An Insight on Apple Inc., Essay Example

Provide a company overview, and identify the countries in which the corporation operates

Introduction

Overview

Apple Inc. has established itself as one of the most successful multinational corporations in the world through  an active management reorientation process. Most of Apple’s success can be traced to its exceptional  marketing strategies exhibited by the firm. Apple has also exposed itself to a wide range diverse challenges due to its expansion into international markets.

The Market Command Capacity

Apple Inc., in addition to the the subsidiaries it owns, are known for developing the top tier technology in the world to date in regards to mobile communication, computers, digital music players and innovative cutting edge technology. Apple is most known for its Smartphone device, and its Mac computer line.  The company has positioned itself in a way where it’s the top in the market for production of communication and media devices, digital music players, and personal computers worldwide. Internationally, China represents Apple’s second largest source of revenue, while simultaneously representing a source for a wide range of labor law violations and patent infringement cases.  The company has also had much controversy in the media concerning allegations of tax evasion through its factories in Ireland.

Identify the types of market systems and types of legal systems that exist in the countries where the corporation operates. What effect do these have on the company’s operations?

“At the same time, China’s influence in global markets, its military modernization, and active diplomacy in all major regions of the world have demonstrated its growing potential to shape the global order of the twenty-first century and to reduce US preponderance in certain contexts. China is the state commonly viewed as most likely to be both willing and able to expand these areas of challenge in the future” (Foot & Walter, 2010).

The two

Discuss the possible sources of political risk for: (a) the countries in which the company has a presence and (b) the basic nature of their products and operations. If you were a political consultant for the company, how would you suggest the company approach its political risk given trends in international political systems?

Apple Inc. is subject to many political and legal restrains, both in the U.S. And abroad. The majority of these  limitations exist due to their desire to establish an international presence and penetrate global markets. This includes, amongst others the political and legal restraints. The Infiltration into a global market implies that the involved firms face the task of comprehending and complying with the restriction shared by both its local country and the international region. This is perceived along the description of both the legal frameworks that are associated to the respective operations.

Political barriers in new and local markets show, that it remains clear that the participation of Apple in international markets is challenging decisions made by the respective governments. Apple has placed an increased focus on its ambition to expand through cutting costs in the promotion of its success in the international market. This can specifically be seen in their behavior in Ireland. There is also political controversy arsing from Apple’s international activities. Reuters notes that the “ability to pay tax of just two percent of its $74 billion in overseas income over the past three years hinged on an unusual loophole in the Irish tax code that allowed it to channel profits into Irish-incorporated subsidiaries that had no declared tax residency anywhere in the world. U.S. rules that allow companies incorporated abroad not to pay U.S. taxes complemented the arrangement” (Dilger, 2014). This is an example of how Apple has utilized its relationship with Ireland to get around U.S. Taxation obligations. This is one of the key benefits of being a multinational company.

Legal demands and restrains experienced in the market In an effort to refrain from the possible bottlenecks that could lead to even more restrictions , Apple Inc. has considered an indirect approach in the introduction and subsequent operations into the various global shops (Min, Soo and Geng, 2012, 17). This includes their use of the reseller shops in many centers throughout the globe. These shops operate under the limitation of the legislation of the involved nations, which removes Apple Inc. from the legal consequence of being involved. A prime example can be seen with their Chinese sweat shops, which have gained a lot of attention in the media, but are still legally viable.

Identify the stakeholders the company must satisfy. Why is this process more difficult for companies operating internationally?

Apple is one of the few companies where the consumer has a vested interest in the company’s success. This can largely be attributed to the influence of Steve Jobs and his creative innovative marketing. China represents another major stakeholder, as Chinese labor and policies and the controversy that come with them, as well as competitors who have competed with Apple over patents all pose threats to the company. Investors represent major stakeholder group as well in regards to the fact that Apple is one of the highest valued companies in it’s current market. This puts multinational competitors that have a vested interest in Apple’s success, like HP in direct competition with Apple for global market share in regions like China and Japan. Canalys reported that Apple beat HP out to become the leading global PC provider. The report noted, “Apple, after reporting stellar results, became the leading worldwide client PC vendor in Q4 2011. Apple shipped over 15 million iPads and five million Macs, representing 17% of the total 120 million client PCs shipped globally in Q4. Overall, the total client PC market, including desktops, netbooks, notebooks, and pads grew 16% year-on-year. Excluding pads, the client PC market declined 0.4%” (Canalys, 2013). This shows that internationally Apple has been able to integrate a very difficult market to be the global PC provider.

 Summarize the company’s code of conduct. State the reasons why it is in the company’s best interest to follow its code of conduct when operating in foreign countries.

Apple is committed to the highest standards of social and environmental responsibility and ethical conduct” (Apple Inc., 2014). Apple has maintained a standard of excellence that is really unmatched in its market. Their products in addition to being innovative and cutting edge also have a stigma for being stylistic and preferred by a cult following within their consumer base. This coincides with their said virtue of wanting to change the world. In regards to Apple’s code of conduct, the company states on the website in brief, “The firm has sustained the theme of innovation in its activities. This theme relates to the interests shared by its clients in both the local and global markets. However, the promotion of such a concept requires the inclusion of the ethical consideration of the targeted clients” (Dilger, 2014).  The firm has been compelled to adopt this input in the development of the critical decisions in its application and resources.

Does the company have any social programs in the country/countries where it operates? If so, briefly describe one.

The main social initiative Apple has attempted to implement has been marketing itself as environmentally friendly. There is a major contrast between how the United States would view Apple’s level of social responsibility vers4es how China might view it.  Apple Inc. is based in the United States (US), which is fundamentally why Apple is considered a U.S. Based company hence proposing the country to be its local market. A comparison of the culture associated to market against that of the rest of the globe reveals and enhanced sense of diversity in a number of the company’s practices. Some global locations,like China, expresses an increased sense of conservatism in culture as compared to the US. Apple has made social strides to improve it’s labor activities in China according to Forbes, which states that, “a review of Apple’s Supplier Responsibility Report reveals that the company is taking action to stop unethical practices among is suppliers. These have included use of underage labor at 10 facilities, dangerous working conditions at two facilities, falsification of audit materials at four facilities, and bribery at one facility” (Sloper, 2014). This demonstrates that Apple is aware of the perception of its presence in China and is working towards improving its relations in the region with its workers.

What are the indicators the company might monitor to guide their investment and actions in the future?

Apple’s current growth trend without continued innovation, can’t last.  The company also has to make initiatives to produce products for third world countries with low capitol if the company really wants to expand into new regions.  These countries are known to have limited resources, and suffer from the digital divide, but they also represent the final frontier in respect to regions of the world that have yet to benefit from this new technology. The fact that Apple Inc. is attempting to expand into these regions, by producing more affordable technology is a major indicator that the company will be expanding its market share in the future.

References

Apple Inc., (2014). Retrieved from https://www.apple.com/supplier-responsibility/pdf/Apple_Supplier_Code_of_Conduct.pdf

Canalys (2013). Apple outperforms hp. Canalys Report.

Cox, M. B. (January 01, 2012). Apple’s exclusive distribution agreements: A refusal to supply? European Competition Law Review, 33, 1, 11-22.

Dilger, D. E. (March 14, 2014). Apple’s iPhone takes 80 percent of China’s booming premium phone market. AppleInsider

Min, G. K., Soo, K. T. Y., & Geng, W. T. Y. (January 01, 2012). Bundling Strategy in the IDM Marketplace. McDonald, Joe (2012). Apple pays $60M in China iPad dispute. USA Today.

O’Grady, J. D. (2009). Apple Inc. Westport, Conn: Greenwood Press.

Sloper, G. (2014) Why creative Crowdsourcing is good for business. Forbes.

Turut, O., & Ofek, E. (December 07, 2012). Innovation Strategy and Entry Deterrence. Journal of Economics & Management Strategy, 21, 3, 583-631.

Wan, Y., Hu, N., Ye, C., & Liu, L. (April 01, 2012). Business Blogging and Enterprise Strategy: Controversy and Evidences. International Journal of E-Entrepreneurship and Innovation (ijeei), 3, 2, 1-13.

Yoffie, D. B., & Slind, M. (2008). Apple Inc., 2008. Harvard Business School Publishing.