The iPhone in South Korea - Essay Example

Apple is a publicly listed US consumer organisation and was established in 1976. This is a well known organisation for its attractive communication gadgets which are both popular for home and personal use. During its early days in business, Apple focused on its personal computer business but has been of late constantly modifying its mobile phone gadgets through introducing completely new products with extra ordinary features. For instance, the introduction of the iPhone by Apple was well received across the globe as a result of its uniqueness in that it was a phone with many functions such as digital music, organiser, video, pictures and a lot of other different features converged into one gadget. However, though the iPhone is widely regarded as very special and different from the other phones across the globe, Apple has found it relatively difficult to penetrate the South Korean market as a result of a number of different factors. Against this background, a critical analysis of the given case study seeks to explore some of the problems likely to be encountered by introducing iPhone in South Korea as well as the solutions that can be put in place in order to successfully penetrate the market. A SWOT analysis can be used in this particular case as well as the four characteristics of strategic resources namely value, rarity, non imitability and none substitutability. Basically, SWOT is an abbreviation for strengths, weaknesses, opportunities and threats that prevail in the environment in which the organisation operates and these can impact on its operations hence the need to utilise the strengths and opportunities that exist while attempting to avoid the weaknesses and threats that may exist. The major notable strength of Apple is that its iPhone product is unique and it has many features combined in one gadget. This has greatly helped the organisation to attract a lot of customers across the whole globe as a result of the combined features into one gadget. The opportunity for the organisation is that it can penetrate the market through its franchising strategy where by its product can be sold through its stores or the other subsidiaries which are already in operation. The major threat which is also a problem confronting Apple Inc is that South Korea’s mobile phone market is almost saturated and the phone network is driven by mainly three large organisations namely SK Telecom, KTF and LG telecom. The market is now mature and there are many competitors such as LG, Siemens, Motorola, Sonny Ericson and Toshiba among the others. Unless carefully designed strategies are put in place, it is pretty difficult to successfully launch a product in a new market that is characterised by stiff competition among many players such as South Korea. Samsung for instance is a local player and it commands a lot of respect among the other players in the mobile phone industry in South Korea. Another notable problem confronting Apple in its attempt to launch the iPhone in South Korea is product positioning. This is generally referred to as the way the product is viewed by the consumers and the way it is accessible on the market with regards to the place it occupies as well as the perceptions of the consumers’ minds compared to the other competing products. In order to find a suitable position for the product, the Company needs to make an analysis of the market and target customer groups which often involve market segmentation, targeting as well as penetration. This problem is compounded by the fact that the financial and economic environments in South Korea are ever changing hence the need for Apple to get quality information before penetrating the market. This will enable it to better position its product so as to be able to attract the customers. The other problem associated with ever changing market environments is that the value of the product may not be favourable to the targeted consumers which may result in limited sales. The problem of demographics in South Korea is another uphill task that can be faced by Apple in its efforts to penetrate the market. The population is mainly comprised of older generations which may not be very interested in fancy things such as a phone with an MP3 player as well as video player among other features. Most of the people comprising this generation would prefer to have these features separately since they are mainly concerned with the telephone services as well as internet access. The younger generation in particular would be attracted by features such as music and video players combined into one component which may be challenging for Apple to properly segment its market. Another notable problem likely to be encountered by Apple in its effort to penetrate the South Korean Market is the apparent of third generation (3G) services in its iPhone product. Whilst it may have outstanding features, the iPhone lacks one of the basic features given priority in the South Korean market. It is estimated that more than 40 million people in South Korea are user of the 3G service hence it will be a bit tricky for Apple to successfully penetrate this market given that its product does not have this facility. The service is treated as a matter of priority given that the majority of the people use their mobile phones to access the internet in South Korea. Though unique in other features, this may prove to be a challenging part of the organisation to successfully penetrate the South Korean market which is a bit different from the other markets. Of the four characteristics of the strategic resources including the following: value, rarity, no imitability and non substitutability, it can be noted that Apple is not characterised by all the above mentioned features which can as well pose a challenge to its operations. The value of its iPhone may not be readily accepted in all the markets the organisation tries to penetrate. It can be seen that though this product is unique, its value is fairly higher and it may not be favourable to the potential customers particularly those in South Korea given that there are many mobile phone operators who design products that also have soft touch services which are also found on the iPhone. However, the aspect of rarity where it can be noted that iPhone features cannot be found in any other gadget can make it a little bit distinct from the other products offered in the market. For instance, all the major players such as Nokia, Samsung, LG and Motorola have tried their hand in converging different features in one gadget but these were poorly received particularly in South Korea the reason why people prefer to carry both a cell phone and an MP3 player. The unique element found in the iPhone may give it a competitive advantage given that it is rare but there is need to make concerted efforts in changing the behaviour of the buyers. This goes hand in hand with the concept of no-imitability which can be noted that other players tried but they were not successful. This shows that a product is outstanding in the market if the other players fail to copy it which is usually the norm in the market where different products are sold. Though it might be difficult to imitate the product, it does not mean that there can be no substitute for it. The major important part about products such as cell phones is the telephone aspect of it as well as messaging where instant communication through voice or text messages can be done. These services can be found on any mobile phone gadget which means that the iPhone can be substituted. Strategies such as rarity, non imitability and value to a certain extent can give an advantage to Apple in its bid to penetrate the South Korean market. The best solution is that Apple should strive to continue differentiating its products such that it will be difficult for the other players to copy or imitate its products. By virtue of the unique features in its products which are able to support a range of activities such as mobile telephony, text messaging, internet access, musical facilities and additional wireless information services, Apple is better positioned to appeal to the tastes of many consumers regardless of age. As such, by integrating hardware, software and other specific services, the Apple is distinctive in that it provides end-to-end solutions for users seeking access to email, voice, messaging, and both internet and intranet applications as well as musical players which make it clearly different from other rival competitors in the market. Whilst there are various other competitors in the computer industry, Apple has state-of- the art products that are completely unique from those offered by the other competitors which is another reason that is likely to appeal to the customers to positively change their behaviour towards buying such kind of products. Against this, Apple should try to integrate the 3G facility in its products so as to increase the chances of gaining the favour of the South Koreans. It can be noted that Apple is actually taking a lead in global as well as mobile technology by virtue of its improved devices which possess extraordinary features that are not found in any other device offered by rival competitors. This greatly influences the behaviour of the consumers as they would develop a positive attitude towards unique products offered. This will be the most viable solution given that it will be meant to further strengthen the attractiveness of the product which already has handsome features. The other viable solution that can be taken by Apple is franchising whereby it can use the traditional mobile phone retailers to sell its products given that they are already in the market. This will make it easy for the customers to identify with this product given that it will be sold the normal channels they are used to. Other alternatives may be tricky given that the buying behaviour of the people in South Korea is mainly influenced by their cultural values and norms which make it imperative for Apple to follow the known channels when launching their product in this new market. Read More