Strategic Management in an International Context: Apple Company (Research Paper Sample)

STRATEGIC MANAGEMENT IN AN INTERNATIONAL CONTEXT
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Strategic Management in an International Context
MNC: Apple
Question 1: Open Innovation and Internationalization
The demands on innovation have transformed dramatically in the past few years. A clear difference between open and closed innovations is based on the manner in which innovation is designed. Closed innovation is formulated in a self-contained business environment while open innovation integrates external knowhow into the innovation management. Closed innovation operates on the idea that a company develops its own innovation (Lasserre, 2018). The whole process of innovation, ranging from development to marketing, occurs entirely within the organization. In this regard, the skills, technology, and intellectual property all remain under the custody of the organization. The company heavily invests in research and development to form a knowledge center that gives rise to new innovations. On the other hand, open innovation advancing the process of innovation beyond the boundaries of the organization. In this case, innovation comes up through the integration of internal and external concepts, processes, and technologies with the objective of enabling the organization to produce new products and services. However, the idea of exchanging knowhow in the case of open innovation does not mean that there is free accessibility to the technology and skills of the company (In Honjo, 2017). It rather means a collaborative form of networking and involves the use of intellectual property and licenses.
A good example of companies that has widely embraced the use of open technology is Apple. Over the years, the MNC has been an icon of innovation and always strives to meet the desires of all its employees across the world in the smartest manner possible. The company is always renowned for concealing its partners and employees until the day it decides to launch (De Wit, 2017). The idea of using closed innovation results into a type of technology that is quite conductive with an Apple brand that has freethinking creativity. Apple is a unique company when it comes to innovation because its performances in this area are quite exceptional. The company always has innovative idea integrated in its corporate DNA such that it proves impossible for other companies to replicate it (Johnson et al., 2005). Apple as the habit of not showing off its products before they are officially launched and equally never makes any appearance at the trade shows. It will never let its employees or partners to discuss its products before they are announced. Apple often keeps its information or secrets to its chest, which makes it difficult to speculate its stream of innovations (De Wit, 2017). The company operates in a manner that it makes other companies continue speculating what it could be up to next in terms of introducing a new product, hence making it remain unique over the years. For this reason, it is clear that Apple uses closed form of innovation given that it concentrates on generating its own innovative ideas in an enclosed business environment. Closed innovation has always worked in favor of Apple because it produces unique products that attract a large section of high-end customers.
Based on the annual report of the company, it has many factor endowments that make it to have a competitive advantage over its competitors. With quarterly revenue of 62.9 billion dollars as at September 2018, Apple has a strong financial muscle that gives it a competitive advantage over its close competitors. It is among the most valuable companies across the world given that it sells its products to about 39 nations with more than 450 retail stores across the world. Its global expansion also acts as a factor endowment given that it becomes quite difficult for other companies to match its operations and products. The company has succeeded in leading in terms of using information technology hence designing a prestige brad that is only sold to high-end clients. In relation to “related and supporting industries”, the company produces products such as Mac and iPhone by working in close collaboration with its partners in terms of mobile strategy, app development, and corporate networking (Johnson et al., 2005). For example, the company has been working together with GE with the objective of increasing efficiency and at the same time optimizing workflows over a wide spectrum of industries such as manufacturing and transportation. The other partner is Salesforce, which has partnered with Apple to improve the level of engagement between customers and businesses by joining together CRM and an advanced mobile operating system. Such partnerships serve to give Apple a competitive advantage over its competitors because they give rise to new technologies that are beyond the innovative abilities of the competitors (De Wit, 2017). The “demand conditions” also determines the amount of products supplied by the company to a particular market at a particular time. Apple products are generally considered to be of high quality; and therefore, attracts a large portion of high-end customers. With this in mind, the company is forced to always strive to remain at the top of its performance by maintaining the production of new products and constant supply of the high-end products, such as iPhones.
The other factor is “strategy, structure, and rivalry”; Apple has always strived to new strategies in the market as well as change of structural components to counter the market rivalry in the ever changing technology industry (In KaratasМ§-OМ€zkan, et al., 2013). The company is considered very unique because it is always very difficult to product their next course of action as far as announcing a new product is concerned. It is never affected much by market rivalries because it has set a precedent that is not easy to match by most companies in the industry. The “government” is a component that directly affects the operations of Apple given that it operates in many countries in the world. In this regard, the company is under obligation to observe the rules and obligations governing business operation in every given country (In KaratasМ§-OМ€zkan, et al., 2013). To ensure that government authorities do not interfere with its operations, Apple has the obligation of observing all the regulations such as payment of taxes. It would be the only way to ensure it remains operational and competitive in an external environment (Lasserre, 2018). Lastly, “chance” is another factor that is instrumental in the operation of the company since it involves the opportunities that can be exploited by Apple to remain competitive and at the same time produce unique products that attracts a large section of the market.
The international business operations of Apple are quite complicated in comparison to its operations in the United States. The countries where the company conducts its businesses greatly vary in terms of economic advancements and future financial advancement trajectory. Countries have different political, economic, and legal formations (Hitt et al., 2013). For example, the economic circle in the United States is a robust market-based economy with an individualistic culture compared to China whose economic circle is still under growth, and operating under a collectivist culture. In addition, the United States operates under democracy while China is governed by communist totalitarian political ideologies (Hitt et al., 2013). To succeed in its operations in the international market environment, the company needs to embrace a wider use of Competitive Profile Matrix (CPM) because it serves to prove them with an edge over its close competitors. Based on diamond model component, Apple has a competitive advantage over other companies in the areas that they operate in because it enjoys economies of scale and also has big outlets across the world.
Question 2: Internationalization, Localization and Competitiveness
In assessing the two market factors: ‘demand for internationalization’ and the ‘demand for localization’, I would recommend the use of the former in the case of Apple, because, it has more benefits as compared to the latter. Given that Apple is one of the best performing companies across the globe in the technology industry, its profitability forms the key component of its operations (Hitt et al., 2013). In this regard, embracing the use of “demand for internationalization” will ensure it achieves this objective better than the use of “demand for localization”. First, localization involves the adaptation of a product to make it meet the language and culture of a particular market segment. It simple terms, it means customization of a product to meet the requirements of a particular group of customers (De Wit, 2017). On the other hand, internalization involves designing a product that enhances easy localization of the target audience, which may differ in culture and language. In this case the product can be designed and modified in a manner that eliminates the factors that hinder the deployment of localization or internationalization. It involves offering support for identities that may not be utilized in the event that localization takes place. It can also entail separation of localizable elements like localized alternatives from source code depending on the preferences of international users (De Wit, 2017). It is important to note that the items do not necessarily encompass the product localization into another language or culture but rather design operations that enable easy migration in the future (Lasserre, 2018). The components co...