PGBM16 Global Corporate Strategy

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 Executive summary

There are various international activities that have to perform by Apple Inc. to expand and
survive its business in the international market. Apple Inc. performs exporting and importing
activities to buy and sell the goods with the international market. In addition, licensing is another
international activity that is performed by it to spread its products abroad with minimum risk.
The organization has to make international strategies and business model to increase its
effectiveness. Apple Inc uses differentiation strategy as its major international strategy to deliver
high customer value through its innovative brands in overseas market. this paper will be
described the concept of internationalization with its advantages and disadvantages. This will be
demonstrated the corporate social responsibility for developing a strong market share in overseas
market.

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Contents

1.0 Introduction...........................................................................................................................4

2.0 Open Innovation and Internationalization.................................................................................4

Open innovation vs. closed innovation in Apple Inc...................................................................4

Current innovation strategy of Apple..........................................................................................5

The value of open innovation along with the closed innovation is increasing in Apple business
.....................................................................................................................................................7

Apple can determine what can be open and what can be closed.................................................8

Open innovation makes the pie of creative ideas for Apple to grow bigger...............................8

Both open and closed innovation can be a new business paradigm for Apple............................9

Impact of different factors on the Apple’s approach to external innovation and competition....9

3.0 Internationalization, Localization and Competitiveness..........................................................10

4.0 Organizational Purpose, Profitability and Social Responsibility Corporate profitability.......11

Corporate social responsibility..................................................................................................12

5.0 Personal reflection on learning................................................................................................13

6.0 Conclusion...............................................................................................................................14

Reference.......................................................................................................................................15

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1.0 Introduction
The globalized world demands that business organizations have to maintain corporate social
responsibility towards the international stakeholders for maintaining competitive advantage in
the global market. This paper has covered the explanation of research questions on the basis of
Apple Inc that runs its business in the international market. Apple Inc. is one of the largest
technological companies of the world. It is an American multination company which designs
their products, develops them and also is doing the marketing and selling process of their
products. Firstly; this paper explains the concept of open as well as close innovation and analyses
the effect of factor endowment, demand strategy, structure, government controls and
opportunities for Apple for ensuring its external innovation. Secondly; this paper comprises the
concept of internationalization with its advantages and disadvantages especially for Apple.
Thirdly; this papers consists of the explanation of firm’s objectives and the capability of the
Apple’ management body to maintain corporate social responsibility. Finally; my assessment
reflections are presented with recommendation to Apple.

2.0 Open Innovation and Internationalization

Open innovation vs. closed innovation in Apple Inc

According to Medina (2016), innovation can be divided into two types. One of them is open
innovation and the other one is the closed innovation. Open innovation makes the combination of
the internal and external innovation. It results in the much more use of the introduction of the
both inflow and outflow knowledge. Later, it helps to increase the amount of the internal
innovation. All of these things are resulted in the making of the internal and external innovation.
larger markets for the external innovation The internal and research and development as well as
external research and development plan are applied by Apple to meet the combination of the
companies must use the internal and external innovation in their business strategies to make the
proper development and use of the modern technologies which is very much clear from the
concept of the open innovation. Apple has used computer, advanced production machine and
digital platforms for ensuring better outcomes of internal and external evaluation. On the other
side, closed innovation is very much dependent on the implementation of the internal R&D. It

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gives focus on using the talents which helps to managing them the lifecycle of the innovation
process (Bock and Helhammer, 2018).

Diagram: Open innovation and closed innovation Source: Bock and Helhammer (2018).

Current innovation strategy of Apple

Apple makes their business strategies by largely depending on the open innovation. The
company tries to introduce lots of modern technologies nowadays. They are working hard to
develop the products according to the choice of the customers with the help of these
technologies. Apple keeps their focus to fulfill the demand of the customers by implementing
smart techniques on their business innovation (Apple Annual Report, 2018). In the most recent;
Apple has launched iphone 11 with more attractive features that attract more and more
customers. The smart techniques include the combination of internal and external technology
based and ensure the internal and external venture handling for ensuring better current market.

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 Figure: Apple Open Innovation

This framework helps Apple to show their creativity in the market through their products. It is
very tough for the other companies to do the replication of the strategy of Apple. The company
thinks that it is not necessary to open up the innovation of the companies to introduce the big
products in the market. At present; Apple has used open innovation strategy to introduce new
features of product with more attractive quality. Apple has added the several innovative features
with the Smartphone; introduce more productive apps and smart devices as the current strategy
to meet the demand of the customers. The innovation strategy of apple is a continuous task until
they find the most results. For this reason; Apple is a world's most innovative company because
this company focuses on hardware and software integration as current strategy.

The value of open innovation along with the closed innovation is increasing in Apple
business
Apple has introduced the open innovation process as the company want to break down the
bureaucratic culture. It is a type of dominated culture that reduces the employees’ participation in
the innovation and decision making. Apple has used participative culture in the working place
for ensuring the better innovation in the firm. Drucker (2015) mentioned that open innovation
helps the company to overcome the bureaucratic culture and to introduce new technologies for

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the business. The economic sector of Apple is growing very nicely nowadays as open innovation
strategy allows the stakeholders of the company to participate in the business strategies by
sharing their ideas with the company. Apple has applied the incremental open innovation
strategy for adding incremental value with the smart phones, personal computer and other
products. Though Apple has successfully applied the open innovation in their business, the
company also needs to implement the closed innovation process in their business. Apple has
large amount of internal resources and great talents in their employees which they need to use
properly to get success in their business. The company has used the closed innovative process to
make this possible in the effective ways. Close innovation indicates the inside innovation that
never focused to others. Apple has arranged several training and other facilities for individuals,
scientists or employees to improve their performance that ensure the close innovation of Apple
(Apple Annual Report, 2018).

Apple can determine what can be open and what can be closed 

Apple has a clear idea about the strategy of the business that which part of strategies will be
opened or will be closed which is heavily depend on in which process the company will take to
produce the items. Ducker (2015) said that it is not possible to open up the total production
process and related information by opening the plans, sources and other innovation related to the
production process. It is also not a big deal as the company can provide information about their
properties also. Moreover, it is effective for Apple to make the innovation process stronger than
previous Apple has to determine the open innovation due to ensure effective research on the
outside market and ensure the production of innovative and creative products for the customers
(Apple Annual Report, 2018). On the other hand; Apple has to determine close innovation for
identifying the lacking of the internal parties and arrange several training and other facilities for
individuals, scientists or employees ensure close innovation of the firm.

Open innovation makes the pie of creative ideas for Apple to grow bigger 
According to Bock and Hellhammer (2018), innovation is really necessary for a company to
establish themselves in the market. Apple has applied incremental innovation strategy for
generating good position in the market. The incremental innovation strategy helps Apple to
analyze the internal and external situation of the firm and take decision to add some value with
the products according to customer’s demand. It is very much commercially benefitted for any
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company. Apply has collected many creative ideas by applying the open innovative process
which helps them to innovate strong technologies for the business. Apple has applied the open

exchange of ideas beyond company boundaries as open innovation process to cover the

market area. Apple has also applied innovation in both inside and outside through

internal and external R&D. It is always effective for the company as it allows them to
introduce new features and functions to their products which will definitely satisfied their
customers. The innovation management finds the highest level of benefits for all the creative
resources and makes them more effective to get success for the company. For example; due to
the innovative features of iphone 11, Apple has gained higher sales amount and profits. Without
innovation management; it is not possible to get higher benefits and growth but apple has to do it
through innovation management.

Both open and closed innovation can be a new business paradigm for Apple 
Bock and Hellhammer (2018) mentioned the importance of both open and closed innovation
process to the business strategy of a company. Open innovation is dependent on the innovation
of new technologies to introduce or produce new products in the most effective ways. On the
other side, closed innovation does not have any relation with the new innovation of technologies
as it gives its focus on using the sources and talents of the company. Apple mainly depends on
the open innovation process for its items. Apple tries to develop the marginally incremental
technologies also besides the revolutionary and disruptive incremental technologies Apple has
used quality incremental technologies by which this company added value with the iphone 11
like good camera features, high resolutions, Exmor-RS CMOS Sensor, autofocus and high
software and hardware facility. Apple has applied disruptive innovation by applying new
technology with the company’s current market. In addition; Apple has applied
revolutionary process of innovation for long periods due to change in major features of
Smartphone and other products (Apple Annual Report, 2018).

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Impact of different factors on the Apple’s approach to external innovation and
competition
In the setting of approach; a firm has to consider the several issues and external innovation as
well as competition. Apple has to deal with these
factors to implement the external innovations
perfectly. For example; Apple has produced its
products on the basis of demand conditions and
factor conditions. Demand condition and factor
condition are properly considered by Apple before
producing their products including smart phones,
computers and others.

Factor condition: Apple arrived at the $1 trillion dollars success according to the market cap.
The apple is the firstest ever U.S company that got the $1 trillion company. Currently apple is
operating in a group of host countries. As it operating in number of host countries it has
competitive advantages compared to its competitors. As the production cost is low in these
countries it can produce mass product with low cost.

Demand condition: In this 21st century, customers are focused on the technological
advancement. Consumers demand greater level of technology based mobile. Apple focuses on
the innovation of new technologies for their consumers according to their demand. According to
the demand of the consumers the company developed a group of products such as phones,
computers, watching online payment to music streaming.

Related and supporting industry: The success of the company is dependent on different things
which is mainly supporting industries. The supporting industries include online payment, music
streaming and wearable technology. In the competition of the industries apple offers different
products for their customers.

Firm strategy, structure and rivalry: In recent year; Apple has developed its firm’s strategy,
structure and rivalry and forecasted the market position as well as developed the marketing
strategy and changed the organizational structure for establishing better position in the market.

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Apple has a competitive advantage as is has unique strategy, structure and rivalry. It has a group
of products of hardware and software. Apple has a retail offering product which also gives the
company a competitive advantage.

Government: Apple has several barriers in the international market due to government
interventions as well as several chances in the global market. Apple has set up its approach to
maintain external innovation and competition level by complying the rules and laws of the global
market and taken the chance of the market for better innovative and creative products and
services.

The government regulations sometimes restrict the companies operating in the long run. Apple

create a range of products based on the consideration of the consumers. The company follows

different rules of the government in different countries.

3.0 Internationalization, Localization and Competitiveness

Wit, Jones and Jooste (2016) said that Internationalization is the process through which products
are designed for the international market which indicates the product is developed in such way so
that it can meet the demand of the various customers of different countries of the world.
Internationalization has great importance to make relationships and develop respects among the
countries through sharing the different products. The companies can gain more profits and strong
their economic sector with the internationalization of their products. For example; Apple can
cover the Asian and African market that increases the selling amount and profits. Employment is
a big advantage as internationalization manages employment for many people all over the world.
Internationalization also has some disadvantages. It can create discrimination among the people.
Sometimes company falls in a huge problem as it does not have enough resources to provide the
products or to maintain the manufacturing process of them. So, they cannot expand their
products in large scale in the international market (Coelen and Grible 2019). For example; if
sudden demand is increased in Asian market, Apple is not able to produce a lot immediately due
shortage of production factors that make barrier to expand their products.

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According to Hoekstra (2017), localization is the process of developing a specific product for a
specific market which is termed as the local market of that product. In this process, the company
has to develop a fixed type of product for the targeted market. They have prepared all their
strategies according to that. According to Buckley and Ghauri (2015), Localization plays vital
role as it can build up certain type of labor for a specific market. Those labors are being well
trained for that which is beneficial for their working lives. It is advantageous in a case that it will
improve the financial sector of that area as banks and other financial organization can be built up
according to the market. The transportation has been formed in new way which can develop the
communication sector of that particular area. The products can make that locality popular to the
other people. This will also help to the growth of the industries in that area. The market area,
number of customers and profitability can be grown due to localization effect
Apple focuses on internationalization of its products by introducing its products in different hold
countries. It also localizes its products by producing the products according to the demands of
the consumers.

At last, the localization of the product can bring prosper of that area in every possible way
Localization of the products of the company improves the area economically and
improves the living standard of the people of the area. Accoding to the localization the
company produces products according to the demand of that area and sells them to the
people of that area.

There are also some risks of the localization as the main industry can fall into some problems
with the localization. For example, Quality risk is attached with the localization and also lack of
direct control, lack optimal localization skills and lack of strategic coordination are also
considered as localization risk.

The companies should consider about the cost strategy as it should be affordable to

the consumers of the products. It’s a matter of regret that apple is not the leading

company in this area. Apple is not luxurious to its competitors in cost structure. The

largest competitor of apple is dell and whose greatest strength is to drive down the

cost of the products.

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Apple has considered the factors relating with cost leadership or product differentiation strategy.
Apple should give concentration on the cost leadership strategy because their product’s price is
relatively high than the competitors. For this reason; apple should use their internal raw materials
and technologies to produce quality products and offer to customers with lower and reasonable
price. In addition; the combination of cost leadership or product differentiation strategy has great
outcomes on the profitability and growth of Apple.
As apple fails to its cost strategy it able to retain the market by implementing the differentiation
product strategy. Its pride in on the innovation of the new customer driven products which makes
the company one of the most influential company in the world to capture the market. its
differentiation strategy includes several products such as personal computer lines ;Power
Macintosh, iMac MacMini, Power Book, the introduction of the iPod digital music player,
PowerMac G5 the iTunes music site, more applications such as the iDVD, iPhoto, iMovies,
iBook; the Apple cellular phone- iPhone.

4.0 Organizational Purpose, Profitability and Social Responsibility Corporate

profitability

Apple is recognized as a profitable company which always tries to gain profit by making money
for the shareholders. This is the purpose or end goal of the company. They have prepared all the
strategies and are working according to those strategies to achieve that purpose. They are very
careful about the legal factor as the company do all the activities according to the rules and
regulations related to that particular project. The company maintains a specific policy as they do
not compromise with the profit for another goal or target . The apple should use strategic pricing
and marketing policy for maximizing the profits. They always try to make the innovation of
products with new designs, features and functions. They want to ensure that the customers are
satisfied with their products. The excellent function of their products is able to create massive
brand and customer loyalty and have a great reputation for the company.

Apple is able to earn enough money which allows them to grab all the opportunities target. The
opportunities include the market opportunity, product opportunity, customer’s attraction
opportunity, and technological opportunity.  It is beneficial for them as it helps them not to incur
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any tax cost. They can able to overcome all the difficulties as they have maintained a strong
capital structure. Apple has made a perfect plan to use these to perfect implementation of the
debt of the company. Apple always gives their focus on to gain the trust of their customers in
which plays a vital role. For example; when apple gains the on the customers’ trust, it increases
the customers’ attraction and loyalty of the customers. They have also taken some special steps
to make new investors for their company. They want to make all kinds of investors like
Universal Investors, Social Investors and Rational Investors which may also helpful for them to
seek returns the benefit to the society (Abuaf, 2016). For example, universal investors are the all
potential investors in the universe, social investors are investing for earnign both profits and
social/environmental welfare and rational investors invest by considering risk factors and rational
attitude for gaining.

Corporate social responsibility

According to Chen (2019), corporate social responsibility (CSR) is a kind of business model that
makes a company accountable to the society, to the stakeholders and to the customers. It is also
termed as the corporate citizenship. CSR defines what kind of impact a company exactly has to
the people of a particular society. Apple has managed the standard corporate uses of cash. The
transaction, precautionary and risk management process of the company are well planned as they
can face any kind of difficulty any time. Apple has introduced Triple Bottom Line (TBL) system
which increases the transparency of the company and makes the decision making easier. With
the field of e-mental health Apple has essentially been addressing issues related to people’s
mood, depression and stress. It is easy to see the connection here for the purpose Apple, as a
business, to not only be seen as a company looking to increase profit regardless of how it was
earned but also as a socially responsible company. Apple has taken necessary initiatives to stop
the destruction of natural resources. They have prepared their production process so that it must
not have any negative effect to the environment (Roy and Mitra, 2015). Apple also has their
concern about the health issues as they know strong health of the worker will make the financial
growth of the company. The company has maintained the growth largely from the e-mental
health sector. Corporate Social Responsibility is a kind of strategic management tool for Apple

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which helps to increase the engagement of both the employees and the stakeholders to the
company.

5.0 Personal reflection on learning

Apple is a big and international company that has strong brand image in the global market. From
this assignment; it has been understood that the main importance of innovation especially for the
technology based company like Apple. It has noticed that the combination of open and close
innovation has great impact on the success Apple. Both the internal and external innovation is
required for apple to ensure its internationalization, localization, and attain the purpose and CSR
activities. For this reason; the senior management and leadership should create a participative
environment within the firm for ensuring better innovative environment as well as maximizing
profits through satisfying the stakeholder. In addition; Apple should use digital platform and
innovate new and attractive innovation technologies for developing marketing area and
profitability. From this paper; it has also noticed that internationalization has great importance to
make relationships and develop respects among the countries through sharing the different
products and also localization plays vital role as it can build up certain type of labor for a specific
market. For this reason; the senior management and leadership should take actions to establish
the brand image of Apple in both international and local area for attaining the corporate goals.

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6.0 Conclusion
In modern day, internationalization of the products and the cause of globalization, people can
find any of their desired products anywhere in the world very easily. The companies have
developed the economic sectors largely with help of these factors. The companies find different
types of customers of different countries with different types of choices. So, they need to add
different features and functions and also design their products in new forms to make those
attractive for their customers. Apple has done all these things to fulfill the demand of their
customers and make them satisfied in every possible way. The company has taken the smart
decision of the internationalization of their products as they have done this according to the
innovation of the company how much the company has technically advanced. Apple has
overcome all the difficulties very successfully in the recent years and become one of the largest
technological companies of the world.

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Reference
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