Apple's Business Environment: Factors, Challenges, and Strategies

This presentation provides an in-depth analysis of Apple's international business environment, examining the key factors influencing its global operations. It begins by highlighting Apple's corporate objectives, focusing on product quality, innovation, and shareholder value. The presentation assesses Apple's sales growth, market position, and the impact of pricing strategies. Challenges such as competition from Android, tax scandals, and reliance on China's labor market are discussed. Opportunities for growth, including iCloud services and expansion into emerging markets, are also explored. Furthermore, the presentation covers legal and environmental concerns, including intellectual property rights, potential litigation, and the environmental impact of manufacturing. Apple's global strategies, such as product differentiation, technology focus, and educational sales, are examined, along with its use of joint ventures and alliances. The presentation concludes by comparing Apple's performance with its competitors and emphasizing its commitment to quality and innovation.

Running head: INTERNATIONAL BUSINESS ENVIRONMENT
International Business Environment
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1INTERNATIONAL BUSINESS ENVIRONMENT
Slide 2
Apple for long has been regarded as the world’s most prominent and identifiable brand in the
segment of electronic devices, mainly for its innovation and distinctiveness. This corporation
of multinational stature has been able to create a niche for itself, bringing in a revolution in
the segment of personal computing.
Slide 3
The main corporate objective of Apple has always been to sell top quality products to the
customers through its innovative designs and creativity. The company has always focused on
returning the favor of its shareholders through profit gain, wherein they are confident of
investing more.
Apple’s growth has been phenomenal in 2017. Every product of Apple has featured in its
revenue growth. The fastest growing part of Apple has been its smallest products like Apple
Watch, iPod along with accessories.
Slide 4
Apple has been regarded as one of the establishments of initiating the most inventive
products in the industry of electronics. In recent years it has become one of the biggest online
retailers for music and video streaming along with software solutions.
Apple has observed a strong growth in its sales in the year 2016 and 2017 and has been able
to manage its cash flow wisely. The company managed in achieving a revenue growth of
around 40 percent in 2017 as expected in 2016 (Khan, Alam and Alam 2015).

2INTERNATIONAL BUSINESS ENVIRONMENT
Apple has always believed in catering the right sort of information to the customers as the
things they require exactly. The company brings in simplicity in the marketing of its
products.
Slide 5
Many have been criticizing the brand for the high price it charges for its products, however
fans of Apple have been justifying the situation by cataloging the brand as a “premium”
gadget manufacturer. However the issue lies in the fact that competitors have been belting out
products with same features at lesser price.
Consumers who are generally accustomed with OS systems of other nature do not get handy
understanding when they start using OS X and iOS.
Apple’s market shares have declined two months in a row in Japan, US, Italy and Germany in
2015-2016 (Grant 2016). For this the company exercised lesser power in influencing the
buying pattern of customers for iPhones.
Slide 6
Surveys and studies have showed that there exists high demand for new products of Apple,
mainly for products like Power Mac and PowerBook. The demand for the newly launched
Apple Watch has exceeded the accessible supply.
As per Apple, the company is not that much interest in selling phones of low-cost budget.
The aim has always been to offer high-end products. There lies huge difference in price from
the competitors it has in the market, but Apple still enjoys augmenting demands in the market
within the smartphone industry.

3INTERNATIONAL BUSINESS ENVIRONMENT
The innovation of iCloud services hopefully will be bringing in more revenues to the
organization. Apple has the opportunity of involving more consumers to the services of
iCloud (Smith, Rupp and Offodile 2017).
Slide 7
A serious threat to Apple is the fact that consumers can change to the operating system of
android over the system of iOS.
The electronic environment communication structure is innovating on regular basis and the
company needs to keep pace with its competitors. The competition is fierce within this
marketplace for which Apple on regular basis constantly modifies and design its products for
matching the consumers’ needs.
Apple got involved in a tax scandal when it managed in keeping $44 billion of its revenues
from going to the taxmen’s house (Grant 2016). The company generally has no perspectives
of tax.
Slide 8
Apple is highly dependent on china’s low labor cost. China’s unsettled environment related to
political matters often disrupts the manufacturing process of Apple. Political bonding of US
with their Chinese counterparts has affected the company immensely.
Apple CEO Tim Cook has been threatened from entering into Russia by a lawmaker for his
public acknowledgement of his homosexuality fact.
UK boasts of a steady government, though there remains risk of terrorist attacks that can
leave the country with a negative impact. Current political challenges faced by Apple within

4INTERNATIONAL BUSINESS ENVIRONMENT
UK are sagging popularity of government and ruling coalition of the same (Thour, Doraisamy
and Appanan 2014).
An alteration within the European economy has been affecting Apple that has resulted in the
revenue being decreased by 16 percent.
China for long has been known as the nucleus of manufacturing factories for Apple, but
recently the labor cost in the country has gone up. The increase in the labor cost is having a
direct impact on the cost of the products manufactured by Apple in China.
Due to the US dollar’s rising value, there has been an increase in the exchange rate. The
increase in the rates of exchange directly affects the cost related to Apple products. The
existing difference between US dollar and currencies of other countries like Yuan and Euro
makes Apple’s business more expensive in major markets of China and Europe (Cardoso
2017).
Slide 9
Apple has been farming out its operations of manufacturing in China, though the company
has the ability in creating many job opportunities in its home country in US, though it ahs
chosen China for factor related to low cost labor. This might limit the appeal of the product to
some extent.
For satisfying the needs of the customers, Apple has been making certain acquisitions like
Topsy and Embark Prime Sense and alliance with companies like Philips, Motorola and
Sony.
Apple ahs observed a rise in the spending of consumers in the coming decades in countries
representing the third world like Africa where people are not that much aware of Apple

5INTERNATIONAL BUSINESS ENVIRONMENT
products (Cardoso 2017). The company has the ability in penetrating to such markets that are
still unexplored.
The stakes of information technology remains higher as compared to the certain other
industries when it comes to earning of the revenues.
In the year 2015, Apple spent nearly $8.07 billion for the R&D that generally accounted for
approximately 3 percent of the net sales of the company. The research is being conducted for
assessing the mind-set of the consumers.
Apple is better known for coming up with stunning designs of concept. It has been able to
generate some of the most finest and striking product designs which its contemporaries
cannot go with.
The direct competitors of Apple, Google and Samsung have been offering products along
with services that were once the signature products of Apple. Its competitors have showed
striking ability in replicating its products that threatens brand of Apple on whole.
Slide 10
Apple manufactures variety of brands that are been covered by laws related to intellectual
property like software along with music. Apple’s manufacturing of software generates big
income that makes the company susceptible to lawsuit and piracy (Castro 2016).
In US, Apple is going through a phase of legal stress with the company restoring some of its
parts used within iPhone which was earlier banned by the government of US.
In recent times, Apple has made an entry to the financial market that s highly regulated. The
company could encounter increased litigation in providing the financial services.

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The facilities of manufacturing within China have been a growing apprehension for the
company for reasons of pollution along with other environmental side effects. For
minimizing the environmental issues the company would require to shell out more money
leading to huge amount of expenses for the company in future (Smith, Rupp and Offodile
2017).
For an increase in the global warming rate, Apple could face issues of trans-oceanic shipping
which is the main part of supply chain of Apple.
Slide 11
Apple believes in selling the same sort of products under the brand name that is generally the
same everywhere around the world. It makes use of the similar sort of distributional channels
in all the countries in which it operates.
Apple generally makes use of joint ventures and alliances in international market to share the
risk with the partner of the venture and this has been playing a significant role in the
company beating its rivals with this entry mode. It is a win-win situation for both the parties.
Joint ventures help in building the credibility of Apple.
Slide 12
After comparing Apple in the international business environments it can be seen that Apple is
leading the industry or at least in the second position in terms of market capital, employees,
revenue, gross margin and net income. Its competitors Google, HP and Blackberry have not
been able to take the lead in competition. There is a huge difference between the quantitative
data among these competitors.

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Slide 13
Apple mainly focuses on product differentiation and technology. Its international business is
committed towards bringing superior quality mobile communication and experience related
to video to its global consumers.
Apple brand is stated to be one of the biggest and strongest in global market. In international
markets its brand personality is being created through emphasis on emotion, touching
people’s lifestyle and aspiration along with innovation.
Another global strategy of Apple has been its educational sale where it sells its products and
services to universities and schools, helping in spreading its technology.
Apple has been benefitted from the process of globalization on a wide range. They can set up
heir production centre on one part of the world and distribute the products all over the world.