Apple’s Global Operational Strategy Essay
Apple Inc. is the multinational company which has worldwide distribution network for its products. It is pursuing a truly globalization strategy because the design and features of its products are standardized across borders. Moreover its advertisements are also similar across cultures. Although it is based in California, USA but its products are available in many countries from Atlantic to Pacific. Recently it opened its stores in Los Gatos, Sydney, Glasgow and Beijing. Apple Inc considers the world as a single market and it supplies products which has similar brand positioning.
Take for example its most popular product, iPod, which is a symbol of portable music device and is famous for its sleek and stylish design. (Levy, 2008) Apple Inc. from the start is following differentiation strategy. Therefore it has made products which are very high tech but they also have a touch of humanity. Apple has a complete different branding strategy from its competitors such as Microsoft, Dell and HP. Apple positions its products in customer’s mind as unique and stylish. Customers feel pride and honor in using Apple’s products.
The price of the products also reflects the promise of quality and associated esteem. Apple has worldwide sale although it charges premium
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Read about “Apple differentiation strategy“
Apple has collaborated with different organizations such as Google Earth, TV channels (ABS, CBS, FOX, and NBC) and Oxford and Cambridge University to offer some of their programs on iTunes. (Penenberg, 2008) Apple has a very sophisticated R&D department in USA and distribution network worldwide. Its year 2008 expenditure on R&D was $ 1109 million and on selling and distribution was $ 3761 million. Apple has focused on opening new retail stores in every city as possible. At the end of year 2008, Apple had at least 246 stores selling its various products.
The high rate of opening new stores has led to a record capital expenditure of $ 250 million during the last four years. (Penenberg, 2008) Apple is also affected by the recent global financial crisis as its sale has plunged since consumer spending has dropped. The sales of many retail outlets of Apple have decreased. However Apple has found a way to secure its position in this distress condition. Because of this crisis many construction work has been stopped as no capital was available for investment. The constructors who had already made big shopping complexes found that they are unable to sell off the shops. Read about Apple internal growth
The cost of leasing has now decreased considerably and many retail outlets of Apple have recently seen a decrease in lease expense. Hence Apple has secured its position even in this condition of global crisis. (Shenkar & Luo, 2007) Also Apple’s retail operation is much diversified and it has its stores in all the five continents. When Europe and America were hard hit by financial crisis, Asia as an emerging market gave a very good cushion for its plunging sales. Apple has used the globalization strategy to its advantage. Also read Apple corporate governance issues
Globalize operations always prove to be an opportunity if they are well diversified and Apple has made right choices in formulating its strategy of global operations. (Penenberg, 2008)
Levy, S (2008). The Perfect Thing: How the iPod Shuffles Commerce, Culture, and Coolness.
Simon & Schuster. Penenberg, A. L (2008). All Eyes on Apple, Fast Company, Retrieved July 31, 2009, from Fast Company Web site: http://www. fastcompany. com/magazine/121/all-eyes-on-apple. html? page=0%2C4
Shenkar, O. & Luo, Y. (2007) International business. New York: Sage Publications