Apple’s Competitive Strategies and Government Policies
Apple’s Competitive Strategies and Government Policies
The Apple IPhone Company has created quite a name for itself through the creation and sales of the phone that is leading in innovation, technology, and consumer popularity. With many large cell phone competitor companies, such as T-Mobile, Verizon, At&t, and Sprint, the IPhone has managed to continually create a product and service that continues to beat the competitors in technology and innovation. The smaller cell phone companies such as Cricket, Metro PCS, and Boost Mobile are able to stay in business only because they sell somewhat of a different marketing strategy, which is a cheaper service plan, with older phones. The Apple IPhone has profited from the recent horizontal merger of T-Mobile, a large cell phone provider, and MetroPCS, a smaller cell phone provider. Two companies made this merger in the same industry that came together in hopes of increasing revenue for both organizations (Investopedia, 2014). The profit that came to Apple Iphone from the merger was increased sales of the IPhone; MetroPCS has access to the unlocked IPhones and can now offer sales to nine million additional consumers that otherwise would not have access through MetroPCS (AppleInsider, 2013).
A merger of this type offer other benefits such as “infrastructure and branding strength,” for the smaller organization, and creates stronger competition for other large cell phone providers as well (Yglesias, 2013). This competition will force other companies to create new service plans with reduced rates and better services in order to continue to remain successful in the industry. This will in-turn push prices down for consumers and level the playing field. The Apple IPhone Company participates in globalization through contracting the manufacturing of the IPhone product through a company named Foxconn Technologies, which is located in Western China. Foxconn creates more than forty percent of the US electronics, and employs around 120,000 workers twenty-four hours a day seven days a week. Many employees work six days a week with harsh working conditions that require fast pace and high pressure from the employees leading to high turnover rates (Dihigg & Barboza, 2012). Despite the harsh working environment, through globalization Apple is able to help other countries develop faster by providing employment opportunities for areas that would otherwise not have any. This also allows Apple to reduce cost of production creating a higher profit margin and sustainability rates for the organization as a whole (Investopedia, 2014).
Government Policies and Regulations
The cell phone industries have to follow government policies and regulations. The U.S. Food and Drug Administration have the authority to regulate how much a cell phone emits radiofrequency energy. If a cell phone device releases too much radiofrequency energy the U.S. Food and Drug Administration can have the company recall all the cell phones and repair or replace them. Someone can live near or under a cell phone base and receive the radiofrequency energy into their body this needs to be monitored at all time. U.S. Food and Drug Administration shares responsibility with the Federal Communication Commission to be sure that all phones sold in the United States meets the requirements. The Federal Communication Commission also regulates the base tower of the cell phones. A third party can be injured by someone answering their cell phone while driving and if that call is from a telemarketer that can be very bad. Telemarketers once only called your home phone, now they are given access to our cell phone numbers.
The National Do Not Call Registry has thirty-one days from the date of request to remove your phone number from the telemarketing list. The Federal Trade Commission manages the National Do Not Call Registry. If a company does not stop calling they can be subject to up to a $16,000 fine. We all have been told that texting or sending an email while driving can be deadly to the driver, to the passengers and to an innocent third party in another vehicle. Many states are adopting laws and penalties that can range from $50 to $400 depending how many times the drivers violates the law. A young driver will have their licenses suspended the first time or revoked if it happens a second time. A commercial driver cannot use a cell phone inside a vehicle that the engine is running. Not all states these laws based around cell phones and driving yet, but laws are expected to be in all fifty states as the state sees it necessary. More and more people use their cell phones to store and receive business information. Many people misplace and or lose their cell phone with sensitive information stored in the device. American Recovery and Reinvestment Act (ARRA) of 2009 [Stimulus Act] will soon want any cell phones used for business to be notified when a breach as happened. Competition;
Rules and Regulations
Apple Inc. is one of the leading companies in the communication market and because of the rapid growth in technology the global competition is very tight. Telecommunications, globalization, technology, the Internet, and e-commerce have an increased amount of change. Due to this increase companies need to keep up and make changes in their technology, which also means they need to increase their supply, relations, labor, rules and regulations within the company to maintain their competitiveness within the market. Consumers are always looking for the newest technology when it comes to their cell phones, laptops, tablets, and computers. It is imperative for any company that wants to maintain a competitive edge in the market to offer better, faster, and newer products. They must also be willing to maintain service to their existing products as well.
Management must make changes within their devices as well as the service they provide. For the company to be successful the management team must keep strong relations within the company as well as the consumers of the product as well. The individuals purchasing their devices need to be sure that they are receiving the highest quality product and also want the validation that if there is a problem with their device that Apple will be able to fix the problem. The levels of management, support staff, customer service, sales, and technical support must be able to meet the supply and demand while remaining cost effective.
While most of the labor for manufacturing Apple products is outsourced to other countries; this is done because they can produce the product at a cheaper rate then they would be able to if it was manufactured within the U.S. Due to the outsourcing of work being done outside the U.S. there is a need to have a union representation for the labor that is being done in other countries. The company needs to ensure that they create policies, rules, and procedures for the company’s employees both within and outside the U.S. Management team needs to make sure they are protecting their employee’s rights both within and outside the U.S. while maintaining their fairness to all employed and still able to create a product that is cost efficient and of the highest quality.
Apple iPhone merger with T-Mobile is profitable. The merger allows the iPhone to control a large part of the cell phone market. New companies entering the cell phone market must compete with the iPhone on a level of having cheaper rates. Entering a oligopoly market structure is difficult. The merger of Apple iPhone and T-Mobile may lead to other mergers of cell phone companies. Creating new technology by Apple will keep them as a front runner in the cell phone industry; continuing to improve on their now popular cell phone product through technological advances.
The popularity of cell phones for more than just calling and sending messages to friends is on the rise. The use of cell phones to conduct business is the lifeline of the businessman or woman on the go. The regulations by the government will still need to be met. Apple in response to government regulations will need to make technological advancements in the safety of their product. The integration of cell phones to the hands free operation of a vehicles radio is one safety step taken. The promoting of not talking and texting while driving must continue and even increase to keep people safe.
To keep up with the demand and the changing technology Apple will need to watch the competition closely. The possibility of future mergers will change the labor market. The outsourcing of Apple using a cheaper labor source helps keep production cost down. In order to maintain a high status in the cell phone industry Apple will need to continue to strive for excellence in the technology advancement. Providing superior products to its customers Apple needs make sure it keeps its employees happy. There are fewer unions today compared to years past. This shows that companies are becoming better at providing for its employees. This will need to continue in order for Apple to stay competitive.
AppleInsider. (2013, May 1). T-Mobile, MetroPCS Officially Merge, Bringing IPhone to 9M More in US. Retrieved from http://www.slate.com/articles/business/moneybox/2013/03/t_mobile_metropcs_merger_it_would_force_at_t_and_verizon_to_improve.html Dihigg, C. (Interviewer)., & Barboza, D. (Speaker). (2012, January 26). In China, Human Costs are Built into an IPad [Video podcast]. Retrieved from http://www.nytimes.com/interactive/business/ieconomy.html?_r=0 Federal Trade Commission. (2009). Retrieved from http://www.consumer.ftc.gov/articles/0108-national-do-not-call-registry Investopedia. (2014). Globalization. Retrieved from http://www.investopedia.com/terms/g/globalization.asp Investopedia. (2014). Horizontal Merger. Retrieved from http://www.investopedia.com/terms/h/horizontalmerger.asp TechTarget. (2003-2014). Retrieved from http://searchmobilecomputing.techtarget.com/news/1368978/Ensuring-mobile-data-protection-for-smartphones-is-critical Yglesias, M. (2013, March 28). The Cell Phone Merger America Needs. Retrieved from http://www.slate.com/articles/business/moneybox/2013/03/t_mobile_metropcs_merger_it_would_force_at_t_and_verizon_to_improve.html