Apple Inc. is an American company in the tech industry, it specializes in manufacturing of computers, smartphones, iPad and software. The firm happens to be the leader in the smartphone industry (Silver, 2018). Apple become the first ever company to cross the trillion-dollar market valuation mark on trading (Nasdaq, 2018). The initial focus of the company surrounded the development of desktop computers. It was until 2007, founder Steve Jobs revolutionized the smartphones we know today with the introduction of the iPhone (Nguyen, 2017). This momentous move pushed the company financially a mile ahead of others. The simplicity in the design and innovation of the iPhones attracts consumers, even though the market price of the iPhone is high than the market price of similar devices and the fact that it is regarded as a high end product (Hicks, 2012). The company decided to outsource its manufacturing to China to lower the cost of production (Salinas, 2018). Apple has maintained their position in the mobile technology industry and with that success we can assess entrepreneurial opportunities that exist outside the company. Opportunities are as followed:
This paper will focus on the assessment on the opportunity that Apple Company has on the emerging economies. The focus will entail political, social, economic and technological opportunities (Anastase & Grigorut, 2016). Apple has to do an assessment to test on viability of the opportunity and also the risk and uncertain that come along. The assessment will use a SWOT analysis tool kit (Silver, 2018). SWOT is an acronym for strength, weakness, opportunity and threats factors.
Data from World Bank shows that the fastest growing economies belong to countries that are classified as emerging economies. Statistically the emerging economies are growing in terms of GDP and per capita income. This is an indicator that emerging economies presents an addressable market for apple premium products. A growing per capita income indicates that the target market can afford apple premium products (Bort, 2016). A growing economy will most likely mean growth in business performance and apple should take this advantage of profiting from this growth.
Data shows that the emerging economies is largely consumption driven. This data can be used to study consumer behaviours and pattern. Insights from consumer patterns signifies that as the economy is growing the more of it is as a result of consumption. The need for apple premium products has been an addressed issues in those regions. Apple products are high end products and are usually associated with a higher social class (Silver, 2018). With time the different income groups will demand premium products, this will present an opportunity for the company to increase performance.
The target market for Apple products are people between ages 13-35, the demographic data for emerging economies show that the regions have the highest population growth rate in the world. A huge percentage of the population ranges between ages 6 – 40 (Post, 2017). Previously, apple gadgets where associated with teenagers and young adults in the US. The data shows that the emerging economies present a perfect market for apple products that has not been addressed (Sam Solutions, 2018).
Market trend data show that the working age range for individuals in emerging economies lies between 18-55 years for most. The fact is that the individuals happen to lie in the target market for apple products .Apart from that this group is termed to be tech savvy compared to the other age groups (Anastase & Grigorut, 2016). A working individual is able to demand and afford premium products that are not present in the current market. Insights from market trends patterns and population is crucial for apple, this indicators will influence strategic planning and marketing in this regions (Nguyen, 2017).
World Bank did a research and found out that emerging economies have the highest rates of unemployment (Anastase & Grigorut, 2016). In as much as it is the ideal target for Apple products the fact is the market cannot drive up the sales of the Apple products and services. Apple business model in the emerging economies cannot be sustained by the target market (Sam Solutions, 2018).
Emerging economies have lenient and favourable labour laws, this is in due to the fact that they are trying to attract foreign investors into the country. Apple has the opportunity of setting up manufacturing plants in these regions since they most likely have less cost of production compared to china. The hourly wages in the emerging economies are significantly low compared to china (Sam Solutions, 2018). If apple were to move manufacturing to emerging economies, they would really save a lot on production costs.
Competition from rival companies that offers similar products and services that are considered cheaper than Apple products and services. Statistics from World Bank show that the dependant ratio in emerging economies happen to be highest in the world. The disposable income for most household is less, thus most will opt to go for cheaper and affordable tech. Chinese firms are producers of cheaper gadgets, this posses a treat to apple entering into the market.
Counterfeit products from china happen to be dumped in emerging economies. Individuals cannot be able to differentiate between genuine and counterfeit. The penetration of counterfeit products will lower the sales of genuine Apple devices in the target market. Apart from that failure of the counterfeit products will cause reputational damage to the real brand (Sam Solutions, 2018).
The population growth rate of emerging economies happens to be the highest in the world. This can be attributed to decrease in infant mortality rates and increase in the life expectancy of people. Population growth will ensure a sustainable target market to offer Apple devices and products for long term. The dynamics of demographic in the emerging economies will inform on the strategic planning and decision making (Apple, 2018).
More and more countries in emerging economies are becoming politically mature. Economic and social issues are now influencing and driving the politics of the day. Economic development and growth are being spearheaded, policies are being implemented to ensure economic growth. Social issues like labour laws and pension schemes are being made aware. It is evident that social growth has a long term effect to the society positively. Stronger policies facilitate growth and attract foreign investments in to the country (La Monica, 2016). There have been improvement in policies that encourage human welfare in this regions.
Increase in the literacy levels in this regions has been identified as the driving force for demand of new technology. A learned population is able to keep up to date with the new tech and they are able to predict the future. Since majority of the population are considered to be tech savvy they are the drivers of the future technologies (Hicks, 2012). The demographic trends in emerging economies are slowly becoming similar to the demographic of first world demographic trends. Psychology states that a group that has a high literacy level tend to keep up with new and emerging events (Sam Solutions, 2018). Technology is driven by the target market and thus it is dependent on the literacy of the market.
Apple faces a stiff competition from technology firms that offer similar products and services (Bort, 2016). Samsung, Huawei, Microsoft and google are the major competitors of Apple. Most of these firm have already identified emerging economies to be ready market that has not been addressed yet. Most of the products in the market are all similar. (La Monica, 2016) Competition in the tech industry has been so rough to the point where companies are now copying new products and services that are being roll out.
The population growth rate will determine the target market for Apple products. A stable population growth rate signals a future market for apple products. Data for demographics will be essential for determining the trend pattern that the firm should expect in the future. A high growth rate signals a high market that apple can tap. The changes in the demographics also can be used to determine consumer behaviour patterns and trends and a slight change will have significant impact on the overall target market (Sam Solutions, 2018). The dynamics of the demographics will inform on the intrapreneurial and entrepreneurial opportunities that will exist in that said market. Groups derive technology, and Apple should be at the forefront to deliver products that the consumers need ahead of time (Bort, 2016).
Political issues will have a significant impact on the kind of legislature that are passed for governance. For instance the issue of data privacy has been on the news lately. Given this instance Apple could decide to develop products and services that will be in accordance with the rule of law (Sam Solutions, 2018). It is laws like these ones that offer the opportunity for the company to innovate and design new products. In instance where the security agencies have compelled the firm to hack some devices for security reasons, the firm has gone ahead to hack proof the devices and make it extremely difficult to access another person's information unlawfully. User privacy happens to be a priority for the company (La Monica, 2016).
Stiff competition from tech companies and non-tech companies has compelled Apple employees to be innovative and creative in designing new and exciting products. Apple hopes to design the future of technology and be the leader in the industry, for this reason innovation is highly sort be it in internally or externally (Sam Solutions, 2018). Thus intrapreneurial and entrepreneurial is highly encouraged.
Increase in the literacy level will ensure that firms are able to develop and innovate products that can best suit this particular market. Tech user have been the biggest driver and contributor to new technology. It is for this case that apple decide to offer the tools for tech development to the apple users. A learned market will demand advanced products from apple and this will force them to innovate new products.
A growing population will ensure that the Apple products and services will always have a ready market in the future. It is for this reason that the firm will benefit greatly if the target market will be large and have a high growth rate. A large population will ensure that the sales of the products are driven up and sustained for a long time. A growing population could be used to improve and sustain the business operation of apple (Sam Solutions, 2018).
Political issues have a long term effect for any firm in general, the policies that a country passes that affects individual will one way or the other affect the operations of apple (La Monica, 2016). If Apple participates in political lobbying then it would have positioned itself to influence current and future legislations that will have an impact on the long term goals of the company (Hicks, 2012). Therefore for the need of sustainability the company to be guaranteed the firm has to participate in the legislative process. Issues like data privacy will impact on the company's policies.
Competition from other similar products is enough reason for the firm to strive to innovate and create new products that will stand out in the market price (Anastase & Grigorut, 2016). Constant competition is enough push factor for Apple Company to ensure there are top of the tech industry. Constant competition will ensure sustainability of the company in the industry new and sleek products will attract and retain consumers of Apple computers (Sam Solutions, 2018). Competition leads to innovation which leads to revenues that will ensure the firm is sustainable for future ventures.
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