APPLE INTERNATIONALIZATION FINANCIALLY & OFFSHORE OPERATIONS Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

APPLE INTERNATIONALIZATION FINANCIALLY & OFFSHORE OPERATIONS Case Study Solution

Introduction

Apple Inc. is a company that designs, manufactures and markets personal computers, software, networking solution and portable digital music players. Its product portfolio includes desktop and notebook computers, iPod digital music player, the iPhones, the Mac OS X operating system, the iTunes music store and the Xserve products. The company’s products are sold online, through wholesalers, and through its own stores (Bello, 2012). It owns approximately 125 retail stores in the United States, and in Canada, Japan and the United Kingdom.

The founders Steve Jobs and Steve Wozniak created Apple Inc. in April 1976 initially, the company just produced the personal computers for two decades. With the introduction of the successful iPod music player in 2001, and iTunes music store in 2003. Apple established itself as a leader in the consumer electronics, and media sales industries (Tan, 2015). The company is now known for its iOS range of smart phone, media player, and tablet computer products.

Throughout the years, Apple has maintained the high quality and innovation in their products, making it a different and successful brand. The attributes of style, uniqueness, reliable operating system, innovation, retina display, multi-tasking and its intuitiveness make it world’s number one brand (Duhigg, 2012).Apple focuses on innovation and new design, and takes less time than competitors to launch their new model.This is the reason that their brand on top, and ahead of their competitors. Due to its quality and its marketing strategy, it is known and preferred amongst its loyal customer base (Tan, 2015). The stock value of the company has been consistently growing as shown in exhibit 1 in appendices.

When Apple has pursued its internationalization strategy it had faced a number of financialization issues such as changing nature of capital markets, access to capital markets, partnership challenges, and setting up the financial strategy of the firm. Research says that internationalization involves a number of ongoing interrelated processes, which include the internationalization of trade and finance. Because of internationalization, Apple had increased its profits (Bello, 2012). In the research paper, we discuss about the internationalization of Apple’s operations, and the establishment of the offshore operations of the company. The financial problems and challenges faced by the company, lessons learned and specific recommendations for the company to sustain its strong foothold in the market.

Internationalization of Apple

The car was the key to the US economy in the earlier years of America. However, today a new economy structure has emerged in part, due to the work of Steve Jobs who is the former CEO of Apple. He had helped to lead the US economy market to be the top. In the global market, Apple Inc. has succeeded exceptionally in terms of its operations, advanced technologies and strategies.That utilize most frequently on foreign sourcing, exporting and importing (Institutions, 2015).

As of April 2016, Apple has developed more than 600 retail stores around 15 countries, and an online store is available in 40 countries. The highest global sales of the company had been $ 16 billion in the year 2011 (Croteau, 2011). As Apple is a multinational corporation, it has realized the significance of its global operations, by spreading and expanding its operations around the

Internationalization of Apple

The revenue of Apple contributed by each of the six regional revenue segments of the company is widespread that are shown in figure 1 below:

Revenue Spread by Segments of Apple Inc (Institutions, 2015)

Apple has also good seizing opportunities in the international markets. For exampleApple and China Mobile, which is the largest mobile carrier with around 740 million subscribers, have been working together on the distribution of phone agreement for more than 6 years (Tan(, 2015). They have also promised to make an agreement for the distribution of iPhone5C, although Apple had also worked with the second and third biggest mobile carriers in China, which are China Unicom and China Telecom for the past several years. If Apple now continues to operate with China mobile, then its revenues would grow much faster. It would benefit Apple within the global market that would be huge (McCREEVY, 2008).

Internationalization Effect of Apple Inc

Apple Inc is not a production company, but is a creative corporation. Although, the company has profited around $ 400,000 from each of its employee in the year 2011, few opportunities for work have been provided by the company in America.For example Apple has primarily relied on foreign market outsourcing to market one of their product iPod. Then in 2006, Apple had employed twice the employees outside of America for producing iPod (Institutions, 2015).

APPLE INTERNATIONALIZATION FINANCIALLY & OFFSHORE OPERATIONS Harvard Case Solution & Analysis

In 2011, the workers of Apple in United States were 13920, 27250 in abroad, which comprised of 12270 in China and 4750 in Philippines. It has become a visionary company, which is offering great opportunities to work for the people outside of America. On the other hand, there has been a wage gap among the workers of the company in America and abroad. For instance, workers in America earned $ 750 million, and the 27250 workers in abroad earned less than $ 320 million in their home countries (Schmukler, 2005). Overall, in this huge gap of employee payments, the ultimate winner is Apple and the shareholders of Apple.They have generated significant returns and amount of money from internationalization.

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