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Introduction

Weve selected Apple Inc as our chosen organization for this assignment. The main

reason that we have chosen Apple Inc is because we are interested in knowing how

Apple, a top IT firm in the world enter one of the most IT-inclined countries which isJapan.

Apple Inc is an American multinational corporation that produces consumer electronics,

personal computers, computer operating system and software. Apple's core product

lines include the Macintosh line of computers, the iPod portable music players, the iPad

tablet and the iPhone smartphone. For its software category, Apple has the Mac OS X

computer operating system, iOS operating system, the iTunes media browser and the

Safari web browser. The Apple founders, Steve Jobs and Steve Wozniak created the

company which was known then as Apple Computer. Apple Computer launched its very

first product, the Apple I on 1st April 1976 and the headquarters is located at Cupertino,

California.

Apple was predominantly a manufacturer of personal computers for more than two

decades but during the 1990s, the company faced rocky sales and low market share.

Steve Jobs returned to Apple in 1996 after been ousted in 1985, because his company

NeXT was bought by Apple during that period. After his comeback, he instilled a wholenew corporate philosophy of recognizable products and simple design. In 1998, Apple

returned to profitability and unveiled the iMac, a blue-and-white computer and led Apple

on the path to its comeback. Apple also discontinued the Newton, a hand-held, pen-

based computer.

In 2000, Apple removed the "interim" label from Jobs' CEO title. With the successful

launches of the iPod music player in 2001 and the iTunes Music Store in 2003, Apple

established itself as a leader in the consumer electronics and media sales industries.Apple then dropped the Computer from the company name in 2007 following the

release of its world-famous iPhone. As of September 2012, there were 250 active Apple

Stores in the U.S. compared to 140 stores scattered at international locations. The

company has plans to replicate its 2012s growth by opening an additional 30 to 35

stores during the 2013 fiscal year. (Campbell, 2012)

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Based on Kelley, Stampler, & Labin (2012), Apple is placed at second place for the

most valuable brand in the world with a value of $76.6 billion, which showed an increase

of 129 percent from 2011. Apple was also named by the Fortune magazine as the most

admired company in the world from 2008 to 2012 for computer industry consecutively.

Apple is also the largest publicly traded corporation with an estimated value of US$626

billion as of September 2012, which is larger than the combination of both Google and

Microsoft. Apples three year financial history shows that worldwide annual revenue in

2010 was US$65,255 billion, growing to US$108,249 billion in 2011 and US$ 156,508

billion in 2012. These figures show thatApples annual revenue has yet to decrease and

is most likely to continue rising.

Entry Modes

Apple initially entered Japan using a non-equity mode which is by indirect exports.

Apple engaged Toray in 1978 to be its main distributor of its new Apple II computer. It

was reasonable for Apples entry into Japan by having indirect exports. This was

because Apple would not need to directly handle export processes which might be

costly. However, Apple lost out on the ability to learn how to operate in Japan. Then, in

1983, Apple decided to have its own subsidiary in Japan, aptly named Apple Japan.Apple gained full control over its operations in Japan such as distribution and marketing.

Issues/Problems with Global Strategy

Localization

Entering Japan was no easy task for Apple. When Apple initially contracted Toray to be

its main distributor, many issues aroused. Insufficient distribution of non-localized Apple

products that are sold at extremely high prices discouraged Japanese consumers from

purchasing. Apple at that time had also a considerable level of corporate arrogance

which had further detriment the situation. Computer parts were not partly made in Japan

which cost the products prices to skyrocket. The Japanese language is comparatively

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more complicated than the English languages. There are multiple strokes to each

character or letter that have different meanings. To translate each word of every

software and instructions would not be cost-effective and cost-efficient. Moreover, there

is also the issue of accuracy of the translation.

Environmental disasters

Being in a country which has ten percent of the worlds active volcanoes, Apple had to

take precautions against these environmental disasters such as hurricanes and Japans

infamous earthquakes. In 2011, Apples supply chain was affected when an earthquake

struck Japan. Apples Japanese suppliers such as Mitsubishi Gas Chemical and

Toshiba had to temporarily shut down their factories to assess the damage caused by

the earthquake. This catastrophe had caused component delays and subsequently

supplies problems of the iPhone 4 and iPad 2. (Frommer, 2011)

Education Market

Apple has always been strongly focused on the consumer and education markets.

Apple has been very successful in the educational market of various countries. However,

Apples penetration in the Japanese educational market failed to replicate its previous

successes. There are a few factors that has contributed to this phenomenon. Firstly, the

Japanese government has a heavy influence over the countrys education system as

public schools are directly funded and directed by the government. This may hinder the

interest of computers in students as computers might not be a necessity to education.

Besides that, the Western thinking about computers is that students should learn

through or using computers. However, the Japanese way of thinking of computers in the

education system is that students are to learn about them. Many Japanese students can

actually program a computer but not being able to fully utilize a computer. Furthermore,

when computers were being used, 80% of the schools computers are linked together

through the use of very sophisticated and expensive networks. This is disadvantageous

to students as teachers have almost total control over the functions of every machine,

thus hindering creativity. (Kouyoumdjian, 1994)

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Direct Support

Apple made a huge mistake when entering Japan. Direct hardware and software

support for Apples products were not fully provided in Japan. For those who were

experiencing problems such as business users, who made up 60% of Apple purchasersin Japan, could not have access to services such as the subscription-based Apple

Helpline which was available in most countries. Apples Japanese customers who

bought the Performa series were subjected to a full year of toll-free support, but the

same could not be said for the other models. They were told request support from either

the retailer or the dealer who had sold them the computers. To make matters worse,

most retailers at that time had no knowledge of English system software or applications.

This was a problem when business users needed to use English software for their daily

operations.

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References

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Apple. (2012). Retrieved March 14, 2013, from Interband:

http://www.interbrand.com/en/best-global-brands/2012/Apple

Apple Chart . (2012). Retrieved March 13, 2013, from ycharts.com:

http://ycharts.com/companies/AAPL/chart#series=type%3Acompany%2Cid%3AAAPL%

2Ccalc%3Amarket_cap&format=real&recessions=false&zoom=1&startDate=&endDate=

APPLE THREE-YEAR FINANCIAL HISTORY. (n.d.). Retrieved March 13, 2013, from

http://files.shareholder.com:

http://files.shareholder.com/downloads/AAPL/2356041872x0x444195/E7A8FE5F-8835-

46AB-ACC2-6FA28DFB546D/Three_Yr_Financial_History.pdf

Campbell, M. (2012).Apple to open up to 35 new retail stores in 2013. Retrieved March

13, 2013, from appleinsider.com: http://appleinsider.com/articles/12/10/31/up-to-35-

new-apple-stores-set-to-open-in-2013

Kelley, M., Stampler, L., & Labin, G. (2012). The 20 Most Valuable Brands In The World.

Retrieved March 13, 2013, from Business Insider:

http://www.businessinsider.com/most-valuable-brands-in-the-world-2012-10?op=1

Oppenheimer, P. (2012).Apple Inc. Retrieved March 13, 2013, from U.S Securities and

Exchange Commission:

http://www.sec.gov/Archives/edgar/data/320193/000119312512444068/d411355d10k.htm

Steve Jobs At Apple: A History. (2011). Retrieved March 13, 2013, from The Huffington

Post: http://www.huffingtonpost.com/2011/08/25/steve-jobs-at-apple-a-

history_n_936027.html

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WORLD'S MOST ADMIRED COMPANIES. (n.d.). Retrieved March 13, 2013, from CNN

Money: http://money.cnn.com/magazines/fortune/mostadmired/2011/champions/