Wall, Minocha and & Rees (2010) stated that Apple success is attributed to use of strategic tool like star analysis which has allowed the managers to analyze the geographic and market information and create sustainable strategies in global business arena. Therefore, this essay will analyze some of the star analysis factors which the company has used to gain competitive advantage. These factors include home country, partner country, supplier country and customer country. Secondary source information will be reviewed and analyzed to provide a true picture of Apple global strategies. Home country Apple Inc. is a multinational and American technology company which develops, manufacture and sells computer software, electronics and provides online services (Elmer 2011). The company was established in 1st of April 1976 by three technology enthusiasts, including Steve Jobs, Steve Wozniak and Ronald Wayne and has its headquarters in Cupertino within California (Apple Inc 2015). Some of its known products and services include iPod, iPhone smartphone, iPad, iTunes Store, Apple smart watch, Mac computer, iCloud, and App Store (Lashinsky, 2011). In any case, business location plays a critical role to its success. The home country enables business to thrive on the basis of political, economic, social, technological, legal and environmental factors. Apple Inc headquarters and home country is the United State of America and in particular in California (Apple Inc 2015). The US holds a strong democratic establishment and efficient laws, and elections, which are regarded as transparent and fair. Yarow (2013) posited that the country enjoys massive political and economic influence over both national and global policymaking, and is recognized as the leading superpower in the world. The United States is also the world’s leading economy with a Gross Domestic Product of more $16.765 trillion (Pestle Analysis 2015). The economy has developed and has many high income earners with disposable income to buy luxury products like Apple’s iPhone, iPod, iPad, Mac, Apple watch and Apple TV. Pestle Analysis (2015) opined that technology and innovation are the foundation of the American economy, making the company to improve its product development to increase is competitive advantages. That fact that Apple is located in California which host silicon valley and Stanford University which are the leading high-tech hub in the world has provided Apple with competitive advantage, but also world technological talents to make it one of the leading brand in the world (Pestle Analysis 2015). The US also has a western culture which promotes innovation, socializing and enjoyment (Pestle Analysis 2015). Partner country Taiwan can be classified as the Apple Inc partner country. Taiwan host one of the companies which produce Apple products. Apple has partnered with Taiwan's Foxconn to produce some of its products such as iPad and iPhone (Apple Inc 2015). Just like Apple Foxconn is one of technology industry leaders in the world. Hon Hai Precision limited operating as Foxconn, is an electronics manufacturing multinational company with headquarters in Taipei, Taiwan. Foxconn is the ranked as the leading electronics contractor producer and 3rd leading information technology firm based on revenue. The status of the company makes it a strong brand not just in Asia but globally. Mulcaster (2009, p.70) held that when getting into partnership arrangement, it is viable to create a strong relationship with a strong company which will enhance the company brand strength. The success of Foxconn gives Apple competitive advantage over other phone manufactures in Taiwan such as HTC Corporation, Acer Inc, Asus Computer, D-Link Corporation, VIA Technologies Inc. Apple has been using Foxconn also as its distribution in Asia market. The US and Asia is far apart and it can take a long time for a company to deliver its product to Asian market. Apple Inc (2015) stated that partnering with Foxconn therefore has increased the speed at which customer can access Apple products. Taiwan is also ranked as high income economy with most of its citizens belonging to either upper class or middle (Clark & Tan 2012). It means the citizens of Taiwan have high disposable income to buy luxury goods like Iphone, Ipad and Mac. Technology industry is one of largest contributor of Taiwan’s economy. The technology industry is very competitive and makes other market players like Apple to remain innovative and provide more value proposition to its customers (Apple Inc 2015). Taiwanese technology firms account for nearly three-quarter of the globe’s PCs production and almost half of liquid-crystal displays in the world. Supplier country Apple supplier country is China. Apple Inc (2015) report reveals that most of its suppliers companies come from China and include Compal Electronics, Hon Hai Precision Industry, Pegatron Corporation, Quanta Computer Company and Wistron Corporation among others. When Apple listed its suppliers, out of 748, 331 of them were from mainland China (Apple Inc 2015). Apple are supplied with raw materials such as microprocessors, LCDs, enclosures, optical drives, semiconductors made from silicon, glass, lithium batteries, Lathanum, Baseband Processor, LPDDR3, LPDDR2 and DRAM (Apple Inc 2015). Supply chain of Apple Inc has faced a lot of interest in the last few years. The supply chain has been received recognition for excellence, and also condemned for some weaknesses (Leander 2012). Its weakness has been that the supply chain takes a lot of time to deliver raw materials hence the company takes long time to deliver its products. For that reason, Apple Inc has in the recent times dropped some suppliers and formed new strong business relationship with others who are near its manufacturing plants. The market competition is very stiff and companies needs efficient supply which can ensure they deliver products ahead of their rivals. The company has put standards in recruitment of its suppliers to ensure they get the best that can deliver raw materials within tight period and also provide best value to its clients and the shareholders. Apple Inc publishes their terms on their websites which include standards, ethics and responsibility terms (Apple Inc 2015). The practice makes the company remains transparent in its supply chain and procurement process. It endeavors to provide equal chances to companies which bids for supplying contract, the company has a database which they allow companies to submit information about products they offer and quality. Apple can then analyze suppliers in their database and select the best and strong brands to ensure they can get the raw materials for their products. Leander (2012) affirmed that Apple has adopted technology in its supply chain to ensure it coordinates stock and time for efficiency. Customer country Apple is a global brand and cannot be categorized to have just one customer country. Therefore, in this context, customer country means any country which has demand for its products, taste and preferences of the customers, context for the market demands, market entry strategies and competitive strategies for the company. Yarow (2013) posited that Apple has a large customer base in the US which makes 34 percent of its sales followed by Europe which makes 20 percent. Other Apple’s largest markets include China which contributes 15%, Japan 6% and Asian Pacific which contributes 2.8% of the total sales (Yarow 2013). Apple Inc’ strong leaning towards the US is normally influenced by to some extent by the huge popularity of its products particularly the expensive ones within the region. In Addition, United Kingdom has constantly been a strong market for iPhone. In early 2013, a study claimed that iPhone sales accounted for 43.5 percent of the smartphones traded in the United Kingdom from early September of 2012 to end November of the same year (Yarow 2013). America and other technology enthusiasts which form large number of Apple customers are normal loyal to their brands. Their loyalty is created by the features and quality of the products. Jinjin (201, p.96) stated that the company has been able to create customer emotional loyalty with their product such as iPhone and its features like long lasting battery, video and music player, safari browser, email and effective camera. Such loyalty emerges due because of high level of satisfaction the customer has received from the product. Wall, Minocha and Rees (2010) argued that customers who are attached to a product normally do not question about the high cost whether the company hikes the prices but are willing to pay. Customers have made part of their lifestyle and continue to buy Apple products as they develop new models. Over the years, brand loyalists have been flocking at the Apple stores in anticipation of new products (Jinjin 2013, p.97). Conclusion Apple Inc. is currently enjoying the market dominance as the most admired company and third largest of Technology Company in the world because of its talented and innovated employees. The company has continued to use its strength to improve its market share for many years. Some of the strengths the company has continued to use to gain competitive advantage include home country advantages, partner country benefits, supplier country advantages and customer country benefits. With competition increasing the company must enhance its internal capability such as innovation and match them with global competitive advantages so as to solidify its position in the market. References Apple Inc 2015, Apple Inc Official Website, Viewed on 22 November 2015 http://www.apple.com/ Clark, C, & Tan, A.C 2012, Taiwan's Political Economy: Meeting Challenges, Pursuing Progress, Lynne Rienner Publishers. Elmer, P 2011, How Apple became a monopsonist – Apple 2.0, Fortune Tech (CNN.com) Jinjin, T 2013, A Strategic Analysis of Apple Computer Inc. & Recommendations for the Future Direction, Management Science and Engineering Vol. 7, No. 2, pp. 94-103 Lashinsky, A 2011, How Apple works: inside the world's largest startup, Fortune Leander, K 2012, Apple: I t ’s all about the brand, wired Mulcaster, W.R 2009, Three Strategic Frameworks, Business Strategy Series, Vol.10, pp.68–75 Pestle Analysis 2015, PEST Analysis of USA, the Largest Economy of the World, Viewed 22nd Nov 2014 http://pestleanalysis.com/pest-analysis-of-usa/ Swati, K 2010, Consumer psychology: The essence of Marketing, International Journal of Educational Administration, Vol. 2, No.2, pp. 220–237. Wall, S, Minocha, S & Rees, B 2010, International Business (3rd ed), Prentice Hall. Yarow, J 2013, Chart of the day: Apple is taking share from Google in the US smartphone market, Business Insider Read More