Analyzing Apple Inc.'s Global Strategy Using Porter's Diamond Model

This report examines Apple Inc.'s global strategy and competitive advantages in the international market, using Porter's Diamond Model as a framework. The report begins by introducing the model and its key determinants: factor conditions, demand conditions, related and supporting industries, and firm strategy, structure, and rivalry. It analyzes how Apple leverages these factors, particularly highlighting the role of skilled labor, technological advancement, and strong domestic demand in the U.S. market. The report also discusses the importance of related industries like Silicon Valley and the impact of competitive pressures from companies such as Samsung and Huawei. Furthermore, it considers the influence of chance events and the role of government in supporting the company's success. The analysis concludes that Apple's competitive advantage is derived from its access to resources and favorable demand patterns in the United States, enabling it to compete effectively in the global market through innovation and product differentiation.

Running head: EVALUATING THE GLOBAL CONTEXT
EVALUATING THE GLOBAL CONTEXT
Student’s Name
University Name
Author note

1EVALUATING THE GLOBAL CONTEXT
Introduction
It is believed that the competitive advantage of a particular country or nation is
determined by four main determinants including the strategy and the rivalry of the company,
the supporting industries, demand and supply conditions and factor conditions. As indicated
by Porter (1990), ‘chance’ and ‘government’ are two such factors which supports and
complements the competitiveness of the nation. It has been further argued that the two
mentioned factors create consideration and durable competitive advantages. Apple Inc has
attained much success by hitting a market capital of $1 trillion. It is the first US Company to
attain $ 1 trillion market capital. Currently the company has been operating in host of
countries including India, Singapore, UK, France and china among other countries. The
business organization mainly focuses on labour based on which it creates a competitive
advantage. The company is headquartered in US and carries out its business operations in the
international market. The purpose of this essay is to analyze the contribution of Porter’s
Diamond model framework to the success of Apple Inc in the international marketing and its
ability to gain competitive advantage. The Porters Framework helps to analyze the
competitive advantage of Apple Inc considering specific factors.
Discussion
It has been researched and analyzed that the business organization considers mass
production at a considerably lower cost as compared to the production cost in United States.
Various factors consider and determine the overall success of the business organization in the
foreign market. The company has ventured technology related business along with the
production of PC (personal computers and software). According to Autry and Huang (2014),
the company has successfully diversified its product and service portfolio entering into online

2EVALUATING THE GLOBAL CONTEXT
services for its target audience and target consumers. However, as mentioned by Dunning
(2013), Apple Inc faces stiff competition in the international markets from international
companies such as Huawei, Samsung and Google. The usual superiority of the products and
services of Apple Inc, the product pricing strategies and the market appeal of the business are
of the competitive advantage of the business organization. According to Fainshmidt, Smith
and Judge (2016), the strategies implemented by the business organization plays in important
role in the market performance of the business organization. Henceforth, it can be said that
the overall business and marketing strategies of the business organization directly appeal the
US market as well as the international market. The primary strategy of the business
organization is differentiation. The tastes and preferences of the consumers in the market
revolve around certain product standards and attributes. Therefore, the business organization
believes that differentiation is the essence for creating a market appeal. The unique quality
and designing of the product have gained the business certain competitive advantage in the
international market.
Porter’s Diamond Model

3EVALUATING THE GLOBAL CONTEXT
Figure 1: Porter’s Diamond Model
Source: Jhamb (2016)
As per the arguments of Porter (1990), a particular nation cannot be competitive in
every industry, however, the correct mix of determinants and factors will enable the
particular industry to gain competitive advantage in the global international market. The
determinants and factors of Porter’s Diamond Model are: Firm’s strategy and rivalry,
supporting industries, demand conditions and factor conditions. The two factors chance and
government are complementary and supportive to the national competitiveness of the country
as per Porter (1990)..
Sources of competitive advantage
Factor conditions – It is believed by Khan, Alam and Alam (2015) , that the competitiveness
of the home cluster is determines by various factors of production within the cluster. These

4EVALUATING THE GLOBAL CONTEXT
factors can be grouped into categories namely human resource, physical resources, Capital
resources, and infrastructure and knowledge resource. These are some of the most important
inputs to compete in the industry. The presence of these factors ensures smooth functions and
operations of the cluster.
As per research and analysis, it has been identified that US is endowed with all the
resources including abundant availability of skilled human resources, physical resources,
knowledge, capital and natural resources. As stated by Kim (2018), most importantly, US are
technologically advanced which provides a competitive edge to Apple Inc. The population of
the USA is around 330 million among which majority of them are young generation with
higher education which ensures abundant availability of skilled labour in the national market.
It is one of the most developed countries in the World, which provides reputation and brand
image to Apple Inc. US have robust infrastructure along with transportation facilities. As per
the opinion of Konsolas (2017), the presence of these resources in US indicates smooth
functioning and operations for the business organization. This provides a competitive
advantage for the business in the international market as well. According to Kunle et al.
(2017), the transportation facilitates, advancement of technology, abundant availability of
skilled labour in the business organization provides a competitive advantage to the business
organization. These situations and availability improves the competitiveness of the cluster.
Demand conditions – It is one of the most important characteristics as described by Porter
(1990). The demand conditions mainly include the demand situation of the name, pattern of
its growth, internationalization of domestic demand. According to Mutua (2019), the
domestic demand has been emphasized by Porter, as the companies are more aware of the
demand patters in the domestic market as compared to the foreign market. The increase in
demand for the products and services offered by the business organization directly impacts

5EVALUATING THE GLOBAL CONTEXT
the overall performance of the business organization. According to Nithisathian et al. (2018),
increase in demand of the consumers motivates the organization to further invest in new
technologies and improve the performance of the products and services. As explained by
Porter, the demand pattern and quality of the locals is of prime importance to the company
more than its size. The compatibility of domestic demand and its sophistication of the local
customers determine the competitiveness of the nation’s industry as stated by Kunle et al.
(2017).
According to Mutua (2019), the demand of technology and gadgets are increasing at a
rapid rate which is favourable for Apple Inc. The sales for Apple’s products and services are
increasing at a constant rate. Consumer prefers convenience with advanced technology. The
target consumers of the business organization seek for stylish and unique products and
services which are offered by the company. As per the opinion of Nithisathian et al. (2018),
the demand for new software applications and new gadgets is huge in US especially among
the young generation. As per surveys conducted, there are around 60% of the population in
US having active interaction on social media. There is a strong domestic demand for Apple
products and services. This provides an impetus to the firms to continuously innovate and
improve the performance of the profits and services in the international markets. Moreover,
in the opinion of Smit (2015), this enables the business organization to improve the quality
and offer the products at lower price in the international market thereby gaining competitive
advantage. This enables the business organization to gain competitive advantage in the
international advantage. The competitive advantage is derived from primary access to
domestic availability of resources and favourable demand patterns in US.
Related and supporting industries – The presence and availability of related and supporting
industries is the third determinant of Porters’ model. It has been argued by Stone and

6EVALUATING THE GLOBAL CONTEXT
Ranchhod (2006), that presence of suppliers in the nation boost the process of upgrading the
business operations and the process of its innovation. Hence, according to Tsiligiris (2018),
the presence of related industries in the domestic nation provides better opportunity and
chance to the businesses to identify new opportunities and share information. In order words,
the presence of parallel industries in the nation is considered to be one of the most important
factors for the success of the industry as it provides additional support to the process and
supply chain of the business (Stone and Ranchhod 2006). The multiple client industries
protect the producers from variances and fluctuations of demand in an industry.
As mentioned by Tsiligiris (2018), in today’s generation, the entire globe is dependent
and interconnected with each other. Hence the industries are dependent and the supports of
other industries are essential for the success of the industries. One of the most supporting and
apparent industry in US is the Silicon Valley. Silicon Valley is a home not only to Apple Inc
but also many others operating IT firms including Google and Microsoft. US consist of
highly skilled business organization focused on development of new products and innovation.
Apple Inc is gains support hugely from the US telecommunication giants including AT & T
and Verizon.
Strategy, structure and Rivalry – This determinant involves the ways in which the firms are
organized and managed. As explained by Porter (1990), the managerial approach of the
business organization is considered an essential factor for industrial developments. Further,
explained by Porter, the presence of competitors in the cluster is beneficial for the industry,
as it fosters continuous improvements and innovation. Before the formulation of strategies,
the business organizations consider the actions of the competition organizations. This enables
the business organization to undertake the best strategy in order to compete with the
competitions in the market. According to Zhao (2018), the domestic environment influences

7EVALUATING THE GLOBAL CONTEXT
the operations and managerial activities of the existing firms in the domestic market. The
cultural aspects of domestic environment and the legal regimes impact this particular
determinant. According to Autry and Huang (2014), this increases the opportunities for the
business organizations to develop competitive advantage and identify its success level in the
nation. The structure of the business organization implies the ownership structure of the
business.
As per the opinion of Khan, Alam and Alam (2015), the corporate giant Apple Inc.
believes in one particular strategy that is innovation. Apple Inc competes with the other
operating businesses in the same industry through product improvements and innovation. The
presence of still competitive in the market such as Microsoft and Google has enabled the
business organization to improve the quality of the product and service offerings through
continuous innovation and product improvement. This aspect has enabled Apple Inc to
compete against other operating firms in the international market and attain its competitive
advantage of product uniqueness and product image. As mentioned by Zhao (2018), it is
essential for the business organization to build strong ownership rules and managerial
regulations in order to attain sustainable growth. US have strict laws and regulatory
framework which enables the organizations to undertake the benefits of Silicon Valley and
expand their business operations in the international market. Apple Inc has been able to
establish itself well in the domestic market after which it considered expanding its business
operations in the global market as stated by Nithisathian et al. (2018).
There are two main factors that have been included in the porter’s diamond model that
includes ‘role of chance events’ and ‘role of government’ (Porter 1990).

8EVALUATING THE GLOBAL CONTEXT
Chance – These implies the certain events that are not in control of the business
organizations. These are considered as chance events by Porter (1990). Further, these are
considered as the forces which enable the industries to reshape and restructure enabling the
firms operating in the domestic market to gain competitive advantage. However, as stated by
Tsiligiris (2018), there are certain external factors including natural disasters which can affect
cluster. These are be young the control of the government of industries.
Role of the government – The presence of responsive and effective public sector support
efficient cluster building. According to Zhao (2018), it is the role of the government to
develop sustainable array of internationally competitive industry clusters. Governmental
policies bring in new clusters to reduce hurdles in growth. However, the US government has
been criticized considering the contributions in the development of Silicon Valley.
Conclusion
Therefore, from the above research and analysis, it can be concluded the favourable
factors and determinants as suggested by Porter's Diamond model, helps Apple Inc to gain
competitive advantage in the international market. The essay has analyzed in detail the
determinants and factors including Firm’s strategy and rivalry, supporting industries, demand
conditions and factor conditions which enables the firm to gain competitive advantage in the
global market. With the application of Porter’s cluster theory, the essay has description the
origin of the business organizations competitive advantage.

9EVALUATING THE GLOBAL CONTEXT
References
Autry, G. and Huang, L., 2014. An analysis of the competitive advantage of the United States
of America in commercial human orbital spaceflight markets. New Space, 2(2), pp.83-110.
Dunning, J.H.,2013. Internationalizing Porter's diamond. MIR: Management International
Review, pp.7-15.
Fainshmidt, S., Smith, A. and Judge, W.Q., 2016. National competitiveness and Porter's
diamond model: The role of MNE penetration and governance quality. Global Strategy
Journal, 6(2), pp.81-104.
Jhamb, P., 2016. An Application of Porter's Diamond Framework: A Case of Sports Goods
Cluster at Jalandhar. Pacific Business Review International, 8(8), pp.141-146.
Khan, U.A., Alam, M.N. and Alam, S., 2015. A critical analysis of internal and external
environment of Apple Inc. International Journal of Economics, Commerce and
Management, 3(6), pp.955-961.
Kim, P., 2018. Integration of Management and Culture: The Culture of Dedication in
Samsung Electronics and Apple Inc (Doctoral dissertation, 서서서서서 서서서).
Konsolas, I., 2017. The competitive advantage of Greece: an application of Porter's
diamond. Routledge.
Kunle, A.L.P., Akanbi, A.M. and Ismail, T.A., 2017. The influence of marketing intelligence
on business competitive advantage (A study of diamond bank Plc). Journal of
Competitiveness, 9(1).

10EVALUATING THE GLOBAL CONTEXT
Laszlo, C. and Zhexembayeva, N., 2017. Embedded sustainability: The next big competitive
advantage. Routledge.
Mutua, C., 2019. Article critique competitive advantage: A critique of 3 journal
articles. International Journal of Advanced Research in Management and Social
Sciences, 8(5), pp.23-32.
Nithisathian, K., Wall, W.P., Thanitnan, C. and Ponwiritthon, R., 2018. Maintaining
Indispensable Competitive Advantage: Corporate Strategy for 21st Century. RMUTL Journal
of Business Administration and Liberal Arts, 6(1), pp.11-24.
Porter, M.E., 1990. The competitive advantage of nations. Harvard business review, 68(2),
pp.73-93.
Smit, A.J., 2015. The competitive advantage of nations: is Porter’s Diamond Framework a
new theory that explains the international competitiveness of countries?. Southern African
Business Review, 14(1).
Stone, H.B. and Ranchhod, A., 2006. Competitive advantage of a nation in the global arena: a
quantitative advancement to Porter's diamond applied to the UK, USA and BRIC
nations. Strategic Change, 15(6), pp.283-284.
Tsiligiris, V., 2018. An adapted Porter Diamond Model for the evaluation of transnational
education host countries. International Journal of Educational Management.
Zhao, L., 2018, August. Determinants of Food Industry Competitiveness from the
Perspectives of Porter's Diamond Model. In 3rd International Conference on Judicial,
Administrative and Humanitarian Problems of State Structures and Economic Subjects
(JAHP 2018). Atlantis Press.

11EVALUATING THE GLOBAL CONTEXT