Apple Going Global A Study of its Expansion in India
Apple Going Global: A Study of its Expansion in India
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Executive SummaryThis report seeks to present the attractiveness of India as an investment destination for Apple. Following its success in the American market, in China, and in Europe, Apple is looking for the next big investment region. India is very attractive in terms of economic and growth possibilities. Apple has shown spectacular expansion in sales, share prices, and profits were largely due to the revenues from iPhone products sales. The focus of this report is on Apple’s operations in the consumer electronics that it plans to expand in India. As a major player in the consumer electronics industry, the main sectors it participates in include: the personal computer (PC) market, the tablet market, the smartphone market, and its recent entry into the wearables market.
One of the most innovative companies in the world, Apple Inc has broken past computer industry barriers to participate in the consumer electronics, IT, and telecommunications as well as its recent entry into the film and music industries. Apple’s organizational structure allows the company to continue to develop at a quick pace. The utilization of the spoke-and-wheel hierarchy, the importance of function-based grouping, and the presence of a product-based grouping are some of the most visible characteristics of Apple’s organizational structure.
With India being the fastest-growing Asian country in terms of GDP growth, it is creating new revenue prospects for both local and international businesses. As the world’s second-most populous country, India is now also a significant contributor to the world’s economic growth. They have risen to become one of the world’s most prominent commercial centres. India, being a developing nation, provides a variety of opportunities for businesses, especially start-up businesses. As a consequence of this factor, well-known corporations such as Apple have began to seek for potential markets in this region of the world.
Key words: Apple, India, iPhone, iPad, Huawei, Xiaomi, Samsung, FDI, investment attractiveness.
Table of Contents
TOC o “1-3” h z u Executive Summary PAGEREF _Toc99412283 h 21. Background PAGEREF _Toc99412284 h 41.1 Short Overview PAGEREF _Toc99412285 h 41.2 Apple’s Operations and Major Products PAGEREF _Toc99412286 h 41.3 Apple’s Industry and Key Sectors PAGEREF _Toc99412287 h 41.4 Apple’s Key Competitors PAGEREF _Toc99412288 h 52. Review of Theoretical Concepts or Models PAGEREF _Toc99412289 h 52.1 Apple’s Success PAGEREF _Toc99412290 h 52.2 Organizational Structure at Apple PAGEREF _Toc99412291 h 62.2.1 Spoke-and-Wheel Hierarchy PAGEREF _Toc99412292 h 72.2.2 Function-Based Grouping PAGEREF _Toc99412293 h 72.2.3 Product-Based Grouping PAGEREF _Toc99412294 h 72.3 Organizational Theory PAGEREF _Toc99412295 h 73. Analysis and Discussion of Institutional Voids PAGEREF _Toc99412296 h 83.1 Background of India as an Expansion Destination for Apple PAGEREF _Toc99412297 h 83.2 Economic Factors in India PAGEREF _Toc99412298 h 83.3 Political and Legal Factors in India PAGEREF _Toc99412299 h 93.4 Environmental Factors in India PAGEREF _Toc99412300 h 103.5 Social and Cultural Factors Relevant to India PAGEREF _Toc99412301 h 114. Conclusion and Recommendations PAGEREF _Toc99412302 h 12Reference List PAGEREF _Toc99412303 h 13
1. Background1.1 Short OverviewApple is an American corporation founded in 1976 and one of the first to attain a $1 trillion in terms of its market capitalization (Podolny & Hansen, 2020). Apple Inc., which was founded in Cupertino, California, in 1977, is based in the same city. In addition, the firm offers services to individuals and small enterprises, as well as educational institutions, large corporations, and government entities, among other clients. App Store is the location where Apple distributes third-party software for its devices that are not produced by the company’s own developers. The firm offers its goods via a range of channels, including retail and online shops, a direct sales force, third-party cellular network providers, distributors, merchants, and resellers. The company also sells its products directly to consumers.
1.2 Apple’s Operations and Major ProductsThe company has shown spectacular expansion in sales, share prices, and profits were largely due to the revenues from iPhone products sales. Apple’s business revolves on the iPhone, which is its most important product. The well-known smartphone manufacturer is among the world’s biggest smart devices makers (Cegarra-Navarro et al., 2019). With the introduction of the iPhone 13, a new standard for performance has been set, and consumers have been given the ability to create and engage in whole new ways, as reported by He (2021) showing that this gadget outsold other models. More success is expected for the iPhone 14 that will be launched later in this year 2022.
Apple also develops, manufactures, and sells tablets, smartwatches, and other wearables, in addition to smartphones and laptops. It also provides a broad variety of other services. AirPods, Apple TV, the Apple Watch, HomePod, and iPod touch are all available. Apple produces PCs, iPads, and TVs. It also has AppleCare assistance, cloud storage services, and platforms like the App Store where users may explore and download apps and digital content for personal use. Books, music, films, games, and podcasts are examples of other products and services that are offered under the Apple brand. Apple’s services include Apple Arcade, Apple Music, Apple News+ and TV+, Apple Pay services, and intellectual property licensing services.
1.3 Apple’s Industry and Key SectorsThe focus of this report is on Apple’s operations in the consumer electronics that it plans to expand in India. As a major player in the consumer electronics industry, the main sectors it participates in include: the personal computer (PC) market, the tablet market, the smartphone market, and its recent entry into the wearables market (Granstrand & Holgersson, 2020). For these sectors, Apple faces intense competition from Huawei, Samsung, Xiaomi, Oppo, and other significant players like Nokia, Google and LG. These firms are also significant leaders in the wearables, tablet, and smartphone market. In addition, Apple faces competition from HP Inc, Lenovo, Acer, Dell, and Asus in the PC market. The tablet market also recently saw the entry and dominance of Asus and Amazon, with products that are competing no the basis of price with Apple’s iPad.
1.4 Apple’s Key CompetitorsOver the years, millions of consumers have come to connect Apple Inc. products with cutting-edge technology, a sleek appearance, and user-friendly user interfaces, among other things. Apple Inc is in the Fortune 500 list as among the largest U.S. corporation by revenue (Tien, 2019). Despite this, the firm must contend with some kind of competition. Given the fact that Apple has a presence on a variety of platforms (desktop computers, laptop computers; tablets; wearable devices; and smartphones), the business faces a wide range of competitors. Other firms are fighting for a slice of Apple’s lucrative industry, and the competition is fierce. Because the information technology sector is continually growing, new enterprises are always joining the mix (Tsai & Chang, 2018). Greater competition benefits consumers by providing them with more options for innovation as well as lower prices. In Apple’s favour, the company has built a brand name that is consistent with high standards of quality, innovation, and longevity. In contrast, Apple’s rivals are constantly offering newer items at prices that are a fraction of Apple’s on the vast majority of products (Kim et al., 2020). Consider the case of Samsung, which gets quite close to competing with Apple in every aspect of its business. It has the benefit of being the lowest-priced manufacturer of high-quality items, as shown by the recent entry of Xiaomi (Tabassum & Ahmed, 2020). With these firms and their activities, it is possible that the consumer’s attention will soon move from the product to the price, resulting in a decrease in Apple’s share of the market.
2. Review of Theoretical Concepts or Models2.1 Apple’s SuccessEven before formally entering the Indian market, Apple already had a strong presence in the country, where it employs more than one million people via its internal employees, applications, and supplier partners (Tu et al., 2018). As part of its longstanding commitment to the country, Apple has made major financial investments in the IT and tech sector. Over the last several years, Apple has been actively increasing its footprint in India, according to Petryk (2020). Because of the Covid-19 epidemic in India, customers have flocked to Apple products, mostly because they can work and study from the comfort of their own homes, thanks to technologies like iPhones, iPads, and Mac laptops. Apple had already begun selling its goods to Indian consumers via a third-party channel, in reaction to the dominance of rivals Samsung and Huawei in the Indian market. As seen by a study at the Indian market and the company’s recent growth, Apple faces a vast number of significant foreign competitors in a range of product categories (He, 2021). Consumers in various income classes are growing less loyal to particular brands as a result of the fast advancement of technological innovation, price sensitivity, and the influence of other demands such as economic, socio-cultural, and environment-related factors. If Apple wants to be a competitive force in the Indian market, it must dedicate significant resources to the creation of innovative goods as well as the upgrade of existing devices with new features, in order to rival Huawei and Samsung who already have significant footing in the nation.
One of the most innovative companies in the world, Apple Inc has broken past computer industry barriers to participate in the consumer electronics, IT, and telecommunications as well as its recent entry into the film and music industries. Few would have imagined this as it was struggling to break out in 1997. Innovative products that redefined their markets (like the revolutionary iPod, the pace setter smartphone iPhone, and the recent success in the iPad, as well as the new Apple watch) have all helped Apple to edge its main rivals in variant industries, and the competitors in focused markets (Podolny & Hansen, 2020). A loyal fan base also has largely contributed to Apple’s success, as did a business model that emphasized product and process interoperability, lean processes, and operational complementarities.
2.2 Organizational Structure at AppleApple’s organizational structure allows the company to continue to develop at a quick pace in spite of economic downturns and other aspects such as the COVID-19 pandemic. The organizational structure of a corporation like Apple has an impact on the development of new goods, such as the Apple Watch, the iPhone 13, and other products and services in other categories in the marketplace (Hsu et al., 2021). The utilization of the Spoke-and-wheel hierarchy, the importance of function-based grouping, and the presence of a product-based grouping are some of the most visible characteristics of Apple’s organizational structure.
2.2.1 Spoke-and-Wheel HierarchyApple’s organizational structure is clearly hierarchical. In the past, Steve Jobs handled all aspects of the organization, including major decisions and daily activities of each department. Nevertheless, during Tim Cook’s tenure, Apple’s organizational structure has seen some minor changes There is increased integration of various departments including the software and hardware sectors of the organization. Vice presidents and senior managers at Apple now have greater discretionary authority than they had under Steve Jobs. A new hierarchy has been established, with the current CEO at the top of a spoke-and-wheel system rather than a top-down one.
2.2.2 Function-Based GroupingFunction-based grouping, that is a component developed from the functional kind of management structure, is found in Apple’s top tier management level. Every senior vice president reports directly to the company CEO and is in charge of a certain functional area (Podolny & Hansen, 2020). Apple, for example, has a senior vice president of industrial design, a senior head of marketing, and another for the company’s retail function. Apple’s senior executives handle business demands in terms of functional departments in this element of the management structure.
2.2.3 Product-Based GroupingProduct-based grouping is used at the bottom levels of Apple’s management framework. A product-based grouping, according to ( ), is an element generated out from divisional style of organizational structure. There are several vice presidents for various outputs or products after the top management level, below the company’s senior vice presidents. Apple, for example, has a vice president in charge of its iOS apps, another in control of devices like the iPad, and another in charge of numerous consumer applications. The corporation may target certain items or essential products because of this unique characteristic of the organizational and management framework.
2.3 Organizational TheoryWhen it comes to business research, organizational theory relates to the methodologies and tactics used (Hsu et al., 2021). The notion is essential for assuring the efficiency and long-term existence of a corporation. Businesses often experiment with a variety of different techniques. The Porter’s matrix, for example, has been used to study the numerous elements that might effect a product or an organization as a whole, as will be discussed later in this document. Corporations have also been evaluated on the basis of their purpose, vision, and objectives in order to determine their capacity to achieve their goals (Podolny & Hansen, 2020). It is vital to recognize that organizational theory has an influence on everything from employee behaviour to overall firm productivity and profitability.
Apple is among the world’s biggest technological corporations. To obtain access to a certain customer in the market, the organization has focused on innovation and modern technology. Many events in Apple’s history may be defined as paradigm shifting (Podolny & Hansen, 2020). The company’s business model shift, on the other hand, was a pivotal occasion. The company’s initial concentration was solely on computer hardware, yet now it has shifted its focus to include function-based grouping and product-based grouping to enable integration and individualized focus on software and in other service industries.
Apple has a well-thought-out business strategy in place prior to its current success. This must be changed in order to enhance the quantity of shares available on the market for purchase. Indeed, it is possible to argue that the transition in Apple’s business model has been the most significant revolutionary movement in the company’s history (Hsu et al., 2021). Previous business models argued for the company’s core product to be computer software and hardware; nevertheless, the current business model advocates for the company’s main product to be individual consumer electronics.
3. Analysis and Discussion of Institutional Voids
3.1 Background of India as an Expansion Destination for AppleWith India being the fastest-growing Asian country in terms of GDP growth, it is creating new revenue prospects for both local and international businesses. As the world’s second-most populous country, India is now also a significant contributor to the world’s economic growth (Singh, 2019). They have risen to become one of the world’s most prominent commercial centres. India, being a developing nation, provides a variety of opportunities for businesses, especially start-up businesses (Othman et al., 2018). As a consequence of this factor, well-known corporations such as Apple have begun to seek for potential markets in this region of the world.3.2 Economic Factors in IndiaApple puts a great emphasis on the stability of the economy it plans to enter. The economic health and well-being of India is favourable for Apple, as seen by its presence in the country. Various economic variables have an influence on the profitability of a company, and these elements may be utilized to define short- and long-term objectives for Apple. Other elements that influence Apple’s financial success include the economy’s growth and inflation rates, employment and unemployment rates, and consumer buying power, all of which have an effect on Apple. A well-known company such as Apple has responded to these issues by developing a supply-demand model for smartphones and personal computers that is based on the criteria mentioned above. Growing GDP provides more chances for companies and foreign direct investment, which is a good thing for everyone (Nedumaran & Manida, 2019). Since the country’s economic reform in 1991, India’s open industrial policies have attracted a significant amount of foreign investment (Kathuria, 2008). The economy has benefited as a result of this policy. Furthermore, the Indian government’s tax laws are advantageous to the development of the country’s commercial sector. Aside from that, the massive domestic market offers a plethora of interesting new business options for entrepreneurs to explore.
3.3 Political and Legal Factors in IndiaA business’s success and the success of its employees are both dependent on the political stability of the jurisdiction in which it operates. Political metrics relate to government rules and policies that have a direct influence on the earnings of a certain company or sector. Foreign trade strategy, taxation, service charges, municipal taxes, labor relations, taxation policies, environmental regulations, and corruption are just a few of the issues that are relevant to Apple’s operations in India. Political issues have a direct impact on the stock market of the nation (Sultan, 2013). As a consequence of its boundary disputes with neighbouring countries, India has been wracked by political turbulence for many years, although this has not caused major instability. Political crises, such as those caused by competing political interests, ideological conflicts, and other factors, have an impact on the well-being of the state and businesses therein.
Despite the fact that the situation has improved significantly in recent years, the political element of the issue continues to be a cause of concern. In general, political stability in India promotes economic growth by allowing businesses to thrive (Woo & Heo, 2009). India is an independent republic and the world’s largest democracy, with a population of an estimated 1.2 billion people (Sahoo et al., 2021). The nation, on the other hand, must address the challenges posed by corruption. Only in this way will the country’s economy be able to develop. The government has sought to reduce government or political involvement on enterprises, start-ups, and economic activity in general on a number of occasions via the privatization process. It will aid businesses in their efforts to become self-sufficient.
When doing a commercial analysis of a potential market, legal factors often overlap with political considerations (Bose et al., 2016). Among the issues discussed are equal opportunity for everyone, marketing, competition rules, copyright protection, consumer protection legislation, and other related matters. All of these are viable choices, especially for multinational firms looking for a trade opportunity in India, such as Apple. Companies are required to adhere to the laws and regulations that are particular to each country or region in which they do business. It is possible that changes in legislation governing recycling, employment, and discrimination will have an influence on the firm’s prices and labour expenses (Dewangan et al., 2015). Foreign brands may be able to take advantage of the country’s more liberal regulations regarding international trade. India has lately implemented many regulatory changes, including recycling, a minimum wage increase, and anti-discrimination legislation against people with disabilities, all of which have had an immediate effect on the country’s businesses. However, in terms of the environment, India’s air quality has been deteriorated as a result of industrialization and urbanization, resulting in a number of health problems. The result has been the establishment of environmentally conscious groups, noise limitations, garbage management and disposal regulations, among other things.
3.4 Environmental Factors in IndiaIn spite of the fact that India has made significant strides in recent years, the country still faces a slew of environmental challenges such as pollution of the air and waterways, flooding, resource depletion (particularly in the water and forest sectors), biodiversity loss, and the diversion of waste from consumers into rivers and waterways. Some environmental challenges may make it more difficult for expatriates to dwell in certain places owing to the nature of the environment. The importance of long-term viability for businesses in India means that an increase in environmental awareness may open the door to new development prospects for Indian companies in the future (Mishra & Jaiswal, 2012). Climate change technology, pollution, and a scarcity of raw materials are just a few of the challenges to consider. Environmental concerns are becoming more essential as a consequence of the ever-increasing ecological challenges. It is imperative that businesses develop new methods in order to combat it. Businesses have been forced to rethink their business strategies as a consequence of shifting customer needs and a shift in the demand-supply paradigm brought about by environmentally friendly goods and processes. Businesses in the infrastructure industry, in particular, may suffer as a result of the unpredictability and volatility of the Indian economic climate, which may be particularly damaging. Industrialization has been a significant source of worry for the whole nation as a result of increased pollution and a detrimental influence on health and safety. All businesses must implement sustainable business practices, such as recycling and improved waste management, in order to be successful. Because of the natural beauty of the region, it draws a great number of visitors. It has the potential to contribute to the economic and commercial growth of the nation.
3.5 Social and Cultural Factors Relevant to IndiaIt is included in the sociological category the elements that influence and affect consumer attitudes. Customs, values, views, population growth, medical difficulties, lifestyles, professional attitudes, and a variety of other factors all contribute to the development of socio-cultural norms. It assists industries in understanding the tastes and preferences of their target audiences.
Social variables are defined as any changes in social norms that have an impact on the business environment in which they occur. For example, India’s population ageing has led to a considerable rise in pension payouts as well as an increase in the number of older workers being recruited. India has a populace of over 1.2 billion people, with more than 70% being between the ages of 15 and 65 (Sahoo et al., 2021). Apple has to be aware of such demographics and other associated characteristics at all times. For example, these frameworks have varying degrees of adaptability when it comes to educational requirements, work attitudes and income distribution among other things. India is a nation with a wide range of cultures. India is a multi-lingual, multi-religious, and multi-ethnic country that has a diverse population.
Despite the fact that community cohesiveness is a considerable advantage, regional tensions do sometimes erupt in the country. India’s movie industry is well-known all over the world for its quality. Apple must be knowledgeable with the cultural attitudes, acceptability, and other elements that exist in the nation in order to operate a firm there. In addition, the corporation should be aware of the availability of local labour and the demand for its products. The population of the nation has an impact on every sector of the economy (Mohan Kumar et al., 2019). Because the vast majority of the population is working, businesses have an easier difficulty recruiting qualified individuals to fill positions. Labour prices are becoming more reasonable as the world’s population continues to expand, resulting in decreased labour expenses for Apple (Patel, 2014). The enormous domestic market of this country is another reason why multinational corporations pick it as a location for corporate expansion. The reasons for this include a rise in the standard of living as well as a transformation in one’s way of life.
4. Conclusion and RecommendationsDespite the fact that China’s economy is the world’s biggest developing market, India is on the verge of catching up with the country in terms of economic development. The fast growth of India’s population, along with the strength of its economy, has put the country on the brink of surpassing China in economic growth and expansion. Also, as a result of the country’s rapid economic development, India has a youthful and educated population that is capable of maintaining the country’s riches. Indian exports are most well-known for two things: information technology and business process outsourcing, both of which are produced in large quantities in the country’s industries. Furthermore, the nation’s labour is rising at a greater rate than the workforce of any other country on the earth.
A large proportion of India’s population is made up of young people. In accordance with the findings of this discussion, the country’s long history of parliamentary democracy and free-market economic policies, India is now a more secure investment destination than many other developing nations in Asia and elsewhere in the world. In contrast, the country’s unstable geopolitical situation presents risks that must be considered prior to making a choice on whether or not to make an investment. A workforce that is young, well-educated, and rising should be beneficial to the economy’s growth. This is done in accordance with the country’s belief that its educational system teaches students how to steadily improve the economy over time. India’s countries, notably in the information technology and business process outsourcing sectors, are also seeing rapid expansion in recent years.
India should be considered for investments by Apple. The benefits discussed herein show that even with the drawbacks of geopolitical instability and corruption, the country is likely to outperform China in terms of development, and the benefit sof a large population. Apple should be aware of a need to rethink its presence in Asia without a proper footing in India. Therefore, the report recommends immediate expansion to India.
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