Globalization has been the current trend that has brought three main changes on the stage of the world. The birth of the invention of the modernity and the rise of the world, the emergence of the USA and the successful development and the rise of the rest of the world are the three main ingredients of globalization. Globalization has implemented newer requirements for the gathering of the information that is essential for the information of the policy in the current economy of the world that are independent in nature (Blenko et al. 2016). The global economy is the current base or the reality for all the companies and the multinational organization. While the multinational organizations have pursued internationalization since the last years, firms from the countries that are developing have also reached to the heights of global giants in the last few years. Globalization is the growing trend in the competitive international market. The rate of growth of the nations that are developing and their representations of the previous corporations highlights the economic growth in the current era (Cohen 2015). The multinational corporations in the current era are the major agents of the concept of globalization. This reality roots from the fact that the multinational companies tend to have many of the subsidiaries among which some do benefits from the notion of globalization. The impact of globalization on the growing multinational companies can either be good or bad, relying on the nature of the multinational corporation in the discussion. The assignment focuses on the most renowned multinational organization in the world, Apple Inc. and the impact of the globalization on the company within the span of years before and after the year 2008. The assignment furthermore highlights the changes in the nature of the globalization since the earliest times.
Started in 1976, Apple started off as a mere computer organization. In the current era, the company has expanded to the biggest organization in the world. This journey from zero to 100 of Apple is inspiring to many of the entrepreneurs in the current era. It has expanded as a very intricate organization specializing in top class mobile, laptop and accessories. The organization is best known for their hardware product that includes Macintosh computer system, iPhone, iPad, and iPod. With regards to its innovative and aesthetic designs that are comprehensive towards its various distinctive media campaigns, the company has been successful in establishing a reputation and popularity in the electronics industry for consumer goods throughout the world (Apple 2018). Apple has been selected as one of the admired and desired organization in the market by Forbes and the business times several times. With its unique ranges of products and the increased rate of mind-boggling, Apple has become the most successful institution of media and conversation through the analysis of the innovative trends, ideologies and the concept of globalization.
The concept or the process of globalization involves various and numerous interconnected and interrelated procedure that furthermore involves the internationalization of trade and finances (Zhang 2017). The development of globalization has said to increase the profit level of the company and helped in the successfully succeeding exceptionally in the context of advanced strategically moves for foreign exporting, importing and outsourcing.
The financial crisis of 2007 -2008 affected many of the countries which eventually resulted in the global economic crisis since the great depression (Chen and Bai 2016). Triggered by the concept of the proliferation of the financial products that linked to mortgage loans that are risky in nature, this 2008 crisis in the field of financial globalization amplified certain risks towards the banking activities and the financial markets.
According to different researchers, Apple has been successful in increasing its share of profits in the effect of globalization before the era of 2008 due to the ongoing process that involves internationalization of trade and finances throughout the world (Apple 2018). The newer structure of the economy has helped to lead the technology market of the United States to the top and led the company achieves its target of standing out as the best in the market with innovative strategy designs as compared to its competitors in the market. The significant success of the company in the global market has certain factors behind it (Nicolás Marín Ximénez and Sanz 2014). The CEO of the company targeted his aims initially on the high-end products of the technology and the growth and development of the technology of the consumer. One of the innovative strategies the company used in the era of rising market of globalization is the decision of the creation of limited quantity of products in the similar area of products. The company expected their own products to reach the epitome of success and leadership in the market (Khan, Alam and Alam 2015). Before the 2008, none of the popular makers of the phone emerged successful and classy as compared to the business strategy of Apple that can successfully survive the market with one arena of product. Before the year of 2008, with the rising stage of globalization, Apple adopted the strategy to focus more on the quality and in-depth research for the extended function of their products rather than the variety of their product range. The company adopted the strategy that more professional products of them will eventually lead to more consumers’ attraction (Gardere, Sharir and Maman 2018). Furthermore, with the rising globalization of the culture, the usage of the newly launched products of the Apple caused phenomenon-fetishism. People back in 2008 started to fascinate apple and the products of the apple as a fashion and a trend. The concept of globalization and ideology were the two most important factors that the company used to interact in the market of rising competition.
It is basically a simple and a very effective instrument that is generally used for the analysis of the situation for the fruitful identification of the main macro environmental level of forces that might be affecting the organization.
Figure: 1; Macro environment factors
Source: (Chen, Kim and Yamaguchi 2014)
Political Factors include factors such as tax policies, governmental stability, control of the trade, bureaucracy, tariffs, restriction over the imports.
Economic Factors includes inflation rates, trends in unemployment, costs of labor, business cycle stages, and patterns of trends and rates of interest.
Social Factors include consciousness of health, beliefs, and religion, the expectancy of life, lifestyles, and rate of population growth.
Technological Factors includes technological changes, basic level of infrastructure, technological legislation and development of the research related to the technological advancement
PEST analysis of Apple before the economic recession and the financial crisis of 2008 are one of the most comprehensive models for the study and evaluation of the effect of the various forces in the environment for the exploitation of the opportunities and threats.
The day of disillusion for the entire world was on January 14, 2008.
Figure: 2; Scenario before and after 2008
Source: (Finkle and Mallin 2010)
The figure above illustrates the figures of the company; Apple was having significant earnings about 50% higher than the normal level proper to 2008. The share of the company fell below the average level and Apple’s earnings dropped drastically. Though it remained positive through the later period with the following of some of the strategies and moves, the market of Apple faced severe challenges. One of the examples of the noteworthy event that took place in 2008 in the history of Apple is the Macworld 2008 when Jove’s launched Mac book Air. The valuation of the Apple started to drop through the products did not do badly either in the international market.
Regardless of the deepening recession of 2008 and softening sales figures, Apple still managed to set a record of single quarter revenue with a sales figure of more than 2.5 million Macs and 4.3 Million iPhones (Asghar, Shahzad and Mamoon 2017). According to internal data analysis, Apple sold 9% more products during 2008 than the figure for the last year, 2007.
The sales figure of the company was not at all hampered that much, only the growth of this multinational company got much slower due to the recession and financial crisis in the year 2008. The company bucks the recession of 2008 with some of the best results of finance.
Despite the economic gloom, the company was still able to hold up to its profit levels. This success was achieved by the company mostly by the newly launched Mac books and iPhone range that came to market from the mid of the year (Chen and Bai 2016). Though the company had been heavily affected by the currency fluctuations, the company found its strategical interventions and innovative ideas to resist and survive in the recession of 2008.
Since the year 2005, Apple has ranked at the top most position among all the competitors due to its innovative and unique devices and products. The company has increased its remarkable sales growth and exploration every year.
Figure: 3; Apple’s rising profit after the financial crisis
Source: (Khan, Alam and Alam 2015)
The above figure illustrates the high brand recognition and increasing sales figure of Apple. With an effective and strong marketing team and premium quality of the experiences of the customers, the company has increasing rates of cloud base services.
Apple receives the main part of its sales figure from out of the home state, it is thus important to understand the negative effect of political revolution or disturbance in the countries the company is operating.
Apart from the PEST factors that analyze the external factors which play a crucial role in assessing the company’s productivity, there are some of the legal and environmental factors like issues of pollution in China, problem of global warming and increased electricity costs that lies at the challenges in the industry (SHTAL et al. 2018). Apple may be facing certain challenges in the coming years based on the PEST Analysis, its distinctive features like unique design and exclusive ability will bring the assured success of the company and its rising revenue scales.
Globalization evolved due to the trends for the international trade across the boundaries of the nation and the conduction and the introduction of the activities related to business in multiple countries. It basically defined the procedure of the growth of the interdependencies among the industries in the national markets on the worldwide basis.
Figure: 4; The four phases of globalisation
Source: (Asghar, Shahzad and Mamoon 2017)
The above figure illustrates the four different phases of the globalization that emerged in the world with the different factors in the macro environments which have the direct impact on the globalization process. Levitt (1993), in his explanation first wrote about globalization and concluded that the factor that is acting as the driving force behind the market of globalization is the technology and the technological procedure. Yip and Bink (2007), in his model, explained further explanation of the forces that drive globalization.
Figure: 5; Four forces of globalisation
Source: (Castro 2016)
The figure above explains the political forces, social forces, economic forces and technological forces that resulted in an increasing rate of globalization among the industries and the multinational companies of the world. Some of the factors the requirements and the tastes of the customers, the existence of the globally based customers, the transferable marketing among different countries and the companies of different regions are the market drivers for the process of globalization (Greer and Hauptmeier 2016). Some of the competitive, government and cost drivers of globalization includes global based strategies, the interdependence of the countries, differences related to country-specific process, favorable logistics, tariff barriers, restriction on ownership, currency, regimes of intellectual property and regulations relating to marketing and technical standards.
Figure: 6; The potential factors of globalisation
Source: (Gardere, Sharir and Maman 2018)
The above figure highlights the evidence for the potential of the process of globalization. The globalization has been on the rising stage rapidly at the beginning of the twenty-first century. The financial crisis and the turbulence in the year 2008 could not slow down the process of globalization. The multinational organizations of various countries thus facilitated from the globalization (Asghar, Shahzad and Mamoon 2017). There have been both benefits and costs, advantages and disadvantages of the globalization procedure. The process has been beneficial for some and unequal for the others. A much-perceived concept behind the rising phase of globalization among the opponents is that the rich people are getting richer while the poor are getting poorer.
From the initial phase, the process of globalization is thus preceding at a speedy rate changing the international business market of technology and other industries in the world. The effects of globalization over the brand recognition and the productivity of the multinational organization are immense. Apple Inc. thus got beneficial big time from the process of globalization.
Multinational companies are thus facing a new era of the process of globalization. These are formerly characterized by the forces of polarization of the competition and the co-operation. There have been some of the changes in the environment of the international business with the identification of the issues of the dynamic environment (Huang and Hsu 2017). Some of these critical trends of the environment include the process of globalization in the provision of services and manufacturing procedure, global recession and majorly varied growth rates of economic growth that contributes to the rapid shifting patterns of distribution of the income and global wealth. Furthermore, religious fundamentalism, a threat of the international terrorism, increasing debate on the governmental future roles, increasing rate of dynamic international and national cultures, mass tolerance are some of the factors that have the crucial contribution for all governmental organizations, groups, and individuals.
Conclusion
Starting off as a mere computer organization, the journey of Apple is inspiring to many of the entrepreneurs in the current era. Apple Inc. has been declared as one of the most admired and desired organization in the market by several business magazines due to its unique ranges of products and the increased rate of mind-boggling of their customers. The assignment illustrates the effects or the impact of globalization over the renowned company. Furthermore detailed and critical analysis of the factors driving to the external forces of the company before and after 2008 has also been illustrated with the help of PEST Analysis shedding light on the upcoming opportunities, threats and the probable market structure of the products of the company. Regardless of the financial crisis of 2007 -2008 that affected many of the multinational companies of various developing countries, Apple has been successful in increasing its share of profits with the effect of globalization. The global economic crisis and the great depression could not diminish the sales and the profit margin of the company. One of the most important strategies of Apple Inc. during this time was cost optimization and not the minimization of the cost. Apple killed recession and introduced a changing nature of the international business with the process of globalization a continuum. The new era of the process of globalization thus induced some of the changes in the production and the working structure of the top multinational organization of the world.
References
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