Running head: PORTFOLIO PROJECT-APPLE COMPANY 1
Apple Company
American Public University
BUSN601
January 18, 2018
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Introduction
I chose Apple Inc. for this project because they are one of the most innovative technology
companies worldwide. From Macintosh computers to the iPhone X, Apple has changed the way
people communicate with their ever-changing products and services. Operating out of three
major countries (i.e., United States, United Kingdom, and China) Apple’s constant growth and
development can be attributed to its state-of-the-art designs. This allows Apple to remain one of
the top producing technological businesses globally. As technology continues to advance, so will
Apple’s expansion.
Foundations of Global Business
Apple, Inc., was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne, in
Cupertino, California, in 1976. Apple is one of the largest software, computer, and electronics
manufacturer’s worldwide. Apple is considered the most valuable company in the world, with
over 499 stores in 17 countries worldwide (Rawlinson, 2017). The United States, the United
Kingdom, and China are three of the major companies Apple operates both domestically and
internationally producing a variety of goods and services such as iPhones, MacBook Pros, Mac
Computers, iPods, iCloud, iTunes, Apple Music, Apple Store, and the iWatch. Apple has one-
size fits all approach and the products are the same no matter the country or region.
Each of the three listed countries are members of the IMF, WTO, and the World Bank,
which all actively follow the guidelines expressed therein and has ensured that they act in
accordance with the regulations. According to the World Bank, “The United States was a leading
force in the establishment of the World Bank in 1944 and remains the largest shareholder of the
World Bank today” (“United States”, 2017). The WTO (which operates under a system of
multilateral trade liberalization) is a good route for Apple to follow because the company is able
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to have mass products produced internationally at a lower cost, which also allows for consumers
to pay lower rates. However, the WTO does face challenges; one being that it is “losing its role
as the primary vehicle for liberalizing trade” (Meltzer et al., 2011).
Although the three countries are on board with globalization, they all have different
judiciary systems. For example, the UK has separated jurisdictions, whereas, China has a
Supreme People’s Court, and the United States has a Supreme Court. Though not all of the
countries are transparent.
The United States, the UK, and China have procedures concerning governance,
competitive markets, property rights, and corruption that aid in promoting globalization. In
regards to tariff barriers, “the U.S. and Europe have successfully knocked down tariff barriers
while harmonizing business rules between their own markets. According to one EU estimate, the
U.S. and Europe currently have tariff levels averaging about 4% of the price of imported
industrial goods, compared with an average of 27.5% imposed by developing countries” (Nakra,
2006). Having said that, President Donald Trump plans to create a 45% tariff rate on China so
the U.S. will be forced to produce their products in the states as opposed to overseas (Kang,
2016). With the way things are currently being handled by President Trump, this might be a
possibility sooner rather than later.
Apple functions in numerous key trade blocs internationally. “NAFTA (North American
Free Trade Agreement), MERCOSUR and AFTA (ASEAN Free Trade Area) are the three
largest after the EU” (“Trade Blocs”, 2017). Each of these trade blocs encourages free trade thus
permitting diverse organizations to sacrifice compensating the import and export tariffs on
supplies needed to yield a return. Additionally, anyone who plans to do business internationally
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can benefit from proper research and an understanding of the countries cultural diversity. Not
having this knowledge prior to can result in an unsuccessful business exchange.
Global Business Environment
While examining the differences of cultural dimensions between China, the UK, and the
U.S., Hofstede concluded that “Individualism” is of common importance to both the United
Kingdom and the United States, but of low importance to China. According to Hofstede, “in
Individualist societies, people are only supposed to look after themselves and their direct family”
(Hofstede, 2017). In Collectivist societies (China), people belong to “in groups” that take care of
them in exchange for unquestioning loyalty. Long-Term Orientation is where China ranked the
highest, meaning it is a very pragmatic culture to which they adapt from old traditions to new
changes very easily, a solid proclivity to capitalize, and persistence in attaining results (Hofstede,
2017). Having said that, a U.S. manager would need to modify his/her behavior only slightly
because their cultures are very similar in context. Since the major differences between the U.S.
and China are Individualism, Power Distance, and Long-term Orientation, the U.S. would need
to adapt and recognize these cultural dimensions.
China, the UK, and the United States are all considered political risks. For example,
China’s continuous “battle between the country’s central government and the provincial and
local governments over applicable law, and observance or non-observance of it” (“Political
Risk”, n.d.). This means companies that operate out of China are unsure of the rules. “The
concept is captured by the Chinese saying: “The mountains are high and the Emperor is far
away.” (“Political Risk”, n.d.). However, economically, the recent rise in globalization for China
poses no economic risk. Similarly, the United Kingdom and the United States, have both recently
risen to the top of the charts for political risks. Great Britain which was once deemed a politically
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stable country, has proved to be unstable and unpredictable due to elections. Likewise, the U.S.
election of President Donald Trump has caused great uncertainty in the global market. CNBC
stated, “the political risk is not any discrete event in and of itself. It’s the whole idea that if there
is a perceived delay or perceived incremental difficulty on what the market believes is coming.
That’s where confidence is affected. What we’ve shown in our work is when confidence is
affected and starts to turn down, that’s when multiples and stock prices are vulnerable” (Domm,
2017).
Furthermore, Apple operates in both common law and civil law countries. For instance,
the UK and the United States are both common law countries, meaning they operate under
judicial review. China, however, is a civil law country which means codified statues are
