SWOT Analysis for Apple in China - Research Paper Example

SWOT analysis for Apple (iphone only) in China from the prospective of company/product of a developed economy that move in an emerging or developing economy Introduction Apple Company’s iphone was one of the most popular mobile phones in the world currently. This product has raised stiff challenges to many of the prominent mobile manufacturers like Nokia, Samsung, LG etc in many prominent markets. For example, Chinese market is believed to be the most promising emerging market in the world now because of the rapid economic growth happening there. China is one country which smartly used the opportunities of globalization and liberalization in order attracts maximum foreign direct investment. Foreign organizations willing to establish business in Chinese market face less barriers now because of the liberalization of rules for establishing businesses in China. This paper briefly analyses the SWOT analysis for Apple Company in Chinese market focussing mainly on Apple’s mobile phone product, iphone Strengths and weaknesses in China for iphone When iphone was introduced in the Chinese market, there were no similar products available with advanced touch screen facility. Apple taught the world about the touch screen technology and the Chinese people always have a respect towards apple products. Even though many duplicate products arrived in the Chinese market, none of them survived for a longer period because of poor quality whereas Chinese people still don’t have any complaint about the quality of iphone which is a major strength of iphone. “It is reasonably easy to convert iPhone apps into iPad versions because the core SDK system is the same. Market leader China Mobile announced last month it was interested in selling the iPad”(Quartly, 2009). Even though iphone is not much popular in China, other Apple products ipod, ipad etc are favourite items in China. The compatibility of iphone with the above products is strength of iphone considering the fact that other products available in China similar to that of iphone are not compatible with the ipods or the ipads. Overall, the strengths of iphone over its competitors are immense because of the significant difference iphone has with respect to the competitors. The huge brand value of Apple serves as another major strength for iphone not only in China, but all over the world as well. Most of the mobiles offered by the manufacturers are different only on papers, but in practice most of them are the same. But iphone succeeded in developing a new trend in the cell phone industry. It has revolutionized the mobile world all over the world. Prices of iphone are around 40% more than that of the Blackberries. Chinese consumer market is more focussed on the prices rather than the quality of a product. Brand images and values have least importance in the Chinese market. Chinese consumers compare the features and the prices before taking purchasing decisions. They will never purchase something just to show their standards to others. Blackberries are comparatively cheaper than iphone and Chinese people showed not much interests to purchase an expensive product when similar type of cheaper products were available in the market. Apple doesn’t have enough stores or shops in China which is definitely a weakness. Less number of Apple shops prevented Chinese people from getting the much needed awareness about the iphone and hence the support for Apple products in general and iphone in particular is not much encouraging from the Chinese public. Another major weakness of iphone in China is their inability to canvass the number one service provider in China which controls almost 70% of the Chinese mobile industry. The current service provider for iphone in China is placed only at the second spot. Opportunities and Threats Abundant financial resources available in China are the major strength for iphone for their operations in China. China is the most promising emerging market in the current world and their GDP growth is one among the bests in the current world. Many people believe that China may surpass United States in near future itself as far as the economic growth is concerned. The living standards and styles of the Chinese public have changed drastically over the last few decades which are clear positive sign for the iphone like expensive products. Political and economical, social and technological climate in China is more encouraging now compared to that in a couple of decades before. The tough communist principles were given way for more practical ones which is reflected in the acceptance of globalization by China. Earlier, China thought that the globalization was a tool for the westerners to loot the money, wealth and resources of the overseas countries. China suspected many hidden agendas behind globalization. But now they are the number one country in the world as far as the exploitation of globalization and liberalization is concerned which is a good sign for the prospects of iphone in China. But the reluctance in Chinese administration to respect human rights and liberties is still a problem and a threat to the iphone prospects in China. Censoring is still prevailing everywhere in Chinese media and public life and it is difficult for Apple like companies to succeed in China. Chinese economy is one among the bests as far as the growth rates are concerned. It is a fact that the living standards in China grown up considerably now which should serve as an opportunity to iphone at least on paper. But in practice it is not so. Chinese technology is superior in making cheaper products with immense features. In other words, iphone and its features can be duplicated in China with ease and hence the selling of iphone in China is facing severe threats from the duplicate products. China iPhones or iPhone copies from China are readily available online. You are able to buy China made iPhones easily whether for personal use or in bulk for commercial purpose. These iPhones are not actual copies or the Apples iPhone but clever imitations that are get by in China with their lax intellectual property laws. They do not use the Apple brand nor logo but they look almost identical to the iPhone (Jared, 2010). “China Mobile announced at a news conference that its going after service for Apple in that country -- it wants to host both the iPhone and the iPad in China for Apple” (Schramm, 2010). In short, Chinese companies are interested in marketing of the Apple products in China. But the governmental policies are preventing them from doing so. The iPhone has failed to thrive in China, due in part to an active black market and the Golden Shield Project (GSP), which censors certain Internet content. To comply with the GSP, devices that include wireless Internet have been required to use Chinas own WAPI standard. Meeting that requirement forced Apple to re-design the iPhone for China. In the meantime, a change in policy permitted devices to have both WAPI and Wi-Fi, but by then it was too late, and the 1st round of re-designed iPhones were released in China without Wi-Fi. (Caolo, 2010) China has not allowed the foreign manufacturers to use their Wi Fi technologies in Chinese soil because of the security concerns. China screens every foreign product entering the Chinese soil for possible security threats. They are afraid of countries like US and UK due to suspected agendas. So they put restrictions on the functioning of foreign companies and products in China. Apple forced to redesign its famous model of iphone in order to make them compatible for the Chinese market. In other words, they were forced to produce two types of iphones, one for Chinese market and other for the rest of the world. Black market is another major threat for iphone in China (Apple iphone, n. d). Chinese technology is superior to many other technologies and they are capable of copying foreign technologies to make cheaper products. In other words, it is easy to get a replica of iphone in Chinese market for a much lower price. Chinese technicians made lot of cheaper phones similar in functioning of the iphone and people started to buy such phones leaving out the much expensive iphones. Evaluation of current strategies Considering the strengths, weakness, opportunities and threats, in my opinion, the prospects for iphone in China is not promising. The heavy prices of iphone are a big burden for the growth prospects of iphone in China. Apple should consider reducing the prices of iphone in Chinese market. Brand images alone cannot guarantee success in Chinese market. Apple should also focus more on producing products suitable for the Chinese market. Even though the Chinese market is one of the rapidly emerging markets in the world, Chinese people will not spend lavishly like the Americans or the Europeans. Features alone may not guarantee success for a product in Chinese market as superior Chinese technology is capable of duplicating any product or features available in the electronic world. In short, even though China has changed a lot politically, economically, socially and technologically, still some of the evils of communism and the apprehensions preserved by Chinese administration towards westerners and western products are still continuing, which is not a good sign for iphone prospects in China. References 1. Apple iphone, (n. d), Retrieved on 19 June 2010 from http://webcache.googleusercontent.com/search?q=cache:RJPoFl_3_P0J:people.ischool.berkeley.edu/~hal/Courses/StratTech09/Tech/Preso/H-iphone.doc+iphone+swot&cd=1&hl=en&ct=clnk&gl=in 2. Caolo D (2010), Apple prepping Wi-Fi iPhone for China, Retrieved on 19 June 2010 from http://www.tuaw.com/2010/03/08/apple-prepping-wi-fi-iphone-for-china/ 3. Jared L (2010), China iphone, Retrieved on 19 June 2010 from http://hubpages.com/hub/China-Iphone 4. Schramm M, (2010), China Mobile angling for iPad, iPhone service in China, Retrieved on 19 June 2010 from http://www.tuaw.com/2010/03/19/china-mobile-angling-for-ipad-iphone-service-in-china/ 5. Quartly J (2009), Launch Pad, Retrieved on 19 June 2010 from http://www.chinadaily.com.cn/life/2010-06/09/content_9953539.htm Read More