Foreign Market Entry and Diversification

Foreign Market Entry and Diversification

Introduction to Company

Apple Inc. is engaged in offering a portfolio of products that is comprised of Mac computer systems, iPods, music and video players, Iphones, and Ipads. The company mainly designs, manufactures, and markets wide range of personal computers, mobile devices, and music players and has been successful in it. It is also engaged in selling some software, services, associated devices and networking solutions. The products offered by the company are divided into eight segments. The company's operations are expanded in America, Japan, Europe, and Asia.

Introduction

Firms expand operations by adding products, markets, stages of production and services to the current portfolio. These strategies through which firms expand are called diversification strategies. The objective of diversifying is to enter into new businesses or market in order to achieve better business results. Concentric diversification means that the company has extended business in the existing line of operations. On the other hand, when the new added business is not related to the current line of business, it is said Conglomerate diversification. In Conglomerate diversification, there is a strategic fit between new and old businesses (Marlin, 2005).

The goal of concentric diversification is to achieve a strategic fit by adding related services or products. Synergy results if a company finds correct strategic fit. Financial synergy may be attained by adding a firm with goof financial wealth but restricted growth opportunities with a company having vast market prospective but fragile financial reserves (Hitt, 1997). In conglomerate diversification, synergy is obtained through applying managerial expertise or financial resource, but its primary objective is to enhance profitability of parent firm. Diversification efforts are either external or internal. Diversification strategies can also be categorized by the direction of diversification (Marlin et. al, 2005).

Discussion

Many organizations in the context of the contemporary market have been able to base their success on the aspect of strong forecasting skills. By successfully having highly skilled and experienced personnel in the forecasting teams, Apple has been able to successfully predict the future market trends. While Apple is one of the largest electronics dealers on earth in terms of revenue, being a manufacturer for the company is a sometimes volatile proposition.

Apple has moved from a being a computer company to being a successful consumer brand. It has experienced immense growth over the past, and with considerable diversification performed throughout this period, has the potential to further indulge in such activities and diversify even further. This can be easily illustrated by looking at search trends, in this case the overall interest in Apple's various product lines over the years (courtesy of Google Trends).

Strategies and Implications

The diversification strategy is that the company adds new products and simultaneously existing markets. This access to new activities, either by internal or external growth the company does operate in competitive environments, new result is a set of physical and organizational changes affecting the structure of the company and represents a clear break with its past history (Wernerfelt, ...