Apple, the devices for the modernise culture

Loh Chee Kian Ivon Chong Poon Soon Min Chai Yi Bin Chua Li Jing

Well-Known Products
Hardware line:
Macintosh line of personal computers iPod portable media players iPhone

Software products:
Mac OS X operating system iTunes media browser iLife iMovie, iTunes, iPhoto Final Cut Studio video editing
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History of Apple
1975 Steve Wozniak was working for Hewlett Packard (calculator manufacturers) by day and was a computer hobbyist by night. He realized that the prices of some computer parts had gotten so low he could buy them himself. Decided to work with fellow hobbyist Steve Jobs to build their own computer On 4/1/1976 released the Apple I (for $666) and started Apple Computers. Had 8 KB of RAM.
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Apple I did not have a case the user was required to build a box for its components. (picture from Smithsonian) Apr 1,1976
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Entry Strategy
Exporting Benefits: Minimize risk and investment Learn oversea market Utilize existing machineries

Disadvantages of Export
Trade barrier Tariff Transportation cost

Joint venture

Advantages of JV
Risk is shared among partners Minimize financial risk and political uncertainty

Current Expansion Strategy

Joint Venture

Apples Strategic Alliances

IBM Intel
Acura, Audi, Honda, Volkswagen, Ferrari, Nissan, and BMW

Nike

AT&T

Apple and Intel

Microprocessors from Intel Deliver a high-performance chip Operates at low enough temperatures Notebook computers and smaller devices E.g. Mac Mini and iPad.

Apple and Nike

Apple partnered with Nike in 2006 to reach runners and gym goers. Nike+iPod Sport Kit. Unique personal running experience. Strengthened Apples market share and reputation.

Apple and AT&T

Introduction of the iPhone A logical choice for a service provider. AT&T is the most popular carrier in the U.S. servicing 58.7 million customers, Strengthens Apple sales for entering the cellular phone market.

Benefits to Apple using Joint Venture

1. Share Knowledge and Expertise To obtain new technology, best quality or cheaper cost. Team up with other companies who own the resources to provide the technology or material. E.g. The alliance of Apple with IBM and Intel

Benefits to Apple using Joint Venture

2. Form synergy and competitive advantage Decrease the risk of Apple to enter a new market or expansion to other countries. Partners leverage off each others strengths, bringing synergy into the process. E.g. Apple and AT&T to enter in to U.S. cellular phone market.

Current Expansion Strategy

Exporting

Exporting
The biggest breakthrough of Apple in exporting to the global market is introduced of the iPhone4 iPhone was released in 88 countries An analyst estimates that around 55% of iPhone sales are now made outside of the U.S (Tim Bajarin) Overseas sales have become very important for Apple

The major countries Apple export to are Americas, Europe, Japan, and Asia Pacific. Apple emergence of a new markets through exporting strategy Apple has increased their total foreign sales and profit from essentially the same products over the long term

Figure 1: This table summarizes the net sales in different region during the three years ended September 24, 2011 (Source: AAPL, Annual Report 2011)

China is the country that Apple focuses for the global expansion. China have growing and stable market ,biggest population, cheap labor with strong economy. Produced product more effectively Apple can avoid the import taxes by manufacturing product in China

Future Expansion Strategy

Apple Inc.
A simple question? The current expansion strategy : good/ bad? First suggested expansion strategy:

Joint Venture
Partnership or alliance among two or more businesses or organizations based on shared expertise or resources to achieve a particular goal (Gingrich, 2007)

Basic steps to carry out Joint Venture:

1. Have target market 2. Comprehending the needs 3. Come out with more SBU to meet the demands

Implementing Joint Venture + product development Example: Apple collaborate with Furniture company? With automobile company?

Joint Venture help firm to step into other fields and ALSO supporting the firm in the firm in the current industry! The current main competitor : Samsung Having Joint Venture with similar firm such as Sony, Capital Resources Products variety Expertise

DIRECT INVESTMENT Market Development Align well with direct investment HOW?

1) Set the manufacturing site at third class countries. - Sell products in lower prices

2) Invest in Cyber Caf - Own i-Operating system - An opportunity for Apple - Gain huge share market

CONCLUSION

The End. Thank You!