Apple Essay Example | Topics and Well Written Essays - 1000 words

Apple - Essay Example This form of expansion would include setting up a manufacturing base for sourcing products to the Asia pacific region and USA. Porter’s Diamond Model Michel Porter’s diamond model is used to analyze the aspect of success of firms in a particular international market (refer annexure 2). The dimensions of this model include the following aspects (Klug, 2006, p.14). Factor Conditions Apple with its talented pool of resources and innovative approach can easily use the talented pool of resources available in China. China offers a ready supply of skilled labor force at cheap rates that can help the company to manufacture products at very low prices. Demand Conditions China is the largest populated nation of the world and is also witnessing high growth in its economy. According to the CIA the GDP of the nation in terms of purchasing power parity is about 10.09 trillion US dollars as of 2010. Along with this the growing Western influence has also affected the consumer behavior of the Chinese consumers making it a market with huge potential for Apple to exploit (CIA, 2011). Related and Supporting Industries The presence of suppliers and a close co-ordination helps generate competitive advantage for the organization. Apple has been known to have a cordial approach in its relationship with the suppliers and also shares an innovative approach in research and development that can be very well replicated in China to generate competitive advantage. Strategy, Rivalry and Structure The industry segment catered by Apple is highly competitive with a large number of firms competing against each other in the market. The Chinese market is also categorized by the presence of fake and pirated goods. Apple with its innovative and high quality product offering can easily fill this gap that arises between the consumer demands and the product offering and generate competitive advantage. CAGE Analysis CAGE analysis is often used by organizations to evaluate new markets and na tions by firm while expanding internationally. CAGE stands for cultural, administrative, geographic and economic distance (Sethna, 2008, p.25-28). CAGE analysis is often used by organizations to evaluate new markets and nations by firm while expanding internationally. CAGE stands for cultural, administrative, geographic and economic distance (Sethna, 2008, p.25-28). Cultural Cultural factors are very important in case of international expansion as it helps in generating a better connect with the customers. Hofstede’s proposed five dimensions that can be used to analyse the cultural aspects namely, power distance index, individualism, masculinity, uncertainty avoidance and long term orientation. In these aspects China has been ranked 118 in the world and has the highest rank in Asia (refer annexure 3). This shows high values for culture and hence implies that Apple must follow a ‘glocalised’ approach in its expansion into China. Administrative China has autocratic governance and has strict laws governing the nation. The nation however has opened up its economy and is keen on getting foreign investors in the nation as a part of its liberalisation program. China however still maintains a cautious outlook towards foreign companies and tries to protect its domestic industries. Geographic