Before Entering North Korea Apple Must Examine Macroeconomic Forces Essay Example

representatives: The company can send these representatives to North Korea to establish business contacts and negotiate deals directly.
- Local representatives: Alternatively, the company can select local agents who will promote its products, seek clients, and conduct negotiations on its behalf.
- Independent local distributors: Another option is for the company to utilize distributors who will purchase its products and resell them in the North Korean market.

Forming a partnership with a foreign counterpart may face difficulties due to cultural differences between the two companies (Child and Faulkner, 2001, p.54). However, this method has certain disadvantages such as requiring more resources in terms of human capital and carrying higher risks. Nonetheless, it offers advantages like increased sales volume.

The text discusses how having better selling information, control of operations in the foreign market, and increased expertise in international business are benefits of this approach.The concept of foreign fabrication as a strategy for companies exporting products to foreign markets is introduced. However, there are situations where it may be challenging or unprofitable for a company to supply its products through domestic production in these markets. Factors such as high transportation expenses for bulky products, preference for local goods and restrictions on entry by foreign market governments, and higher custom levies or quotas that hinder competition with locally produced goods can contribute to this difficulty. Consequently, Apple Inc might need to establish a manufacturing plant in North Korea to produce and sell its products in that country.

According to Michael Porter, a state's ability to compete heavily relies on the advanced capabilities of its industries. These industries gain a competitive advantage through the pressure and competition they face from leading companies worldwide.

The cultural aspect, guiding values, and economic systems of a country also contribute to its competitive advantage. For Apple to gain a competitive advantage in North Korea, it must master these aspects and leverage them towards its competitiveness (Porter, 1988, p. 155).

Foreign manufacturing offers several benefits, such as cheaper production from the local market, government subsidies, and the opportunity to establish strong relationships with local companies and distributors. However, there are also negative aspects. These include the company having to invest significant resources to settle in a foreign market and potential obstacles posed by the local culture hindering the company's operations. Additionally, if the company decides to exit the market, it can be a very expensive process (Rugman, 2005, p. [page number missing]).

Companies should prioritize having a global presence rather than a global strategy. Having a global presence helps companies increase their sales.

Licensing

Licensing can be defined as a foreign selling strategy where a company in one country allows a company in another country to use its manufacturing methods, procedures, brand name, copy rights, technology, and any other expertise provided by the licensor. Many smaller companies are increasingly using this type of agreement (Hitt, Ireland, & Hoskisson, 2009, p. 225).

Licensing is a less risky option for the parent company compared to contract manufacturing. The main difference between the two is that licensing usually lasts for a longer period and gives the local partner more responsibilities. However, licensing is similar to franchising, except that in franchising, the parent company is directly involved in the training and control of the business.

Conclusion: As discussed, there are various foreign market entry strategies available for Apple Inc to enter North Korea.

Each approach has its own risks and responsibilities for Apple Inc. In general, entering a foreign market is a multi-phase process.

Normally a company starts with indirect exporting to assess the performance of its merchandise on the foreign market. If the performance is good, the company then considers more commitment, such as foreign manufacturing. Apple Inc can use various methods for foreign manufacturing, including assembling and licensing. The choice of method depends on the benefits it offers and Apple Inc's desired presence in North Korea.

References

1. Child, J ; A ; Faulkner, D. ( 2001 ) : Strategies of Cooperation: Managing Alliances and Joint Ventures: Oxford University Press.
2. Hill, C.W and Gareth J ( 2009 ) Strategic Management: An Integrated Approach
3. Hitt, M, Ireland, D ; A ; Hoskisson, R: ( 2009 ) : Strategic management: Competitiveness and globalisation: Concepts and Cases. ( 8th ed. ) Transcontinental
4. Numakura, D ( 2010 ) : Korea's electronics industry not making progress: Retrieved on 29/2010 from: hypertext transfer protocol: //www.ventureoutsource.com/contract-manufacturing/outsourcing-offshoring/korean-manufacturing/korea-s-electronics-industry-not-making-progress
5. Porter, M ( 1998 ) : The Competitive Advantage of Nations: Simon and Schuster
6. Rugman, A ( 2005 ) : the regional Multinationals: MNEs and Global strategic Management: Cambridge: 2005.