Apple Company: Multinational Enterprise Theory
Keeping the bar great in its class and beyond, Apple is the portrait for the greatest branding leading technology that deliver a unique overall experience in the electronics consumers market. Apple Company moved from being number seventeen to number eight globally as a company that have shown growth through an increase in sales (Lashinsky 2012). This has been achieved through the adaption of a standardised marketing mix internationally. Consumers have thus continued to follow Apples’ product launches with enthusiastic anticipation. The company’s esteemed customers are fast in integrating its sleek products into their way of life. Enduring in its movement of the first to market goods, Apple launched its ipad in 2010 creating the firsthand tablet category in the process (Lashinsky 2012). This was followed with a unique international marketing mix that took various considerations. Some of these considerations included consumers spending habits, power and their cultures.
An adapted marketing mix is a worldwide marketing approach or strategy of fine-tuning each of the marketing mix components to suit each international market. Apple Company, due to its cultural backgrounds, product manufacture preferences and spending power of its consumer has adjusted its international marketing strategies (Lashinsky 2012). The aim of this adjustment has been as a result of consumers’ wants and needs, consumer ability to adapt to Apples’ products, marketing channels, product prices and promotion strategies that are currently available in the world. This has enabled Apple Company to open up new markets globally.
Although this comes with a cost, Apple Company has been in a raising trend in command to international markets. It has been capable compete successively with rival companies like Microsoft (Lashinsky 2012).
Apple Company faces alternatives in marketing its products across the world. An extreme strategy involves customisation or adapting (Lashinsky 2012). The company has introduced unique products in each country. This has been based on the belief that customers tastes differ between countries, in the world. Standardisation, on the other hand, involves making of a single international product believing that the product can be sold in all countries across the world. Something else that Apple Company has embraced in its endeavours of international marketing is adaption (Lashinsky 2012). Through a marketing mix that is standardised across the globe, Apple Company has been endeavoured to produce similar global products while at the same time obtaining economies of scale in manufacturing.
Head office of Apple Inc is located at Infinite loop, Cupertino, in California. Company’s specialist network includes autonomous professional service suppliers and technology referring firms that specialize in Apple and third parties solutions (Mcdonald & Leppard 1993). These teams of professionals are proficient in Apple technologies, and they help in providing services to the company’s customers. They provide on-site technological services and support to home users and business of all sizes. The specialists carry out systematic training and assessment.
Apple specialists are also located in Africa, Latin America, and Middle East Europe, as well as the Asia Pacific Regions. This ensures that Apple customers receive timely and efficient services all over the world without necessarily moving for long distances looking for these services. They offer repair services and have an exclusive access to genuine Apple spare parts (Mcdonald & Leppard 1993). Apple Company has also over two hundred retail shops or stores globally. The retail outlets aid in the distribution of Apple products throughout the different locations.
In the affluent communities, today, Apple Company has observed that there is an increase in fragmentation of markets. The company has also observed that buyers are demanding more and more services and products to meet their precise needs (Hastings 2013). As a result of this observation, Apple Company has adapted a marketing mix that will enhance its global marketing strategy that reflects its influence and impact on the company. Crucial in the development of this international marketing matrix is the clear positioning and segmentation of the company’s products and promotion (Hastings 2013). Achievement of a standardised international matrix by Apple has been as a result of using both international and local sources, international marketing operation, an international company name and an increased knowledge of consumers problems and needs (Lashinsky 2012).
Markets and consumer needs are becoming progressively global for many services and products. The extent of globalisation differs significantly from market to market in the world today. This has made Apple company take into account factors associated with global marketing strategy and marketing mix that focuse on legal factors, language, culture and consumer needs. The culture of the customers can determine the customer’s behaviours towards Apples’ products (Lashinsky 2012). This has also made Apple company adapt different advertising methods that based on local specifics so as to account for regional cultural differences. This has led to an increased buying of Apples’ product despite the different cultures across the world.
In its international marketing matrix, Apple Company has also acknowledged the ability of language to increase the marketability of products. Language enables an in depth understanding of culture, and this has made Apple Company produce its products in some local variations, in the language pack, such as English and French (Cohen 2006).
Apple Company offers some outstanding discounts on renewed products. Such products include iPod’s, computers and ipads. The company also gives a one year warranty on all products. Authorised training centres located in United States provides instructions to customers on how to use the various products. They are given free tutorials on how to use Apple’s specialized applications, Mac systems and the Mac operating system X. An extensive variety of certification examinations and courses offer inventive learning prospects for information technology and creative educators and service technicians. These free courses are offered free by the Apple Certified Trainers (Cohen2006).
Apple Inc. professional network website provides a search tool that permits visitors to locate any proximate certified Mac products specialists in all locations, where Apple has been established. Apple’s online shopping offers a free shipment of goods that cost over fifty dollars.
Apple is an exceptional brand computer that does not try to compete for markets by use of prices. Apple Company has substantially lowered its product price after launching new products. The company uses premiums and skimming strategies (Hastings 2012).
Apple Company offers a wide range of electronic devices. It offers laptops such as MacBook Air, Mac mini and MacBook Book Pro. It also offers server services such as Xsan, MacOS X and Xserve. Its accessories products are Led cinema display, computer keyboards and magic mouse. Other products of Apple Company include phones such as iPhones, iPod, developer and ITunes (Lashinsky 2012).
As Apple Company works up for the launch of new products such as ipad, this has made the company to ride high on the thriving international sales and net revenue. In the second quarter of 2010, sales of its products such as iPhone doubled. This was a result of adjustment in marketing strategies that were adapted across international markets. IPhones’ sales in Asia-Pacific region rose by 474 percent (Lashinsky 2012). There are factors that encourage adaption of markets in globalisation, and they include different economic situations in different countries, tax, legal and political barriers. Additional factors that have been essential in making Apple Company adjust its international marketing matrix in an increasing competition in the electronics industry and the acquisition of foreign local brands (Mcdonal & Leppard 1993)
As companies endeavour to sell their products and services to a more changing demography in increasing markets around the world, they are realising that they can raise their sales when they adjust and recreate their marketing matrix in a standardized manner. Companies like Apple have accomplished much success by its ability of adapt and standardise its marketing mix based on the different aspects of marketing matrix (Mcdonald & Leppard 1993).
This has allowed the company to have independence of addressing the cultural differences and gaps by going past translation, so as to create something that arrests the essence and spirit of a message. Apple Company has now become one of a leading companies in the electronics industry (Hastings 2012).
Apples universal marketing secret is that it has come to recognise that its brands must resonate, in both national and local markets. This is irrespective of whether a market is being demarcated by geography or defined by culture or language. In order to achieve this, Apple Company has adapted strategic and systematic plans that create their content and messaging. This has been an appropriate marketing matrix strategy of adapting and standardization (Lashinsky 2012).
Internationalisation Process Theory in the Apple Company
The international marketing strategy encompasses the development and maintenance of a strategic fit between the international company objectives, goals, competencies, resources, and obstacles presented by its international market. Most companies are nowadays striving to capture not only the local market, but also the intentional market as the inter-companies competition become stiff (Krug 2008). There are a number of factors that have influenced the internationalisation process. These are the level of product standardisation, market knowledge, level of the country development, strategic reason, the entry mode and the significance of local resources and the local market (Krug 2008). In an attempt to understand internationalisation process, various internationalisation process theories have been adopted in explanation of firm’s experiential learning in foreign markets, as well as the incremental accumulation of commitment to foreign markets by international companies. Some of these theories include the Eclectic theory, Uppsala model, Stage model and Born Global concept.
In the Eclectic theory, a company is motivated to reach the international market by the need to achieve certain advantages. They include internalisation advantages, ownership-specific advantages and location based advantages. The theory outlines that a company possesses more ownership specific-advantages, then it enjoys the greater incentives to internalise them. In addition, the company finds it profitable to exploit the advantages staged outside the national boundary (Krug 2008). This makes the company to venture in the international market. However, the model has been criticized by numerous scholars. They argue that the ownership advantage in the Eclectic model eliminates the cost incurred in the acquisition of that advantage. They further argue that location and ownership advantage are not essentially separable (Krug 2008).
In the Uppsala Internationalisation model, the internationalisation process is usually viewed as an incremental process that involves four main stages. These stags include; export via independent representatives, no regular export activities, sales subsidiary and manufacturing (Leoncini 2011). Uppsala model focuses on the development of a firm and specifically its gradual acquisition, integration, and the application of the foreign market knowledge and operation when increasing the foreign market commitment (Leoncini 2011). This model assumes that lack of such knowledge that is a significant obstacle to the development of international market can be acquired through foreign operations. The growing experience and knowledge on foreign market is believed to lower the perceived transaction risk and cost, hence increases the company foreign market commitment.
Stage model is a traditional approach to internationalisation. In this model, the company develops solidly in its home market before exploring the international market. After the establishment of a firm foundation, the company gradually explores the opportunities for expansion into the adjacent countries (Leoncini 2011). As the company familiarity with foreign markets grows, then extensive expands to new global regions becomes favourable. Most of the large multinational companies have followed the same path.
In the born global model, the international company is regarded as a business organization that from origin, pursue to build a competitive advantage from the resource utilisation and the sale output in different countries. This model regard born global companies as those that have managed to achieve a foreign sale of at least 25 percent within a period of 2 to 3 years after inception (Krug 2008). According to the Born Global model, a company benefits from the accelerated process of accessing competitive advantages in the international market. In the international business vantage point, early ad quick internationalisation of the company provides the company with a business model that allow them to be efficient, effective and competitive from the start. However, in some instances, it has been realized to be challenging to achieve a rapid international company expansion due to the complexity that result from the born global strategy (Krug 2008).
The Apple Inc. international branding strategy is best explained by the stage model. Apple Inc. marketing strategy involves the development of innovative products and provision of digital services with a digital hub strategy. The Apple Inc. computer products usually serve as the cardinal hub for its digital other gadgets that include IPod, still cameras, I pads and cellular phones (Scott 2008). Apple Inc. has strived to make customer experiences while using its gadget to be central. The company first developed a firm foundation after inception in 1977 before venturing in the international market. In 1977, the main product of the Apple Company was the personal computers that were only available in America. The Apple Company expanded its product area and started selling video games, computer software, IPod and PDA. Some of these products were successful while others were not (Scott 2008). After establishing firm market foundation in United States of America, the company gradually started to explore the foreign opportunities especially in the adjacent countries such as Canada. The innovative idea complemented with high technology, as well as trendy design attracted the customer in neighbouring countries (Scott 2008).
As the Apple Company gained more experience and familiarity with the foreign market, the company expands its store to new global regions such as Middle East, Asia, Europe and Africa. Today, Apple products are available in more than 88 countries worldwide. This shows how significant overseas market is to the Apple Company. Apple Inc. is currently believed to have a dominant share in the US market (Scott 2008). This has provided a strong foundation that enhanced the company’s international success. In 2006, the Apple Inc. took a world market share of 5-6 percent. This international market growth is expected to grow as new Apple store became launched in different states.
Before 2001, Apple Company depended solely on the current channel partner in product selling, in US. However, after the establishment of direct sales using the Apple store, the company has become the most successful retailer in US. This has made the company replicate the same strategy to the international market (Scott 2008). Currently, the Apple Inc. has more than 177 Apple store throughout the world. The application of stage model in the process of internationalisation has enabled the Apple Inc. to survive the international competition from companies such as Nokia, Huawei, Toshiba and Dell.
Country of Origin Impact on Customer Product Valuation
The internationalisation of the business market has resulted into unique problems to the marketers, consumer and manufacturers. The country of origin of the product has been found to influence the consumer valuation of the product, as well as the Company’s decision to manufacture (Verlegh 2011). Numerous studies have found that the product country of origin influences the consumer purchasing behaviour. Despite that Apple most products are manufactured in different countries such as China, many consumers still maintain a perception of the country of origin.
It has been found that many Apple product consumers prefer the product because they are manufactured in United States of America. This is because United States of America has higher positive influence on consumer behaviour than any other country. Furthermore, this positive influence has been attributed to a positive association that US citizens associate Apple product with. Apple products are the commonly used devices throughout the entire United State of America (Verlegh 2001). Therefore, this creates a positive outlook to the international market that influences the international customer to prefer Apple products.
The consumers’ micro and macro country image normally influence the equity associate to a product from a certain country. For instance, in given market, the Apple product consumers’ image of United States of America influences the equity of the brand. United States of America influences the main dimension of the Apple brand equity such as product loyalty and quality (Verlegh 2001). Another key competitive advantage with regard to the country of origin is the location of Apple headquarters. Silicon Valley is well known for technological innovation and advancement. Therefore, any product perceived to be manufacturer from the Silicon Valley influences the consumer attitude towards that product. Location of Apple company headquarters plays a crucial role in persuading the customer purchasing pattern (Scott 2008).
The rule of origin has favoured the internationalisation of the Apple company goods to the international market. This has been coupled with a positive image of United States of America in the international arena. Its vast involvement and domination of the international market have influenced the purchasing trend of Apple products (Scott 2008). Large segment of the world population has positive perception and acceptance of brands that originate from United Stated of America. This image has emerged from national characteristics, political and economic background. Other factors that have inculcated a positive perception of Apple products are the domination of the world economy by United State of America. This has made possible to have various products from US that are acceptable globally including Apple products (Verlegh 2001).