Two of the most successful American companies, Apple and Google, attempted to expand their global reach by entering into the Chinese market. Each attained different level of success, for various reasons. You are tasked with advising the VP of Global Marketing of Apple Inc. on the question of what is the best way to enter the Chinese market with their iPhones and iPads. Which of the foreign market entry mode(s) would work best for Apple in China? What would you advise, and why? What lessons could Apple learn from Google's experience in China?
Apple is making huge inroads into China's tech markets, but critics say the company is making unpleasant compromises along the way. The company's Chinese suppliers are accused of disregarding workers' health and safety, and playing fast and loose with labor rules. Local activists say Apple has been sluggish in addressing their concerns.
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Modes of entry into foreign markets
The best way to enter the Chinese markets:
There is a large possibility for the Apple Company to expand due to a large growing market for the iPhone and iPad phones and therefore, a joint venture would be the best long-term strategy for the company to penetrate the Chinese market place. Joint ventures in china can benefit both the Chinese party together with the Apple Company and will help motivate both parties to have a long term strategy (Gross, 1995).
Joint ventures allow foreign companies to avoid quota and tariff issues and also ensure penetration of a larger share of the Chinese market place. It also helps foreign firms to gain more control and focus of product service and distribution in China. Foreign firms can easily see the real need of the end-users by the firm being physically in China and that prices should be more competitive as a result of the local manufacturing (Gross, 1995).
I would advise the company to enter into a joint venture because it enables the company to build relationship with vital contacts. Companies in joint ventures are able to access vital information and business opportunities. A company can also tap newer approach, technology and methods that the company does not have (Educational Articles, ...
The lessons Apple could learn from Google's experience in China.