Professional Documents
Culture Documents
By:
Name
Student ID
Major
:
:
Class
Submission Date
09.53.01.1082
Management
:
Module name :
Strategy
Lecturer
TISIA PRISKILA
BA X- 42
International Marketing
Mr. Arifin Assaly
:
Executive Summary
In today's business environment, it is common to expand into international markets
because it has given businesses a perfect opportunity for reaching to the previously
unreachable markets. To expand and survive in international market, Apple have to analysis
in-depth of forces in the internal and external environments that can impact the success of the
companys strategy over time. Internally, analysis of the firm environment focuses on the
resources such as: human resources, financial resources, physical resources; and capabilities
(5M) within the company which strategies can be based upon. Externally, analysis of the
environment focuses on macro-environmental factors (analysis through Politic Economic
Social Technological Analysis) and micro-environment factors (analysis through Porters
Five Force Analysis).
High intensity of industry rivalry and potential new entrants can be significant threats
to Apple Inc., but Apple always smart to steal the attention of the market with its admirable
marketing strategies. Some of Apples strategies are: innovative design of products, Apple
retail store, good combination of iPod and iTunes and perfectly launching timing, strategic
partnership, and global market. And the most important strategy of Apple is Keep the world
and media surprised to generate many attentions. All of its strategies make Apple can stand
up against the competitive rivalry.
To enhance the effectiveness of Apples strategies approach for better result, I have
come out with some recommendations that can be found in this paper. I hope my
recommendations can help Apple Inc. to survive, develop, and be a market leader in the
future.
Table of Contents
COVER PAGE
EXECUTIVE SUMMARY...........................................................................................ii
TABLE OF CONTENTS..............................................................................................iii
CHAPTER I
INTRODUCTION
1.1 The Objective and scope of the report..........................................4
1.2 The Important of Management Change and Development...........4
CHAPTER II
CONTENTS
2.1 The Brief History of Apple Inc....................................................5
2.2 The Organizational Environment Factors....................................5
2.2.1 Internal Environment Factors.............................................5
2.2.2 External Environment Factors............................................7
A. Macro-environmental Factors.......................................7
B. Micro-environmental Factors........................................8
2.3 Apples Strategy Stand up Against Rivalry................................10
CHAPTER III
APPENDICES.............................................................................................................14
REFERENCES
16
CHAPTER I
INTRODUCTION
1.1 The Objective and Scope of the Report
The main objective of this report is to find out the importance of international marketing
strategy in Apple inc. to survive long in international market and stand up against the
industry competitors.
The scope of this report is focused on the critical internal and external environment factors
have strategic implications for Apples future and strategy of Apple stand up against industry
rivalry.
1.2 The Importance of International Marketing Strategy
For some businesses, survival depends on the expansion of international markets because it
has given businesses a perfect opportunity for reaching to the previously unreachable
markets. International Marketing has great significance for both the economic development
of countries and the profitability of individual business firm. It helps in the innovation of new
products that are in line with the upcoming market trends, expanding existing market,
accumulate more capital, helps in balancing international payments, increase profits and
extend production facilities. Therefore, learning International Marketing Strategy can help
companies to analysis the environment that influence international marketing and to develop
strategies so that the companies can survive long in the international market and can stand up
against industry rivalry.
CHAPTER II
CONTENTS
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severe blow.
Financial resources (Money)
Apple currently holds a very strong financial position. Over the last several
years they have experienced an increase in their growth, sales, net profit, and
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stock price. One of Apples top financial strengths is the fact that they do not
pay out any dividends (see appendix 1). This enables them to re-invest the
money into capital structures and spend a high amount of money on R&D;
-
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3. Socio/Cultural
Restriction of culture has effects on Apples profitability. Different language
also becomes the significant threat for Apple. Adapting to the differences in
culture is not very easy and Apple should try to build value into its company
name. This is being done in hopes that branding will eventually explain the
honesty, integrity, quality, and good services of Apple.
4. Technological
The technology and entertainment industries are constantly and rapidly
changing. It is uncertain whether Apple will be able to sustain its brand's
reputation
for
innovative
design,
continually
release
technological
breakthroughs, and launch new products that will "hit the consumer mark.
b) Micro-environmental Factors
This environment influences Apple directly. I will examine the industry analysis
through Porters Five Forces Analysis (see appendix 3).
1. The Threat of New Entrants
Many new entrants from backward, forward, and cross-industry integration can
threat the position of Apple. But, high barriers to entry especially the strong
strategies of Apple will make new entrants can not survive on the market
easily.
Page | 7
(i-Phones
competitors);
MovieLink,
CinemaNow
(Apple
TVs
All of the internal and external environmental factor can be concluded become the strengths,
weaknesses, opportunities, and threats of Apple Inc. (see appendix 4).
While competitors seek to imitate Apple's successful products and the innovative
complementary relationship between iPod and iTunes, Apple continues to introduce
ground-breaking new products iPhone and Apple TV timed perfectly to achieve first
mover advantages.
4. Strategic Partnerships
Apple has garnered major success for their product by way of strategic partnership with
other well-known brands, such as: Volkswagen of America, Starbucks, Nike, Button
Snowboards. This was a strategy moves to increase demand, meet sales goals, increase
Apples marketing exposure and build consumer confidence.
5. Global Market
Apple's strategy also involves the pursuit of opportunities to create demand for its
products in the global market. In today's business environment, it is common to expand
into international markets when domestic markets mature and commodity pricing tactics
infiltrate the industry. Additionally, operating and selling beyond the home market can
enhance the company's ability to compete with major rivals and bring knowledge into
the organization to expand its pool of innovative ideas.
Beside of five major strategies, Apple also has the good public relations and promotional
aspect. It maintains the good relationship with media. The most important strategy of Apple
is: Keep the world and media surprised to generate many of attentions.
CHAPTER III
CONCLUSIONS AND RECOMMENDATIONS
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3.1 Conclusions
Apple Inc. is a company that designs, manufactures, and then sells desktop and
notebook computers, portable digital music players, and cell phones. At this time, Apple not
only become the world's largest technology manufacturers, but also became the company's
most profitable.
There are some environmental factors that can impact the success of Apple strategy
over time. Internally, Apple has innovative and creative human resources, strong financial
position, good machinery, high quality of materials, and core competencies which will
support the implementation of Apples strategies. But, unfortunately, the pricing of Apples
products is a bit high for average customers. Externally, Apple faces many threats from micro
and macro environmental factor. Not only from political, legal, economy, sosio/cultural, and
technological (indirectly) but also from potential new entrants, substitutes products,
bargaining of suppliers and buyers, and competitive rivalry (directly).
Innovative design of the products, Apple retail store, good combination of iPod and
iTunes, perfectly launching timing, strategic partnership with well-known brands, and global
market have been fundamental to Apple's success to stand up against its competitive rivalry. All of its
admirable marketing strategies make Apple always can steal the attention of the market.
3.2 Recommendations
After I analyze the internal and external environmental factors, I have come out with
recommendations for Apple Inc. to enhance the effectiveness of Apples strategy for better
result.
1. Develop close relationships with suppliers. Rather than searching for the supplier of
lowest cost, I think Apple should maintaining a collaborative and exclusive business
Page | 11
relationships with handful big suppliers. It will help Apple to mitigate the power of
suppliers and help to lock in attractive component prices.
2. Expand the Apple store locations. Providing more points of direct contact with buyers
will enable Apple to provide better services to customers and bring Apple experience to
more people.
3. Apple have to alert with its cost management to maintaining its price flexibility and to
increasing its competitive position relative to low priced competitors.
4. Apple should continually invest in Research and Development to stay ahead of and lead
radical products and technology discoveries.
5. Continue to seek and create new innovations in accordance with developments in
technology that constantly changing, so that Apple is remained as the market leader in
industry innovator.
APPENDICES
Appendix 1: Apples Financial Ratios 2009
Current Ratio
Quick Ratio
Industry
1.91
1.54
Apple
1.88
1.86
Microsoft
1.82
1.58
ROA (%)
ROE (%)
ROI (%)
Net Profit (%)
-48.69
-415.91
-370.59
-50.25
10.59
20.49
20.49
15.61
18.71
36.83
33.64
24.93
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Debt/Equity (%)
Debt/Assets (%)
-14.89
10.36
0
0
9.49
7.39
2.10
31.71
Dividend Pay/Share
(%)
Dividend P Ratio (%)
Appendix 2: PEST Analysis
POLITICAL
SOSIO /
CULTURAL
MACROENVIRONMENT
INFLUENCES ON
INTERNATIONAL
MARKETING
ECONOMI
C
TECHNOLOGI
CAL
Bargaining Power of
INDUSTRY
COMPETITORS
Bargaining Power of
BUYERS
RIVALRY AMONG
EXISTING FIRMS
Page | 13
Threat of
Substitute
Products or Services
Appendix 4: SWOT Analysis
STRENGTHS
(Internal Positive)
OPPORTUNITIES
(External Positive)
THREATS
(External Negative)
1. Depends on Steves Jobs charisma, visions, 1. Strong competitors for Apples products
public communications, and negotiating skills.
with good reputations and extensive
2. The pricing is a bit high for the average
resources.
customers.
2. Pricing pressures as product mature and
competition increases
3. New entrants from backward, forward, and
cross-industry integration
4. Technology is constantly and rapidly
changes.
5. Economic situation that have been fluctuating
in the past years.
REFERENCES
EUCD (2004) Copyright Laws in Digital Europe Retrieved October 15, 2011 from
Page | 14
http://www.euro-copyrights.org/
Neumayr, T. (2008). Itunes Store Top Music Retailer in the US. Retrieved October 15, 2011
from http://www.apple.com/pr/library/2008/04/03itunes.html
Slideshare (2008) Apple Brand Experience Retrieved October 15, 2011 from
http://www.slideshare.net/korhan/apple-brand-experience-presentation
Thompson, A.A.Jr., Strickland, A.J. III, Gamble, J.E. (2008). Crafting and Executing
Strategy: The quest for competitive advantage. New York: McGraw-Hill Irwin.
Daily News (2003). Apple Strategy Questioned. Daily News, 8 July 2003
Quittner J. & Winters R. (2002). Apples New Core. Time (South Pacific), 14 January 2002
Technies.com (2002). Employer Analysis: Apple Computer Inc. Technices.com, 2002
BusinessWeek (2004e). Three steps to a Stronger Apple. BusinessWeek, 5 January 2004
Cheng L and Devgon A. (2003). Apple Case Competition iStrategy Associates. Michigan
Business School, 2003
BusinessWeek (2003). Get ready for an Innovative New Year . BusinessWeek, 29 December
2003
Case Study of Apple. Maintaining the Music Business while Introducing iPhone and Apple TV.
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