Question

What is Apple's global strategy, was it different when they entered the China market? Explain.

Answer 1

Globalization had lead the organizations to formulate global strategies. These are strategies are much suitable to the organizations which are facing problems with the cost reduction. They provide a platform for selling their products worldwide .

Apple Inc gains competitive advantage from differentiation strategy. It aims at providing innovative products and hence gaining the high customer value.

Differentiation Strategy: It is a strategy aimed at producing products and services considered unique industry wide and directed at consumers who are relatively price insensitive. Product development is one of its examples.It allows a firm to charge a higher price for its product and to gain customer loyalty because consumers may strongly attached to the differentiation features.

Apple Inc has special features like superior service, engineering design and product performance.

Apple Inc products have world wide acceptance and high brand value. As they provide innovative products the chances of imitation by its rivals is relatively low.

The strategy successful in one country may not necessarily be successful in other country because of various factors like social , economic , political and socio cultural . It also provides its product according to the taste and preferences of the customers.

One of the biggest smartphone market is in China. There are many smartphone companies in China that offer products at low and reasonable costs i.e, we can say that Chinese markets follow cost leadership strategy which is completely opposite to the differentiation strategy adopted by Apple Inc.

Xiaomi follows cost leadership strategy in conjunction with differentiation strategy. Hence it is able to penetrate various markets. Most of the Chinese markets follows cost leadership and gains a competitive advantage.

However Apple Inc has not changed its differentiaton strategy . It assumed that people are so popular and willing to pay high prices. Apple Inc has faced some issues in the Chinese market .

Consumers in china are not willing to pay an amount which is more than an average salary earned by them. Apple Inc reason for enetering into china was to penetrate their markets but they cannot compromise on their price. Also offering an inexpensive phone may lead to the damage of Apple Inc reputation. So they did not compromise on their pricing strategies.It also thought that customers would value its innovative products as it is already done in other global markets . Mostly consumers in China are very much sticked to the domestic markets.