http://www.nytimes.com/2011/03/23/technology/23apple.html?

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Introduction
Apple is the currently the largest and most influential brand in the whole world.
The success of the organization is often attributed to its founder, Steve Jobs, who started
the company with a few other friends and began operating from the garage of his home.
The organization has since grown within a century to occupy a place few new
organizations can dream of achieving in the period. Apple’s marketing slogan is “Think
Different”, heavily implying the importance and consideration they give to innovation
when developing and introducing their products. The organization has been extremely
secretive when it comes to revealing their supply chain processes, even more so than
other companies which operate in the technology market. Apple has been at top of the
food chain due to its target market, which it has chosen to be the elite class with their
pricing strategies and product attributes. The organization was founded on 1st April 1976,
and introduced its first product, Macintosh in 1984 which gave it the needed boost to
establish in the market.

Challenges faced by Apple Inc. revealed in the article.

In the technological market, outsourcing is often considered the best option for
utilizing comparative advantage and this has been the reason why Apple is known to
import and buy spare parts to assemble its products from foreign technological markets
for parts. Japan and china are considered the best producers of parts that are desired by
the corporation. The corporation relies heavily on Japanese produced parts for its primary
production of goods. However the earthquake and tsunami that hit Japan seriously
affected Apple’s Supply chain processes as the corporation was unable to get its supply
of raw materials from the country. The shortage of raw materials resulted in the shortage
of goods that were to be produced by Apple. The corporation experiences a perpetually
high demand for its products due to their quality and features provided by the
corporation, as well as their post purchase services which is a great and practical strategy
for customer retention. The corporation had to face a 7% decline in its stock due to the
shortage and another significant decline in its reputation as well. Furthermore, the
shortage not only resulted in a loss for the company from an economic perspective, but
the loss of confidence was also drastic to the sales which were not made after the
unveiling of different products by the corporation in the year. Apple often books orders in
advance from its loyal customers who pre order these products to become one of the first
ones to use them. It is the company’s reputation itself that have placed the corporation on
the first position in the technological market even with competition from other large and
more diverse organizations such as Google and Samsung. Apple, over the years may have
grown substantially, still maintains its basic focus on trying to satisfy sub-groups of a
generalized population and this narrowed down target market is what prizes Apple above
other corporations.

Factors that led to such issues in International

Management
Lack of contingent suppliers
Apple Inc. is one of the largest corporations in the world, especially when it
comes to technological products. It is not uncommon for such an organization to keep
multiple suppliers on hand in case of emergencies, when the organization needs to
increase production it needs more raw materials from its suppliers. The corporation has
been known to be always dealing with a high demand as the consumers targeted by Apple
are those who do not rely on the factor of price for making a purchase, being one of the
reasons why android users often label Apple products as overly high priced. Facing a
perpetual issue of high demand, the resulting shortage cause even more havoc for the
corporation than can be imagined for any other organization. The corporation did not
seem to have any other suppliers for its raw materials to buy from in case of any such
emergencies rising for their primary suppliers.

Poor inventory management

Knowing the high perpetual demand, Apple was also not proactive to the number
of units they could have calculated which would have been immediately sold in the
market due to its reputation. If Apple had kept spare units in its warehouses for storage in
case of such an emergency where it would paralyze them to produce more units, then the
spare units produced could be used to regulate the revenues and maintain the
corporation’s reputation in the market. A buffer stock was not maintained by the
corporation, or if it was, the units were not in a number which could have satisfied the
number of customers for the products.

Introduction of new Software further increased demand

The year of 2011 was also the year that one of the most revolutionary applications
were developed and integrated into Apple’s hand-held products, Siri. Siri was the first
voice controlled system application which enable users to voice-control all actions on
their Apple hand-held products. The service has proved so successful that even after 6
years, it is featured in every hand held device sold out by Apple, to the extent that even
smart watches which a recent creation of Apple feature and heavily rely on Siri. The
software was so well received due to its intelligent system programming and intelligent
replies to user commands that the demands nearly doubled in 2011 for Apple products
such as Ipad 2 and Iphone 4s. The only problem that stopped Apple was that it had not
manufactured enough units of their products to sell to the majority of consumers in the
market. Also, Apple had introduced OS X Lion as an update for its computers which
meant that the demand was already high for Apple Laptops and Desktop computers.

Too much Secrecy for Suppliers

As mentioned above, Apple has always been a little too secretive when it comes
revealing its supply chain processes. Even the article itself clearly states that the shortage
of Apple products in 2011 can only be speculated as a reflection of the shortage of supply
from Japan due to its Earthquake and tsunami, but it was established that every
manufacturer of technological product directly or indirectly gets its supplies from Japan,
which meant that there is a sufficiently possible chance that Apple’s shortage of the
supply of especially Ipad 2 was the result of the crisis in Japan. The problems is likely to
become an even intense one as the article states that many analysts believe that Apple’s
shortage of supply will directly influence the decisions of existing and potential investors
of the corporation. The evidence from the statement can be seen when the stock prices
fell immediately following the shortage of supply from Apple of Ipad 2 and Iphone 4s.

Strict policies for picking out Suppliers

The article also clearly states that Apple has a tendency to cut off any supplier
that Apple fears will give out the information about Apple’s purchases. This means that
the range of suppliers Apple deals with is quite low, and an event where the suppliers
back out, Apple risks major blows not only to its production but also its reputation in the
technological market. The company works on a tight supply schedule, and due to
thinning supplies the situation is bound to get even tighter if Apple does not look for
alternate suppliers to buy raw materials for its products from. The corporation could have
also avoided the situation if their screening process to pick a supplier was not so strict.
Apple no doubt, commanded a great reputation in the market it operated in, proudly
talking about its high quality and highly innovative products, but the corporation has
often experienced limitations when needing to buy raw materials, so far as going to buy
raw materials from its competitors as well, such as Samsung.

Analysis of the Issues and Challenges faced by Apple

Fortuitous occurrence of the issue
The issue or crisis was an unpredictable one for every person. The disasters of
earthquake and tsunami that occurred in a single year in Japan was devastating news for
everyone in the world, and not only emotionally but also from an economic point of
view. Japan is often considered the hub of technological products, even though most of
the best known brands in the world of mainstream products are not based in Japan itself.
However it is an established fact that the country is the main resources for any
corporation which manufactures technological hardware or software. So it is sufficient to
say that every commercial entity that deals in technological products is likely to cross
paths with Japan. However the disaster that hit Japan in 2011 was a serious blow to
technological industry as well, resulting in the immediate seizure of technological
hardware circulating from the country. Not only Apple became a victim of this seizure,
but other corporations such as Google and Samsung also suffered greatly. However,
where Google and Samsung tend to also target full markets and segment their products
only based on prices and do not target specific classes or subsets of the market, they
found it easier to bounce back in the market. Such was not the case with Apple Inc.
which targets only the elite class and tend to keep their focus on a smaller number of
products than their competitors. Thus the shortage of raw material supply was more
drastic to Apple than other major corporations.

Apple’s targets
Whiles its competitors in the market tend to generalize the sectors of the market
and then target their product, Apple over the years, has kept its focus concentrated on
targeting only the niche sector of the market, meaning that it may not have the higher
number of users for its products compared to its competitors, but the users of Apple
products seems to be more loyal than users of other products. While its competitors try
and create products which are customizable by the users to a higher extent, Apple focuses
on keeping its Hand held products more user-friendly and easier to understand. The
corporation launched its Ipad 2 and Iphone 4s in 2011, which contained the application of
SIRI, which was the first step in the technological market for voice controlled hand haled
devices. Not only SIRI was more accurate than its predecessors, it enabled the users to
actually communicate with the phone to get a clearer picture about the device they used.
The advent of SIRI was another boost to the company’s sales and even now, after 5 years,
SIRI is one of the most successful applications developed by the company on hand held
devices, to the extent that many competitors have tried to imitate the features of the
service. The corporation, although a large one, was not able to satisfy the needs of its
targeted niche which results in the fall of its sales revenue as well a fall in reputation
which subsequently resulted in the fall of its stock by 7%.

Lack of Subsidiaries
During 2011, there were not active subsidiaries owned by apple that were actually
manufacturing, even beats being acquired only during 2014. This meant that the
corporation was unable to shift its focus to other products in order to counter the
conditions for its falling reputation and stock prices. The absence of subsidiaries also
meant that the corporation had no choice but to keep waiting for the flow of supply to
begin again so that Apple could bounce back in the market.

Strategies that can be adopted by Apple Inc.

Ethnocentric
The corporation is one that sells high priced products and targets a market niche.
It seems the corporation is currently following the ethnocentric orientation as a strategy
for it marketing sectors.

Mission
The mission currently followed by the corporation is a profit maximization one,
or so has been the case since the corporation as a company in a garage with 3 original
entrepreneurs. The products sold by the corporation are targeted for people who pay little
or no heed to prices and mainly concentrate on the style and features of the product or
service they are paying for. This is one of the reasons that Apple’s products, though
apparently over priced, are so much successful in the market.

Governance
Apple follows a strict chain of command and its culture is also a unique one. The
culture at Apple Inc. encourages creativity among its employees whilst at the same time
being very careful in disciplining them to keep the secrets of the corporation intact and
not let them leak outside. Apple follows a top down hierarchal organizational structure
and so the power lies at the top management and usually not the regional management
whether it is production side or marketing side of the corporation. The culture of the
corporation is such that many of Apple employees must be able to work according to the
guidelines provided by their superiors to meet the deadline.

Culture
Apple Inc. is based in USA, and typically the corporation is heavily influenced by
the culture of the home country itself. There is an encouragement of individualism and
only certain creative fields of the corporation such as those of product development
employ teamwork; otherwise most departments like Production prefer solo employees.

Technology
Apple currently employs mass production methods; however other methods are
neither applicable for the business nor optimum due to the nature of Apple’s products and
the demand for Apple’s products. Apple does not renew its patents for mobile phones,
opting to change the models every year resulting in changes in the technology employed
every year, this was another of the reasons why the production was halted as there were
few alternate methods remaining for production.

Marketing
The marketing methods and advertisement campaigns used by the corporation are
same throughout every country Apple Inc. sells its products in. The advertisements for
hand held are almost all the same as per product and are only translated or dubbed in the
national language of the country. Desktops and Laptops created by the corporation are
rarely advertised one the mainstream media and so when they are, ads are quite different.

Finance
The corporation has not revealed the use of its profits to general public. However
the corporation claims that the profits are used to invest back in the business and the
acquisition of companies. The statement seems true as it was after 2011 that Apple
started the strategy of expansion by acquiring many companies as its subsidiaries as in
2011 the only well-known of its subsidiaries were of Financial Assets management and
software based companies, whereas it was till 2014 when the first hardware based
enterprise was acquired (Beats electronics).

Personnel Practices
The corporation is notorious for never discussing its Human resource policies
with the public and being extra careful to hire employees and then have them sign a non-
disclosure agreement condemning them to discuss about the corporation in public.
However based on what is available about the corporation to public it is evident that
Apple prefers hiring and keeping top and middle level managers from its home country
USA.

Polycentric Orientation

Mission
The company would have to alter its profit maximization to public acceptance to
work on the polycentric predisposition. The corporation targets a niche of the full market,
which means that the shift from profitability to public acceptance is not a choice which
would prove to be very helpful to the corporation. Changing from a niche to full as a
target market would mean compromising on the brand itself and would never be
recommended for a company of specialization such as Apple Inc.

Governance
 The governance of subsidiaries to be decentralized would certainly make
management easier, not to mention that the subsidiaries may have different strategies
outlined than the parent company itself, which sometimes results in a conflict of interest
and an overall loss for either of them. However, the governance seems the only aspect of
the polycentric approach which seems suitable for the corporation and almost all of other
factors seem to be in a direct conflict with Apple’s current Brand Image.

Strategy
The strategy for polycentric approach is national responsiveness, a factor Apple
has never paid heed to since its establishment as its first priority has always been bringing
innovation to its consumers and best services to its consumers.

Structure
The hierarchy of the Corporation cannot be divided based on the areas as the
products made by Apple must fall in the exact same criteria. Although the factor is
applicable, but will not prove essential to the corporation as Apple sells its products even
in areas where it is not operationally present such as south-east Asian Sector.

Culture
Apple is the most powerful brand of the world, so adjusting according to the
country it operates and sells in would only weaken the brand itself when people will find
that the products are differentiated all over the world. Hence any other approach is ill
advised and the best strategy for the corporation is definitely its current one.

Conclusion
Apple Inc. was obviously able to deal with the crisis of its supply chain that
occurred after the disaster of Japan in 2011 and the corporation’s success is quite evident
from the fact that Apple is the most powerful brand in the world in the current year of
2016. The organization may not be old but is definitely a highly reactive one, resembles
many of the traits of the personality of its former owner and original entrepreneur Steve
Jobs. The organization has been great at targeting the niche of the market and this is
probably one of the basic reasons that made the organization famous in the first place.
Profitability may be one of the top priorities of the corporation, but it seems the
organization gives equal importance to its consumers as well.

Looking at the falling stock prices mentioned in the newspaper article, the
organization was able to bounce back in the market in the same week and also was able
to work its way into increasing its overall stock price as well in the same year. Also
production came back up during the same year and the Iphone 4s is considered one of the
most successful of the range of phones produced by the corporation.