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Apple Global Strategy

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Apple Global Strategy

Simplicity is the ultimate sophistication. It takes a lot of hard work to make something simple, to truly understand the underlying challenges and come up with elegant solutions. It's not just minimalism or the absence of clutter. It involves digging through the depth of complexity. To be truly simple, you have to go really deep. You have to deeply understand the essence of a product in order to be able to get rid of the parts that are not essential. "

- Steve Jobs

Differentiation is used by Apple to create offerings tailored to a specific markets overseas, and to stand out from the competition internationally. Through this strategy, the company has been able to establish a strong presence around the world.

Differentiation is the idea of making your company's product stand out from other similar products through marketing.

We will explore how the company's slogan "making technology so simple that everyone can be part of the future" set the stage for the next generation of consumer technology. Steve Jobs, the co-founder of Apple, insisted that they take a "consumer-first mentality", as they make advancements in technology more accessible for consumers.

The Apple brand has done a great job in taking the concept of simplicity and stretching it across its entire story. They have also used it to guide their approach to the buying experience. They go out of their way to help consumers get the best experience possible.

By narrowing the potential benefits of the Apple brand to three key functional benefit zones: life, sensory appeal, and the experience, Apple aims to make technology more accessible and help people feel more connected.

Apple's global expansion timeline

1976 - Steve Jobs, Steve Wozniak, and Ronald Wayne founded Apple Computer, Inc., to develop and sell the Apple I personal computer. However, the company suffered from various problems, including its high cost and limited application library.

1980 - Cork is Apple's first location for Europe, the Middle East and Africa headquarters. The facility opened in 1980, and it is the company's first outside of the US. Its sales and distribution operations are also handled at the same office in the same region.

1984 - Apple launched the Mac, the very first personal computer to come without a programming language. The announcement was made through a television advertisement that debuted during the Super Bowl.

1993 - Apple's world headquarters is in Silicon Valley. The company's campus has six buildings with a total area of 850,000 square feet.

1997 - Steve Jobs launched the company's online store. The stores were incredibly successful, and within three years, Apple had reached annual sales of over US $ 1 billion. Over the years, Apple has expanded its geographical reach and opened more stores globally. The company's robust product sales have helped it become one of the top-tier retailers globally.

2001 - Apple launched its first retail stores in California and Virginia. In October, the company debuted the iPod, which was a phenomenally successful product and has sold over 100 million units.

2014 - The original Apple Watch was first introduced in 2014. It was followed by a wearable device with health and fitness tracking features in 2015.

2015 - Apple opened its third headquarters in Israel, which is in Herzliya. The facility has a total of around 800 employees.

2017 - Apple introduced the HomePod, a smart speaker that competed against the Amazon Echo and other similar devices. In 2018, the company acquired Shazam, a company that specialises in music, TV, and advertising recognition. The acquisition was reportedly worth $ 400 million.

2018 - Apple was the world's largest publicly traded corporation. On August 2, 2018, it became the first US company to reach a $ 1 trillion market value.

2020 - Apple is the world's biggest publicly traded technology company by revenue and since January 2021, has been regarded as the most valuable company in the world. It is part of the Big Five American companies, alongside Amazon, Google, and Microsoft.

Apple's global branding strategy

Apple is one of the world's most recognisable companies. Its success is largely attributed to the company's core values:

  • Accessibility

  • Educational support

  • Carbon-neutral

  • Inclusive work environment

  • Privacy

  • Equity and justice

  • Supplier responsibility

These values dictate how the company operates in both home and overseas markets and contribute to the development of its global branding strategy.

One of Apple's values is to become carbon-neutral. To achieve this, the company set a goal to only use clean energy by 2030. This does not only apply to the company's headquarters but also to its operations worldwide.

To ensure all its core values apply well across regions and languages, Apple adopts a standardisation strategy.

Standardisation strategy is a strategy used by businesses to create a consistent brand experience across the globe.

With standardised global branding, Apple treats the whole world as one market and provides the same kind of products and services to everyone. This strategy allows them to get the most out of their technology and can meet the varying needs of people in different countries. Another benefit of standardisation is cost reduction. For example, by making the product the same everywhere around the world, Apple is able to reduce its marketing expenses as customers all over the world know what to expect.

There are three important values in Apple's global branding strategy:

  1. The company's values are rooted in its belief that people should be able to rely on technology to solve their problems.

  2. The company has a unique visual style and vocabulary, which is reflected in its product design and advertising.

  3. The company's goal is to create a connection with its customers that is deep and meaningful. This can be done through the creation of trust and the introduction of new products.

Apple's global marketing strategy

Through Steve Jobs' vision and the company's technological breakthroughs, Apple has been able to expand and market itself globally. Nowadays, Apple devices can be found all over the world.

The company's global marketing strategy is based on four pillars:

  • Wide acceptance of the products introduced by Apple globally reflects the company's major international strategy ie, iPod, iPad, iPhone, iTunes etc.

  • Brand value is gained by being able to establish a strong presence in the overseas market.

  • The competitive advantage that Apple Inc enjoys through its differentiation strategy allows it to take on the challenges posed by its rival firms in the overseas market.

  • Low imitation, as through its differentiated strategy, Apple Inc has been able to create products that are not only superior to those of its competitors but that also require the company's employees to develop innovative ideas.

To understand this better, let's take a look at Apple's marketing and market penetration strategy in China:

China is a lucrative market for many multinational companies. However, it is not easy to penetrate the Chinese market due to the high level of competition.

Despite initial setbacks, Apple's marketing strategy proved successful. Its success has been driven by a mix of pricing strategies, a deep understanding of local customers, and a focus on middle-class consumers.

As for market penetration, Apple distributes its products via both direct and indirect channels:

  • Direct distribution channels include Apple's own retail stores, set up in various locations to display the company's products and provide customer support.
  • Indirect distribution channels include intermediary organisations, suppliers, retailers.

A large number of Apple suppliers are also located in China. Out of 809 Apple production facilities worldwide, China accounted for 380, or more than one third. Goertek and Luxshare are the two biggest China-based Apple suppliers.

Apple also formed joint ventures in China to make its products and services more accessible to customers. For example, in 2017, the company opened a new centre to support iCloud users there. Apple also entered a partnership with Luxshare to produce Airpods.

To learn more about the different modes of market entry, check out our explanation on Market Penetration.

Besides China, Apple is also a part of many emerging markets such as India, South America, and the Middle East.

Apple's global expansion can also be put down to its years of experience and innovative marketing strategies.

Through extensive marketing, Apple was able to successfully penetrate the Indian market by targeting two companies, Vodafone and Bharti Airtel.

Due to the immense popularity of the iPhone in India, Apple decided to lower the prices to gain more traction in the country. This was also beneficial for them as they were able to create a first class retail experience in various cities.

Apple's Global Tax Strategy

To significantly reduce their worldwide tax liability, Apple has set up a financial operation (a subsidiary company) called Apple Sales International (ASI) which is registered within the Republic of Ireland (ROI) to benefit from a low corporate tax rate (12.5%).

Having registered ASI within the ROI, Apple has taken further advantage of the tax legislation within the ROI by negotiating a tax rate with the government. Since the tax position of ASI within the ROI is not strictly clear, as Apple operates in multiple countries, Apple has used this situation to negotiate a corporate tax rate of just 1.8%.

This has clear advantages for Apple. But there is also an advantage to the government of ROI. This is because ASI is simply a company registration, and it would cost Apple very little to move ASI to a different country. If that were to happen, then the government of ROI would lose the tax income that they receive from Apple.

Conclusion

The company's goal was to expand its market share globally by developing a strategy that would allow it to gain access to various international markets. For its global operations, Apple focused on three key business drivers: creativity, innovation, and added value. The company's goal is to gain a competitive advantage over its main competitors. Through innovation, Apple can provide consumers with unique products that are aligned with their changing needs.

Apple Global Strategy - Key takeaways

  • Differentiation strategy is used by Apple to create differentiated offerings in the overseas market.

  • The brand is known for its unique, innovative products, imagination, emotion and experience.

  • A standardisation strategy is a process that Apple uses to reduce its expenses and improve its efficiency.

  • The company's strategy focuses on creating a differentiated product line that provides high-quality mobile communication.

  • Apple distributes its products through both direct and indirect distribution channels.

  • The company's global marketing strategy is based on four pillars: wide acceptance, brand value, low imitation and competitive advantage.


Sources:

Kenyie Shofner, Thinking Differently: Why Apple's Brand Succeeds Worldwide, United Language Group, n.d.

Apple Globalization & Global Strategic Planning, Assignment Help Experts, n.d.

Graham Robertson, Apple case study: How Apple builds everything around simplicity, Beloved Brands, n.d.

Apple Inc., Popular Timelines.

Apple Mission Statement, Vision, & Core Values, Business Strategy Hub, 2021.

Apple’s Growth in Chinese Market, Grin, 2012.

Frequently Asked Questions about Apple Global Strategy

Apple uses a standardisation strategy to create a consistent brand experience across the globe. This ensures that all its core values apply well across regions and languages.

Yes, Apple uses a global standardisation strategy for its branding. With standardised global branding, Apple treats the whole world as one market and provides the same kind of products and services to everyone. This strategy allows them to get the most out of their technology and can meet the varying needs of people in different countries.

Apple's competitive advantages include differentiation and simplicity. Differentiation is used by Apple to create offerings tailored to specific markets overseas and to stand out from the competition internationally. Additionally, the Apple brand has done a great job in taking the concept of simplicity and stretching it across its entire story. 

Differentiation is used by Apple to create offerings tailored to specific markets overseas and to stand out from the competition internationally. Through this strategy, the company has been able to establish a strong presence around the world. 

Apple outsources parts of their production to decrease its costs. The company also benefits from certain tax advantages as Apple has set up a subsidiary company abroad.

Final Apple Global Strategy Quiz

Question

What is Apple's global strategy? 

Show answer

Answer

Major International Strategy: Apple Inc.'s differentiation strategy is focused on innovative products, services that help deliver high customer value. developing strong brand recognition and increasing the company's market share in overseas markets. 

Show question

Question

Does Apple use a global standardization strategy? 

Show answer

Answer

Apple uses standardization strategy which refers to a company's approach to treat the whole world as one market. For instance, Apple uses standardization strategy as it does not want to modify the look and feel of its products for local users. 

 

Show question

Question

What is the competitive advantage of Apple How has it contributed to success of Apple? 


Show answer

Answer

A key competitive advantage of Apple is its ability to create products that share the same software and hardware. This enables it to stay ahead of its competitors and minimize the risk of delays and costs. 

 

Show question

Question

How does Apple use differentiation strategy? 


Show answer

Answer

Apple's products are differentiated by their price, which indicates that they're better quality and have the latest technology. This also stimulates consumer interest. 

Show question

Question

What strategies has Apple implemented to keep its costs down relative to its competition? 


Show answer

Answer

The company's ability to create demand through its product differentiation, brand royalty, hype around the launch of new product and innovative advertising has given it the power to set prices higher than other companies. 

Show question

Question

What is brand values? 


Show answer

Answer

Brand value is gained by being able to establish a strong presence in the overseas market. 

Show question

Question

What is low imitation? 


Show answer

Answer

Low imitation is through its differentiated strategy, Apple Inc has been able to create products that are not only superior to those of its competitors but also require the company's employees to develop innovative ideas. 

Show question

Question

True or False? 

The Apple brand has done a great job in taking the concept of simplicity and stretching it across their entire story. They also have used it to guide their approach to making sure that their consumers have a great buying experience. 

Show answer

Answer

True

Show question

Question

True or False? 

The brand is known for its unique, innovative products, imagination, emotion and experience. 

Show answer

Answer

True 

Show question

Question

True or False? 

A standardization strategy is a process that Apple uses to increase its expenses and improve its efficiency. 

Show answer

Answer

False

Show question

Question

True or False? 

The company's goal is to create a disconnection with its customers. 

Show answer

Answer

False

Show question

Question

What year was Apple founded? 


Show answer

Answer

1976

Show question

Question

What 3 people founded Apple? 


Show answer

Answer

Steve Jobs, Steve Wozniak, and Ronald Wayne 

Show question

Question

Where was Apple's first location for Europe, middle East and Africa headquarters? 


Show answer

Answer

Cork (south Ireland) 

Show question

Question

What Year Did Steve Job Resigned? 


Show answer

Answer

2011 

Show question

Question

True or False? 

To significantly reduce their worldwide tax liability, Apple have set up a financial operation (a subsidiary company) called Apple sales international (ASI) which is registered within the Republic of Ireland (ROI). 

Show answer

Answer

True

Show question

Question

What is differentiation?

Show answer

Answer

Differentiation is the idea of making your company's product stand out from other similar products through marketing. 

Show question

Question

What is standardization?

Show answer

Answer

Standardization strategy is a strategy used by businesses to create a consistent brand experience across the globe. 

Show question

Question

Name Apple's four global marketing pillars.

Show answer

Answer

The company's global marketing strategy is based on the four pillars: wide acceptance, brand value, low imitation and competitive advantage.

Show question

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