What is the ideal future?

What is the ideal future?

Apple’s unique vision is guided by the success made by the Iphone in the market. The preliminary findings indicate that the company is ready to follow the Iphone example. The fact that it has hired the top engineers in the industry shows that this option is top of the table for the company. Currently, the Iphone has altered the Smartphone market (Apple.com, 2020). The company sales have overtaken the original industry players while pushing some out of the market. Despite the premium pricing model, everyone desires to have an apple product. The Iphone model proves that with enough research and the creation of a unique product. There is a ready market.  Based on the Iphone model, the company has a solid ground to invest in research (Apple.com, 2020). The approach will also help determine the weakness of the current players and leverage on them. With such a move, it is possible to bring in a superb product on the market.

The second option that the company has is the use of contract manufacturers. They are ideal as they will bring down the cost of operations and help meet the target (Lak, 2017). However, the company is more focused on quality vs. quantity. The premium pricing approach calls for little errors from the manufacturers. If the company opts to go the contracts manufacturing way, it has to ensure that standards are set that the manufacturers have to meet before they can work for it. Contract manufacturing also poses the challenge of sustainability. The company gives a top priority to sustainability and the supply chain value process (Lak, 2017). With the contract manufacturing option, the company will have to follow up with the suppliers to see that they meet the standards set by the company. The alternative is thus off the shelf for the company.

The company currently leads globally in cash reserves; this means that it is in a position to purchase any significant player in the industry (Apple.com, 2020). The current leaders in the EVs market are Tesla, Volkswagen, Nissan, and Geely. Apart from Tesla, the other producers have ICE divisions that produce conventional vehicles. Thereof, besides opening up an entirely new factory, the company may opt to purchase an electric division of any major player or buy Tesla. Acquiring Tesla may not be a viable option as it promises to be a significant competitor of the iCar. The prospect of purchasing an electric division from other players may also not be feasible as much more will have to be done to meet the standards set by the producer. While it is an easy way out, it may be expensive to run in the future

Apple Inc has an end goal of being the transport mode of the future; strategies are therefore in place to see that the goal is attained. Apple cars will have a premium price. With the danger that government incentives and subsidies are likely to reduce overtime, the company may opt to change how the industry operates. Ridesharing will be a transport mode of the future (Li et al., 2018). In such a scenario, the company will be able to provide service to the clients desiring to have a taste of the unique service offered by the company.

Strategic Opportunities for Growth

The market has significantly changed the creation of trading bloc’s means that the company can try out its operations in such a bloc before trying them in other regional blocs. Currently, the EU and BRIC promise a fertile ground where the company can leverage on its operations. From the findings, it is evident that 95% of small car sales in 2015 originated from emerging markets (Ortiz-Ospina, 2017). There is a possibility that despite emerging markets being ignored for long, especially in technology, they may provide an ideal alternative if a product is customized for them. For instance, the premium vehicle may be made for the first world nations while similar is made for the emerging markets. With the current trends in the market, the company may easily get locked out of the emerging markets due to its pricing policy.

While the company may not fully embrace alliances, it may opt for strategic partnerships that help it achieve short term goals. For instance, to create a fully autonomous vehicle, it needs loads of data that will help create the decision-making algorithm (Li et al. 2018). The company may partner with an existing player where software to collect and analyze the data will be installed. Through such an alliance, it will be possible to create an intelligent system free from faults.

Capital diffusion may not be an immediate challenge for the company. However, there is a risk due to the dynamic nature of the market. The concept of EV is much simple compared to that of ICEs (Ford.com, 2020). Therefore, nations may develop their own EVs basing their production on the benefits accrued by globalization. In EVs production, complex functions like full autonomy may be left out. It is, therefore, essential if the company takes into consideration the impact of capital diffusion. From figure 1, it is evident that producers preferred to produce in the southern states as it was cheaper doing so there. Apple Inc has the option of using blocs that promise reduced production cost.

The concept of wages proves to be a challenge for producers. In-vehicle manufacture, human factors take a significant toll on the production process. The reason why many companies are outsourcing production to China is due to the low cost of production and the available labor force and training level of the workers. To get trained workers who can do the job, the cost is high. A comparison between German and the US indicates that Germany has higher wages compared to the United States. However, the quality and reputation of German machines validate the cost.

From figure 2 provided by Country Economy (2018), it is evident that the wages in Germany have been higher compared to the united states for the past ten years. They have also been relatively stable around $60000 per year, while those in the United States have consistently risen over the past decade. In China, average hourly wages are the lowest being at $1.36 per hour (Kavoussi, 2017). The low wages probably explains why outsourcing is mainly done in china. Apple Inc has the option of taking its mass production into china to enjoy the benefits associated with the production.

The option of product localization may not be viable for the company. Product location calls for the production and outsourcing to be done in Africa or Southeast Asian nations. From figure 7, the trade volumes from the entire African continent are surpassed by Vietnam. The statistics indicate that even though the region is an ideal place to outsource, it is difficult for the company to generate the required trade volumes from the area. The low volume capacity may hinder trade and operations of the company.

Conclusion

From the discussion, the essential takeaways area available for Apple’s iCar. While the industrial players such as Ford, Tesla, and Toyota have curved a substantial share of the market for themselves, it is evident that it is still possible to create a list of customers from the available pool. The EV market is not entirely new; however, it is not fully explored. The current players such as BMW, Toyota, and Ford have been slow in embracing EVs as they already have an established market for their ICEs. Meanwhile, Tesla has been at the forefront of producing EVs, and it has already created a reputation in the vehicle market. The short period that Tesla has been in the market proves that consumers are ready to embrace the EVs as the future mode of transportation. Apple is up to the challenge.

With the presence of the market, Apple’s globalization will be driven by four factors. The product that they intend to sell into the market, just like Tesla, Apple is bound to succeed based on the reputation and the promise of a superior product to the consumers. With globalization, the Price of the product ought to be within reach. The possibility of taking advantage of the global market will see more customers fall into the price range of the vehicle. The place of manufacture will also aid vehicle production. Toyota outsources the equipment from cheaper places while the assembly is done in the leading factories. American equipment manufacturers shifted their production to southern states to take advantage of the low production cost. The place of production is also essential for Apple’s car to see that it can quickly meet the needs of the customer.

With globalization, more chances are open for the company. The success of the promotion is based on product quality. Just like Toyota was able to enter and dominate the American market due to superior products, Apple may also successfully get a share of the American market. he same may happen when the company is in a position to produce and sell its products. However, the focus should be on meeting immediate customer’s needs with more emphasis on long term goals.