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Apple: The Brand Heard Around the World
Globalization is the trend of the world economy toward becoming more interdependent. Some companies deliberately restrict selling their product or service to just their own country. Similarly, some companies deliberately expand internationally for various reasons. Being a manager in this increasingly global and interdependent market means that you must understand the reasons for expanding globally and the importance of cultural differences.
Read the case below and answer the questions that follow.
Apple Inc. is the well-known designer, developer, and seller of electronics, computer software, and online services. In fact, Apple is so well known that the company has topped various lists as the world's most valuable brand. Building a global brand is a tough mission to tackle, but Apple has used the world's rapidly increasing trend of globalization to its advantage in various ways.
As of 2014, Apple maintains 425 retail stores in fourteen different countries and an online store available in over 35 countries. Apple has benefited from franchising and moving into profitable markets abroad, such as China's quickly expanding electronics market.
By globally outsourcing labor, goods, and services, Apple has been able to produce large quantities of products efficiently and cost-effectively. Global outsourcing is no secret to multinational corporations, so what is Apple's big secret? The answer is most definitely multifaceted, but one largely influential factor to this global outsourcing success story is supply chain innovation. Apple is known for its continued product innovation and unique product style and this competitive strategy flows into the company's sourcing and production strategy. For example, in 1998, Steve Jobs ensured that Apple's then-new iMacs would be available to large masses of people at Christmas by buying over 50 million dollars of holiday airfreight space. While this spending may seem exorbitant, Apple is able to use its cost-effective global production to save money for innovative processes like this that boost the company's competitive advantage.
Apple also benefits from participating in strategic alliances with companies from around the world. For instance, Apple has participated in distribution agreements with China's largest mobile phone companies like China Mobile, China Unicom, and China Telecom. Another valuable alliance located closer to home is Apple's agreement with Microsoft to embed Internet Explorer in all Apple computers in exchange for Mac compatible Microsoft Office software.
Source:
Excerpted from Iwatani Kane, Yukari; Rohwedder Cecilie. "Apple Strives for Global Markets: Electronics Giant Speeds Overseas Rollout of New iPhone to 88 Countries as It Looks for Growth." Wall Street Journal (June 8, 2010).
Which of the following is a reason discussed in the case that Apple Inc. has expanded its operations globally?