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Apple Inc. Affected by Globalization and Technology

For more than forty decades since its creation, Apple has continued to change the world with a string of products that have upended industries, reshaped society, and revolutionized computing. The company’s success is partly attributed to its ability to leverage technology. This paper will assess how globalization and technology changes have impacted Apple. It will also apply industrial and resource-based models to determine how the company could earn above-average returns and assess the influence of its vision and mission statements on its overall success. The paper will also assess its stakeholders’ categories and their roles in its success.

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Globalization

Globalization encompasses several interrelated processes, such as trade and finance internationalization. It is the incorporation and interaction between people, entities, and governments from across the globe. The entire globalization process influences political stability, information technology, and economic progression. Today, the world is interlinked in every aspect, making it a global village. In business operations, globalization has ensured that goods and services can be produced and used anywhere in the world. Over the last few years, Apple has drastically transformed how businesses are operated across the world. On top of its 43,000 employees in the United States, the company also has 20,000 additional workers overseas. Furthermore, Apple has contractors that employ more than 700,000 people. Interestingly, all of these 700,000 people work outside the United States, particularly in Asia and Europe (Hanson et al., 2). It is cheaper for Apple to produce from outside the US due to low labor costs. For instance, in 2011, the company paid its 13,920 American employees approximately $750 million compared to $320 million paid to 27,250 overseas employees (Hanson et al., 2). This is an indication that it is cheaper for Apple to manufacture overseas.

The significant success that Apple has had in the market over the years has been partly attributed to globalization. It has used the phenomenon to carve a competitive edge over its rivals. China, where more than half of Apple’s products are manufactured, boasts of low cost and a disciplined labor force. The company has managed to exploit this situation to maximize its profits. In addition, Apple has taken most of its manufacturing operations overseas to improve efficiencies and reduce costs. Southeast Asia and China play host to many of Apple’s subassemblies and upstream components. This implies that carrying out the final assembly in the United States presents a myriad of logistical challenges to the organization. As compared to the US, China has more agile and much larger factories.

Technology

Technology is increasingly changing the way many businesses are run today. Apple recognizes the fact that technology keeps developing every day. Machine learning, big data, and artificial intelligence are some of the most significant technological advances that have gained popularity within the company over the years. These technological inventions have narrowed the gap between the company and its customers. In June 2020, when Apple announced the iPad OS, macOS, and iOS, it alluded to the fact that several updates and features had machine learning and artificial intelligence.

Artificial intelligence has indeed had significant impacts on the company’s products and services. It allows facial recognition for Homekit, which is a smart home solution that enables users to communicate and control accessories connected through an app. The HomeKit framework allows users to create action controls and configure accessories. Users also have the liberty to cluster their actions together and use Siri to trigger them. Apple has also allowed security cameras that are Homekit enabled to use photos tagged on the phone of a user to identify people at the door. The technology can even call out the name of the person standing at the door. Apple has also used artificial intelligence to help users track their sleep. Through Apple Watch, machine learning can classify a user’s movements and detect if he or she is asleep and for how long. The watch also uses microphone and motion sensors to detect if a user is washing his hands.

The technology of big data analytics is considerably driving Apple’s decision-making processes. The data is primarily used by the company to establish the best way to approach consumers with its technologically advanced products and services. Big data analytics benefits the company in its application design. This helps it to discover how customers are using its many apps in real life. The information helps in altering the app’s future design to fit with various tendencies of customers. Big data analytics also helps the company to keep track of the health of its customers to improve their lifestyles. Through partnerships with mobile applications that are related to health, Apple collects this vital information and utilizes it to treat sicknesses, offer protection against preventable diseases, and prevent the rapid spread of diseases.

Social media is another significant technology frontier that Apple has leveraged over the years. Although the company cannot be said to have a large social media presence, it uses the sites to create much buzz during its launching events. People queue for days outside Apple stores to wait to purchase their new products after the launch. The absence of Apple on Twitter and Facebook is not accidental but a strategic move. In a way, it helps to prevent users from flooding the company’s official social media pages with negative messages. However, the tech giant uses social media platforms like Twitter, Instagram, and Facebook to promote its products. It does so by pushing ads that encourage users to gift their loved ones with Apple products.

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Industrial Organization Model

Apple uses the industrial organization model to assist it in maintaining a huge stake in a market that is highly segmented. Through this model, the company narrows its pool of competition and creates entry barriers to maintain its foothold in the phone tech industry. Apple operates in a market that has very big competition. There are many players within the industry vying for its market share. Some of its competitors are Samsung, Huawei, LG, and Sony. However, all these competitors use the android operating system, which is an open platform for all (Hitt et al., 3). Apple, on the other hand, uses a closed system that is an end-to-end user platform. This makes it stand out from its competition, a factor that makes it easy to control its market segment.

The highly segmented market that Apple operates in makes it difficult for new entrants to thrive. Several political, technological, sociological, and political barriers imply that for one to enter the market, one will encounter a lot of stakes to surmount. Apple has struck a deal with the Chinese government to necessitate its operations there. This way, it has managed to gain a strong footing in the economic and political infrastructure of the country. In addition, Apple has managed to accurately its competitors’ next possible moves and make relevant and strategic moves to beat them. It did this with Sony and launched the iPod music, which penetrated Sony’s market segment.

Resource-Based Model

Apple considers its resources as the key pillars of its performance that enable it to gain and maintain a competitive advantage. In the middle of its competitive environment, Apple relies on its internal resources to carve a competitive edge. Thus, it utilizes its internal resources to exploit external opportunities and deal with threats. The company’s resources are either tangible or intangible. The company’s headquartering in California is one of its key tangible resources where all its operations are engineered and executed. This is in addition to its labs and workshops in San Francisco and other outlets spread across the world. On the other hand, intangible resources are those that have no physical presence. They include Apple’s trademarks, intellectual property, and brand reputation. Indeed, the company has massively benefited from its brand reputation, which it has built over time. Its OS is one of its strongest intellectual property resources that has also separated it from its competitors.

Both the tangible and intangible resources rely on each other for effectiveness in performance. Although Apple operates in a very competitive industry, it can only achieve its competitive advantage if it uses its unique bundle of resources. Compared to Samsung Electronics, for instance, which also makes the same products (smartphones and tablets), Apple’s products are sold at much higher prices, giving it bigger profit margins. Samsung cannot do the same because it lacks the brand recognition that Apple boasts of. Besides, it does not have the capability to design products that are user-friendly the same way Apple does.

Vision

Apple’s vision statement is “to make the best products on earth, and to leave the world better than we found it” (Apple Mission and Vision Statement Analysis, 1). This vision statement strengthens the company’s strategic management, especially when it comes to decision-making for the future. It sees itself as the global leader when it comes to designing and developing products, hence the “best products” tag. This also challenges the company to always strive to push for novel, innovative products.

Mission

Apple’s mission statement is “to bring the best personal computing products and support to students, educators, designers, scientists, engineers, businesspersons, and consumers in over 140 countries around the world” (Apple Mission and Vision Statement Analysis, 1). This mission statement takes into consideration that the business landscape is changing, a factor that influences Apple’s possibilities. The changing trends in consumer tastes inform the development of this mission, which seeks to address the prevailing concerns in the global market.

Stakeholders

Apple’s success is partly attributed to its ability to satisfy its various stakeholders who happen to have different concerns. The main stakeholder groups of the company include customers, employees, investors, suppliers, and distributors. Consumers are the people who purchase the company’s products. The company designs efficient and cutting-edge technology products to meet their needs. Employees are the ones who execute the company’s vision and mission. They are the company’s brand ambassadors and help satisfy the concerns of other stakeholders. Investors are mainly focused on maximizing the returns on their investments. To satisfy their interests, Apple always ensures that it registers excellent financial performances. When it comes to suppliers and distributors, the company imposes and monitors requirements on their employment practices to ensure that it does not conflict with its corporate culture.

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References

Apple Mission and Vision Statement Analysis. (n.d). Mission Statements.

Hanson, D., Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2016). Strategic management: Competitiveness and globalisation. Cengage Learning.

Hitt, M. A., Ireland, R. D., & Hoskiss, R. E. (2016). Strategic Management. Cengage Learning.

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