International Business Strategy for Apple Essay

3694 Words Oct 14th, 2015 15 Pages
International Business Strategy II


Liu Shu



Google and Apple are giants in technology industry. These two companies provide innovate products or service and have unique organizational structure and culture. Under the increasing pressure of cost reduction and local responsiveness caused by globalization development, both Google and Apple are transforming into transnational organizations. This report will critically evaluate the comparative transnational effectiveness of Google and Apple in terms of motivation means and mentalities, layers of competitiveness, across boundaries management and corporation social responsiveness (CSR).


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Due to the growing competition, many western countries have turned to low-cost countries. In this case, outsourcing all its production to countries with low material and labor cost can boost its bargaining power.

3.1.2 Scale Economies

Apple is benefited from the cost advantage brought by scale economies, which helps the firm reduce costs by spreading the fixed costs over large amounts of production and downward moving in the learning curve. Apple reaches scale economies since it has large volume of sales. According to Bora (2014), iPhone’s sales in 2014 Quarter 3 reached 12% market share, which is quite large comparing with Xiaomi’s 5.3% and Lenovo’s 5.2%. Google, on the contrast, focuses on the software and does not enjoy the scale economies.

3.1.3 Scope Economies

Also, the efficiency can be improved by scope economies. Firstly, Google’s infrastructure could offer additional services at a relatively low cost. According to Schonfeld (2008), their more than 36 data centers worldwide allow Google to diversify its operations. For example, the cost of Google scholar is low because of the existing data server. Secondly, Google hires talented engineers and has an open-source organizational culture, which could lower its costs of R&D, as the human resources can be shared among products. Apple also enjoys the cost reduction brought by scope economies. For example, most Apple’s products target similar consumer groups, so the marketing cost can be

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