UGBA 178 UCB Future of Apple in International Markets Essay

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UGBA 178

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UNIVERSITY OF CALIFORNIA, BERKELEY Haas School of Business Midterm Fall 2021 UGBA 178 Midterm Exam #1 Question to Answer: ❖ You are the current CEO of Apple, Tim Cook. Balancing the expectations of shareholders and Apple’s reputation as an innovative and progressive brand, what would your recommendation(s) be to the Apple Board of Directors about the future of the iPhone in international markets outside the United States? Guidelines: ❖ The deliverable will consist of a written document that must be no longer than 3 pages in length, 12-point font, minimum 1-inch margin on all sides, and double spaced. ❖ Each student must individually submit the written document via bCourses by 11:59PM on Friday, October 1. ❖ Make sure you cite any references with a hyperlink. Grading: ❖ The Midterm will be graded on a 100-point scale based on the written document. A total of 100 will be the highest, with 0 being assigned only if a student fails to meet the submission deadline. ❖ The Midterm should be written with the idea that “less is more,” aiming for clear, crisp answers. A discussion of the grading approach follows (scoring rubric is on the next page): 1) An “Excellent” write-up will be well organized structurally, clearly identifies the issue at hand, present a compelling analysis of the case question, and provide a persuasive recommendation. Additionally, the write-up will use succinct, clear language with minimal distractions in formatting and grammatical issues and will read like an effective business brief. 2) A “Very Good” write-up will demonstrate understanding of the case issues and will be organized logically with clear analysis however improvements required in the persuasiveness of the argument and recommendations. 3) A “Fair” write-up will show partial understanding of the case issues and will have room for improvement in how the case structure is organized, the analytical rigor of the argument and the persuasiveness of the recommendation. 4) A “Below Average” write-up will reflect minimal understanding of the case and low effort in the how the case is structured and analyzed along with a recommendation that is not persuasive. UNIVERSITY OF CALIFORNIA, BERKELEY Haas School of Business Midterm Scoring Rubric Category Scores (1-100 Scale with 100 being the highest) Issue Identification: Analysis: Recommendation: Final Score (Average of Category Scores): Midterm Fall 2021 Chen Fang 1 Chen Fang UGBA 178 October 2, 2020 Putting Apple Devices in the Hands of Those Who Need Them Most COVID-19 has drastically changed demand for luxury products and services around the world. Even before the crisis, however, Apple has struggled with selling its products in international markets. As people worldwide face economic challenges as a result of the global pandemic, Apple must now develop a creative approach to respond to shifting dynamics that meet our consumers’ needs. As part of Apple’s Board of Directors, you are in a unique position to help shape the future of our company as we establish sustainable solutions that not only rise to the current challenge, but identify a path for long-term expansion in our international markets. Historically, Apple products have been priced higher in international markets than in the United States. For example, when the iPhone XS was launched in the United Kingdom, the maxed-out version cost $1,760; in the United States, that same device was priced at $1,349. In Brazil, the cost of an iPad is a whopping 140 percent higher than in the United States. Other products in our lineup, including the Apple Watch and MacBook Air, also carry hefty price tags. While taxes make up part of this cost, there is still a stark contrast between domestic and international prices. This discrepancy is largely due to how we have historically priced our devices. In the past, we have priced our products in US dollars without properly taking into account how the strengthening US dollar would affect prices in local currencies. Not only are Apple prices higher in international markets but global incomes are much lower. In 2019, the average yearly income in the United States was $62,850; compare that to Chen Fang 2 India, for example, where the average income that same year was $2,020. In short, many people cannot afford the cost of a device. We have already pledged to re-evaluate the cost of Apple products in international markets and to establish prices that align better with local economies. Still, we must do more. Our devices are an important tool for members of our community to feel connected, safe, and informed. To that end, here are three ways in which I propose to tailor Apple devices to meet the needs of those in our international markets. 1. Simplified Device Offerings We have already made progress in lowering prices in international markets. The iPhone 11, which was released last year at a lower entry price than previous versions, has contributed to Apple’s market growth. Still, this price is prohibitive for billions of people around the world who struggle to make their daily ends meet. While $699 is a lower entry price than other recent iPhone versions, it is still vastly inaccessible for many. I propose that we develop a prototype for a basic iPhone that strips away many of our complex features and capabilities and focuses on communication and security. This iPhone will include calling and texting capabilities, in addition to a camera and basic internet access. While this version will be limited to only a few key applications, all users will have access to important health and safety features, including emergency calling, the flashlight, and the ability to record. This device will be named the iPhone S, which stands for “simplicity”. 2. Enhanced Data Security For users around the world, our devices are an important tool to foster independence and safety. But safety is also important from a data security standpoint. This is especially important in countries with limited freedom of speech. iPad, iPhone, MacBook, and Apple Watch users Chen Fang 3 want to know that the conversations they have and the information they access will be protected and not used or accessed for malign purposes. I propose that all devices that we sell internationally be equipped with special data protection capabilities that will safeguard all conversations and sensitive information shared on user devices. This will apply to all chat applications, such as WhatsApp and Facebook Messenger, as well as to the personal information that users choose to share on these applications. 3. Matching Program Many companies deploy a matching program that donates one product for every product purchased. Warby Parker, Toms, and Bombas Socks are just a few of the many trailblazers who have adopted this model. I propose that we follow suit and donate an iPhone S for each domestic purchase of the newest iPhone or iPad model. We will partner with several philanthropic organizations that serve impoverished communities around the world to give basic iPhones to individuals and families who need them most. This will be funded by increasing the cost of the new iPhones and iPads by 3% for domestic purchases. These donations may make all the difference in the lives of a person who needs a phone to apply for jobs, communicate with family members, or contact the authorities in moments of danger. By implementing these three recommendations, we can increase profitability in our international markets while also giving back to members of the global community who need it most. When Steve Jobs cofounded Apple in 1976, he dreamed of creating a “computer for the rest of us.” Today, we have an opportunity to deliver on that promise and take it one step further by putting Apple devices in the hands of those who previously did not have access to them. By Chen Fang 4 making our devices more accessible and secure and fostering a collective giving culture, we can help individuals around the world weather the current crisis and build a more prosperous future. Chen Fang 5 Work cited https://mashable.com/article/apple-international-iphone-pricing/ https://www.zdnet.com/article/brazil-is-among-the-worlds-most-expensive-countries-to-buy-aniphone/ https://venturebeat.com/2019/01/30/apple-plans-to-cut-some-prices-abroad-but-it-charges-toomuch-everywhere/ https://uk.reuters.com/article/uk-apple-results/apple-services-business-grows-ceo-cook-sayschina-tensions-ease-idUKKCN1PN2WD https://appleinsider.com/articles/20/03/03/apple-iphone-marketshare-growing-amidstcontracting-global-market https://appleinsider.com/inside/iphone-11 https://www.entrepreneur.com/article/197538
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Future of Apple in International Markets.


On September 14th, 2021, we held our annual launch event. On this graceful day, I
spearheaded the introduction of the newly launched iPhone 13 and iPhone 13 mini



Globally, South Korean tech giant Samsung is the dominant smartphone seller with a
22% market share.

Fair Pricing


Since the launch of the phone 11, Apple has made tremendous progress in trying to
bridge the gap for medium- low-end mobile phones

China’s Market problem


China is the largest smartphone manufacturer and consumer in the market. Chinese
brands such a Xiaomi, Vivo, Oppo, and Techno have nearly 40%.

India Market Factor


The latest global smartphone reports project that the smartphone industry in India will
have nearly 601 million users by the end of 2021

Enhanced Technology


With the iPhone name already distinguished in Northern America, the Asian and African
countries offer the next big market share opportunity for the iPhone



The future of Apple Inc and I phone is on the right trajectory


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Future of Apple in International Markets.
On September 14th, 2021, we held our annual launch event. On this graceful day, I
spearheaded the introduction of the newly launched iPhone 13 and iPhone 13 mini. Apple's
latest phone, iPhone 13, introduced breakthrough innovation in camera technology coupled with
a r...


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