Evaluating the Global Context: Apple's Competitive Advantage in the UK

This essay critically assesses the comparative advantage of Apple Inc. within the UK economy, employing Porter's Diamond Model as a theoretical framework. It examines the UK's technology sector, its competitive strengths, and the influence of socio-economic factors. The analysis considers various aspects of the model, including factor conditions, demand conditions, related and supporting industries, firm strategy, structure, and rivalry, along with the impact of government and chance. The essay highlights the UK's attractiveness for foreign investment, particularly for tech companies like Apple. It explores how factors such as skilled labor, innovation, and market size contribute to Apple's success, while also considering the challenges posed by Brexit and other external factors. The conclusion emphasizes the strategic value of Porter's Diamond Model in understanding the dynamics of the UK's technology sector and the competitive positioning of global companies like Apple.

Running head: EVALUATING THE GLOBAL CONTEXT
Evaluating the Global Context
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Introduction
The study is developed with the aim of discussing the dynamic impacts of the
comparative advantage theory. The term comparative advantage is associated with the low
opportunity cost and better-quality products and services. It reflects the efficient of a particular
economy. Relating to this fact, the paper has introduced the Porter’s Diamond Model to critically
assess the comparative advantageous position of the UK economy and Apple Inc., the largest
tech company across the world. As far as the UK economy is concerned, it owns the third largest
technology sector just after the USA and China. Meanwhile, Apple Inc. has been reported to hold
a market value of around 962 billion in 2019. The company has gained the top position
irrespective of different categories of sectors. This brief discussion has enlightened how the
socio-economic parameters influence the comparative advantageous position of the economy and
organization.
Discussion
Porter’s diamond model is introduced by Michael Porter in his book ‘The Competitive
Advantage of Nations’ in 1990. This is a kind of a strategic economic model. The model is
aimed at explaining why and how a nation owns competitive advantage in a specific industry.
The model delivers a brief description about the external competitive factors for a company. The
company will be able to acknowledge its strength with the help of this model (Capik and
Brockerhoff 2017). It is observed that the success of a business depends on both external and
internal factors. The external factors include geo-political situation, the nosiness strategy of the
competitors and governmental rules and regulations. In terms of the internal factors, the labor
force, work environment, capital flow and financial strength are the important parameters.
According to the paper, the concerned country and company are the United Kingdom and the

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Apple Inc. respectively. The data shows that the technology sector has been performing well
since the last couple of years. The UK technology sector is counted as the world’s third largest
sector after the USA and China. This impressive growth accounts for the emerging foreign
investment in the tech companies and growing domestic demand for the technical gadget and
services (Sukardi, Rusdiawan and Wardana 2019). Th e revenue of the technical companies
operating in the UK has been surged up around 5% during 2018. This evolving growth is the
attractive feature for the foreign tech companies like Apple. The company has been reported to
hike revenue by 20% in the last quarter as compared to same quarter of the last year.
In this context, the brief analysis of the Porter’s Diamond Theory is necessary to
understand the comparative advantage of Apple in the UK economy. The Porter’s Diamond
model asserts that there are some significant parameters which define the comparative efficiency
of the company. These pilers are related to the presence of advanced quality, specialized inputs
available to the company, market size and modification of local consumer needs, domestic
availability of supporting industries, government rules and incentives, and political influencing
factors. Comparative advantage refers to the situation where the economy produces goods and
services in more efficient way than other economies (Li-Xia et al. 2017). The opportunity cost of
those commodities and services is comparatively less. As per the researchers, the economy
should extend the trade of those products and services which own comparative advantage. This
increases the profit diminishing the cost of production for the economy (Vlados, 2019). This
consequently encourages the producers to invest in the production of those goods. The UK
economy is ranked at 7th position in terms of the country attractiveness index, published by the
Ease of Doing Business report of the World Bank. This index considers several significant
factors related to the country’s business sector, such that, initiating a business, dealing with

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constructions consents, getting credit, paying taxes, trading across borders and resolving
insolvency (Rodrigues and Khan 2015).
Out of all these factors, rank of trading across border reflects the degree of trade
liberalization the economy proposes to the international company. In this regard, the UK
economy has scored a better result to the USA economy. The overwhelming presence of the
Apple retail stores across 16 towns in the UK economy is considered as the outcome of this free
trade policy. Apart from that, this has contributed a lot to the domestic employment sector
(Shuo-Fang and Sue-Wen 2016). The domestic tech ecosystem is now counted as one of the
important employee hubs for the UK economy. Referring to the Porter’s Diamond model, high
quality production inputs, like, labor and technology enhances the output growth. The available
inputs are categorized into two factors, such as, basic factors including environmental conditions,
skilled labors and raw materials. The second category is termed as the specialized factors
considering infrastructure facility, technical knowledge and narrowly skilled workers. Apple has
been able to deliver an impressive growth due to advancement in both the basic and specialized
factors. Being a developed country, the UK economy is structurally developed and holds a
notable size of technically advanced and skilled labors (Mboya and Kazungu 2015). Appl is the
world’s renowned tech company. The company manufactures the world’s most technically
advanced products and services for the customers. Therefore, the manufacturing unit needs
highly technically skilled workers. As per the Global Competitiveness Index, the enhancement of
the skill develops efficiency driven economy. In this case, higher education, product market
efficiency, employee efficiency, financial market, technological readiness and market size are
considered as the important pillars to derive an efficient economy (Kharub and Sharma 2016). In

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addition to that, innovation is another key determinant factor to assure the business prospect of
Apple in the UK economy.
On the face of growing competitiveness in the UK tech market, Apple is continuously
trying to hold a strong position through innovative tech solution. According to the Porter’s
model, external factors like geo-political situation is one of the major concerns for the company.
Hence, the recent Brexit issue is the serious political challenge for the UK economy. It raises
enormous size of economic uncertainty for the foreign companies (Riasi 2015). In this context,
several numbers of Apple retail stores are expected to be shut down as a post-Brexit effect. AS
per the researchers, post-Brexit is expected to reduce the monetary assistance from the foreign
countries. In response to the dearth of the financial resources, the structural development
program will be disturbed. The sustainability of the economic success will not be possible if the
work on the structural improvement gets delayed (Yoyo et al. 2014). Infrastructural development
is the integral part for the betterment of the organization. It reshapes the existing industrial
structure. The UK economy is a capital-intensive in nature. Capital resource is the strength of the
UK economy. Therefore, consumption of the capital goods in an appropriate way should be
highest priority for the manufacturing units in the UK. Inefficient usage of capital resources may
cause huge loss for Apple. The company should manufacture those goods require more capital
compared to labor in the manufacturing process (Harzing and Giroud 2014). This will
consequently decrease the company’s production cost and improves the revenue.
Meanwhile, this growing capital revenue may result in the improvement of the wage level
of the labors. The higher the wage, the betterment in the standard of living for the general public.
It has been observed that increasing wage rate leads to the improvement of the per capita income
level. As a consequence of that, it boosts the aggregate demand for the advanced goods and

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services. The Porter’s Diamond Model implies that the choice and preferences of the consumers
are the important aspect for both national and international company. Moreover, size of the
market is the important variable for the strategy makers (Jinachai, Anantachoti and Winit-
Watjana 2016). Number of clients, trend in growth rate and average spending are the composite
of the market structure. Before initiating a business, every company does a market survey of all
these composites. Referring to the expanding tech business of Apple, the continuous
development of the UK economy is the key influencing factor (Tsiligiris 2018). Apple has faced
a 30% hike in the consumer demand for its technically advanced equipment. Instead of that,
local availability of the supporting companies has enhanced the business prospect of Apple. For
example, Deliveroo, Revolut, Blockchain and Darktrace are recognized as the local supportive
companies for Apple. According to the Porters’ model, state and national government are the key
collaborators to maintain both the economic and regional economic integration (Gümüş and
Hiziroğlu 2015). The government needs to paly a proactive role as to ensure the sustainable
progress of the international company, like, Apple. In this case, import tariff, government
incentive, price ceiling and price flooring are considered as the significant variables to measure
the degree of the freedom of a company.
However, the concerned economy has not obtained a good score according to the World
Bank’s business report. The complexity in the administrative structure augments the
establishment cost of the companies. For this reason, the foreign companies are reported to face
huge financial loss as a result of Brexit uncertainty (Capik and Brockerhoff 2017). It has been
observed that Apple is likely to counter with huge monetary loss on the account evolving
political crisis related to the Brexit agreement. The fundamental requirements for the internal
business are now in deteriorating condition. In addition to that, growing regional trade conflict

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has deteriorated the sales volume of the international tech company. Trade dispute related to the
intellectual property rights, product innovation strategy and pricing policy are the core problems
for Apple to sustain in the UK economy (Fang et al. 2018). In general, the products are charged
at high price level. However, the company has been able to keep its consumer strength strong
owing to its innovative and secured technical services. This reliable consumer size is the strength
of the company’s revenue. Nonetheless, the overwhelming incidence of data piracy and
infringement of private information has raised concern for the company’s promising data
security service (Samarasinghe, Ariadurai and Perera 2015). As a result of that, the company is
expected to lose a considerable size of reliable customers in the digital tech sector of the UK.
Further, this might squander the company’s strong reputation in the UK economy.
Meanwhile, the international company predicts that the poor transport connection may
aggravate the trade volume of the company. As per the study, Brexit will separate the UK
economy with the other countries of the European Union. This will turn the transportation cost
expensive for the company’s logistic department. Not only the transportation cost also the
transportation time will be extended due to the exist from the European Union. Despite all, the
company located outside the capital along with Cambridge, has hired is largely dependent on the
overseas workers. This growing dependency on the overseas employee will bring diminishing
impact on the domestic employment level (Valiollahpour et al. 2016). A few numbers of people
will be getting opportunity to join the technically advanced workforce of Apple. Altogether, it
can be predicted that the company will suffer the loss of local support from the people as well as
from the government.

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Conclusion
The paper concludes that the strategical approach of the Porter’s Diamo0nd model is
appropriate to analyze the overwhelming performance of the technical sector of the UK
economy. Responding to that situation, the international tech companies are also expecting an
impressive outcome from this economic progress of the UK. According to the researchers, Apple
has recorded a good revenue over the last couple of years due to stable growth in the national
income, infrastructural development, trade globalization and efficient labor force. However, the
UK economy as well as Apple, the world’s largest tech company is expected to face an economic
crisis due to the post-Brexit impact. The Brexit calls for the separation of the UK economy from
the EU. This will raise trade pressure on the international company, such as, Apple. The paper
further asserts that the country’s strong development in the technology sector will offset the
regressive effect on the UK based business units of Apple.

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