Tim Cook announces the end of PC era

Tim Cook announces the end of PC era

10th November 2015 – The chief executive officer of Apple Inc. Tim Cook states that there is no need in PCs anymore. He expressed his opinion for The Telegraph newspaper.

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“If you look at the PC now, the question raises itself:  why do you still need it? No really, why would you buy it?” – asks Tim Cook.

He thinks that the new iPad Pro can completely replace laptop and PC by its technical specifications and power. The CEO of Apple believes that when people will start using it, they will conclude that they practically do not need anything else other than their mobile phones.

Nowadays smartphones are reaching the size of iPads and Cook says: “I think if you have a larger smartphone, you might not need an iPad mini”. It has also been mentioned that the company is planning “to create an app or something else” that will provide a general safety for humans.

New 12,9 inch iPad Pro will be available for sale online this Wednesday( 11th November 2015) and in a couple of Apple stores this week.

-ENDS-

This press release was adapted from mail.ru website and translated into English language.
The original article can be found here
For all other inquiries please contact alyona.ziriukina@mail.ru

The internationalization of the small-to-medium sized enterprises (SMEs): motives, barriers and the Uppsala model

1.0 Introduction
The purpose of this paper is to critically examine and discuss the motives and barriers of SMEs going international and its Uppsala model and principles. In today’s fast-changing business environment, internationalisation has become an essential aspect to competitive advantage of enterprises and, meanwhile, the most challenging in realisation and adaptation to changes. In order to understand the key driving factors and major challenges, the term ‘internationalisation’ can be interpreted and defined through many viewpoints. The rest of this paper debates about the Uppsala model’s suitability to internationalisation process of small-to-medium enterprises.
2.0 Internationalisation and SMEs
A number of theorists has described internationalisation “as the process of transforming a domestic marketing management system into an international marketing management system over time.” (Clarke and Wilson, 2009, p.8) It is further assumed that internationalisation takes the form of the internal management strategy that creates the firm’s structures and operational processes in order to adapt to the international environment and to expand beyond the local market. Lots of traditional companies that have been operating for a long period of time went international. Before stepping into foreign countries, they step by step reduce the potential risk of entering new markets, try neighbouring or physically near markets. In fact, global competition has forced SMEs to seek new markets and to speed up the product cycle development. This, in turn, creates new and difficult challenges for international managers as the choice of direction is infinite. McDonald’s, the global food service retailer, successfully went international in 1960 in order to take competitive advantage over its main rival Domino’s. McDonald’s restaurant has a different menu in each country as they try to adapt their menus to different tastes and preferences as well as local cultural traditions all across 190 countries.
According to Rugman and Collinson (2009), SMEs definitions varies in different countries as, for instance, in the United States, SMEs have up to 500 employees, while European SMEs have around 11 to 200 employees and sales of $40 billion. Most of these companies have less than $5 million annual sales but they are able to compete with rivals of all sizes and perform operations effectively that some multinational companies cannot do. It is noticed, that the governments often provide financial support for SMEs in order to support export performances and connect to international markets. The German government representative has signed an agreement to sponsor small and medium enterprises with $2.5million in Sub-Saharan Africa what will improve competitiveness and raise demand. (Jackson, 2014)
3.0 Motives for Internationalisation
According to American Marketing Association (2007), the research shows that the key motive of internationalisation is brand identity and the associations of luxury product image, market appeal, lifestyle perception, niche market opportunities and global relevance. Similarly, Clarke and Wilson (2009) agree that seeking business growth opportunities is an obvious motive for SMEs to go international. They also state that the most important drivers of internationalisation are the opportunity to control a competitive advantage, the desire to spread geographical risk and the need to follow consumers into foreign markets. Besides, the term internationalisation can be associated with the export and import, thus, Albaum and Duerr (2008) believe that exporting is still the most common tactic for manufacturers to run business abroad what help to achieve profit-oriented goals like return on sales, stability, investment or profit maximisation and non-profit objectives such as maintaining employment, customer service excellence and management expansion. In turn, Wall et al. (2010), suggest three categories of ways for a firm to go international: export-based method, non-equity methods, and equity methods. “Exporting is the business activity of meeting the demand for goods or services in foreign markets.” (Clarke and Wilson, 2009, p.5) It is the most common and the oldest way in which SMEs begin to go international. In 2010, Hannahen identified that small enterprises account for 30 percent of all the U.S. exports what is $300 billion per year. Also, the fastest growing segment of the United States exporting firms, comprising 65 percent of all U.S. exporters, are firms with 20 or fewer employees, what demonstrates that size is not an essential requirement for success in global markets. According to Koksal (2006), exporting has become a significant internationalisation strategy for both companies and national economies in the world markets. It is possible to state that another key reason for small and medium-sized enterprises (SMEs) to go international is profit, especially if a firm has innovative technology, unique products and other advantages to expand internationally. This lead to another essential motive – to strengthen competitive position and weaken the rivals. Kotler defined competitive advantage as ‘the company’s ability to perform in one or more ways that competitors cannot or will not match’ (2012,p.311) and Porter emphasized that strong local competition frequently benefits a national industry in the global market and companies in a competitive environment produce qualitative products more efficiently. In 2012, the European Commission has agreed to support small and medium sized enterprises in the EU and US in order to access markets in Atlantic. They also believe that internationalisation for SMEs mean faster growth, more workplaces, higher wages and cross-border partnership development in the global market. It is interesting to note, that 41% of SMEs admitted that the main reason for entering the international market is the access to new markets, while other 31% of SMEs named the access to know-how technology and diversification of product or service portfolio as the main reason to increase international business activity. (Source: HIS Survey, 2012) In addition, Albaum and Duerr (2008) added that new markets help a company to use better its production volume, to extend the product life cycle, to increase competitiveness and even gain tax benefits.

4.0 Barriers of Internationalisation
It is generally accepted that most organisations, particularly SMEs, face with a number of barriers and challenges when accessing international markets. Finance limitations and a lack of physical resources has been noticed as a leading barrier to the internationalisation of SMEs. Additionally, tariffs on imported goods will discourage trade and reduce economic welfare. (Wall, et al., 2010) In a situation of market turbulence, it is believed that limited information of potential markets and a lack of technical knowledge can be barriers to export and ability to stay in a foreign market. Based on the literature, ‘barriers are important because of the impact they have on the behaviour of potential and actual exporters at various stages of internationalisation’ (Albaum and Duerr,2008, p.27) Rugman and Collinson (2009) suggested a number of international barriers to trade: price-based barriers, international price fixing, quantity limits, non-tariff barriers, financial limitations and foreign investment controls, meanwhile, Wall, Minocha and Rees (2010) agreed and added that inadequate quantity of and/or untrained staff for internationalisation to SMEs to be the key barriers to access the foreign markets. Crick (2007), in turn, states that SMEs face difficulties with locating adequate representation in target export markets, while Kneller and Pisu (2007) concluded that finding an appropriate foreign market partner is a main barrier to the internationalisation of the small and medium enterprises. Due to the geographic location, time zones and cultural differences, there is a high probability of risk in finding and contacting the right business partner or potential customer. Another barrier that may arise is foreign exchange risk what is a very real concern for financial managers. Because of currency exchange, SMEs may face with financial losses when carrying out international trade operations and, also, may affect the prices of export and import. Research of 500 UK small-medium enterprises showed that firms were more aware that ever of the need to be prepared for an increasingly expansive range of risks, such as high energy and operating costs, growth in UK economy and the Eurozone crisis. With this knowledge at hand, it is reasonable to state that finance officers in SMEs do not usually understand the importance and possibility of foreign exchange risk. In a later study, Gelis (FT, 2013) added that ‘currencies outside the usual dollar, euro, sterling markets – raises even more potential risk’ as fluctuation in these currency standards can either increase or decrease the returns linked with foreign investments. Although Rugman and Collinson (2009) argue that tariffs (import, export and transit) continue to be one of the most commonly used barriers to trade. Authors also include non-tariff barriers which include quotas, voluntary export restraints (VERs), subsidies, exchange controls and other standards and formalities. Such barriers, like taxes or tariffs, reduce the demand for the product while increasing the price to the customers.

5.0 The Uppsala model
The majority of internationalisation theorists provide a number of various internationalisation models, for example, Hymer’s model (1970) mostly focused on the early stages of firms’ growth and domestic-market approach, while Vernon (1966) developed the internationalisation model based on monopolistic theory of international production. Both of these classic models are still used in practice, however, according to Hegge (2002), the Uppsala or stage-theory model differs from other models and the reason for going global is that firms internationalise because other competitors in their national network internationalise as well what makes it dependent on each other. Uppsala model considers internationalisation as an incremental process of acquisition, integration and the use of knowledge about foreign markets. A basic theory of the Uppsala model is that lack of knowledge about foreign markets is a key issue to go international, however, this issue can be overcome via information about foreign market environments. The more data and awareness the firm has about a foreign market situation, the lower the perceived market risk will be and, thus, the higher the actual investment by the firm in that market supposes to be. The main concepts of the model are market commitment and knowledge, commitment decisions and recent business activities. All tangible and intangible assets that a firm accumulates in a particular geographic market structure its market commitment. (Forsgren and Hagstrom, 2007) The original model was introduced by Johanson and Wiedersheim-Paul (1975) who distinguished the Uppsala Internationalisation model into four steps of entering a foreign market: no regular export; export activities; independent representatives and subsidiaries; establishment of production/ manufacturing facilities. The authors suggest, that internationalisation process often starts in foreign markets that are physically close to the home market, for example, England and Ireland or Belgium and the Netherlands. Similarly, companies are more likely to internationalise with countries of similar language, culture, political similarities and educational systems. It has been found out by Aerts (1994), who examined the internationalisation process of Belgian SMEs, that 62 per cent of the companies exported straight to neighbouring countries what made it easier for them to control the resources and gain knowledge of the market situation. It is generally believed, that most of the firms start its internationalisation through exporting to the target country via different agents or representatives. For instance, Boxman, Swedish CDs website, decided to internationalise quickly through local country manager, who in turn hired a number of people for customer service and other operations in order to ‘build a brand name and to exploit first-mover advantages’ (Forsgren and Hagstrom, 2007, p.295) However, there are some theorists who argue that the Uppsala model is too deterministic and does not take into account interdependencies among various country markets. Johanson and Wiedersheim-Paul (1975) pointed out that a major criticism of the stage theory model is that it is based on the mentioned research of the export behaviour of four Swedish companies and research on Australian firms. It is interesting to note, that the model was initially introduced as understanding actual behaviour of companies, rather than suggesting suitable standards for how to invest abroad. Further, authors criticised that the Uppsala model deals with only the early stages of internationalisation, particularly for SMEs starting their international process abroad. Most of small-medium sized enterprises (SMEs) have no international experience and knowledge, as they are usually local businesses with limited international skills. Consequently, the decision to go internationally is quite risky because of the essential investment required to internationalise, insufficient management skills and lack of brand recognition. For such firms, the Uppsala model provides this essential experience and increases a level of knowledge about the international markets as well as evaluates the potential opportunities and threats. Thus, the Uppsala model decreases most of the disadvantages that SMEs meet when going internationally.

6.0 Conclusion
From examination of the existing literature, it has been argued that a number of different reactive and proactive motives for internationalisation of SMEs has a particular impact on future business growth and profitability. Small to medium-sized enterprises have to follow certain strategies in order to stay internationally successful (Hegge, p. 170) and gain competitive advantage. The reasons to internationalise are mostly market driven and less resource and efficiency driven, which signifies that market access, growth and access to new technologies are very important. (Hegge, p.173) It has been discussed that geographical and psychical distance plays a significant role for a firm when selecting a number of countries to go international. On the other hand, a limited company resources, lack of managerial skills and market knowledge are the top barriers to SME internationalisation. Authors concluded that there is a high level of risk in financial operations across different countries due to the unstable economic situation and fast changing business environments. Earlier studies of Uppsala model have shown four stages referring to the process of internationalisation and identified exporting as a starting point. However, the stage-theory model was criticised by a number of theorists that the series of internationalisation strategies are based on effects of learning and experience of Swedish and Australian firms what makes it irrelevant to nowadays situation. According to the discussion above, it is possible to conclude that internationalisation gives a better and faster business growth for a firm and the ability to double its revenues, however, SMEs internationalisation is a tough process and has a number of barriers which can be strategically overcome and well managed.

Strategy Process, Context, Content

Critically evaluate the importance of strategy process and strategy context in determining strategy content.

Nowadays, the business industry changes rapidly, and for the company to succeed in this environment, it is vital to manage day to day business activities, and spend time monitoring and adapting to the changes that are happening in technology and business. The purpose of this essay is to critically examine the importance of strategy process and strategy context and its connection with strategy content. Traditionally, these are the three characteristics of strategy that can be identified in everyday strategic problem situation. This essay also involves a number of different viewpoints of strategic management gurus and provides several well-known industry examples in order to support the given arguments.

Alfred D. Chandler (1963), defined strategy as the determination of the basic long-run goals and objectives of an enterprise and the adoption of courses of actions and the allocation of resources necessary for carrying out these goals. In other words, strategy is a long-term direction of any business organisation with a various set of day to day activities. Strategies generally exist at many different levels in any organisation what helps to ensure a specific place in the market and tend to follow the business direction. Global companies such as Apple, Amazon, IBM and Coca-Cola established its position in a particular industry relative to competitors by implementing specific strategies and tactics that led to greater income for their business. Due to the constantly changing nature of business environment, Henry Mintzberg distinguished strategy as either deliberate (or intended) and emergent which are both important. Objectives and strategy may suddenly change in response to environmental changes or because the business organisation itself has changed. The launch of Apple’s iPod in 2001 is a great example of success over Sony’s Walkman based on deliberate and emergent strategies. It is interesting to note, that 86 per cent of 40 business leaders admitted to having no consistent plan within their business but set leadership as the starting point of strategy. (Sunley, 2011) Some strategies may be planned at least at their first steps, but many more just simply emerge in an organisation without being consciously intended or being deliberate acts. (McGee et al., 2005) For instance, Google Company does not have a consistent five year strategy plan as the focus is primarily on what is innovative and exciting to their consumers in a particular point in time.
Having considered what strategy is, it is reasonable to discuss and analyse the meaning and importance of strategy process. According to Johnson (2014), strategy process examines how strategies are formed and implemented. It is argued, that the process could be divided into four steps of actions – identifying, diagnosing, conceiving, and realising. From the managers’ perspective, it helps to monitor and evaluate the whole picture of the strategy. In 2010, Unilever, a global FMCG company, has launched the Sustainable Living Plan with the aim to improve people’s lives and growth sales by 2020. Across 190 countries, Unilever employees are monitoring the progress of business plan regularly. Managers also measure whether the activities being taken in the organisation are in line with the decision selected and whether the outcomes are in line with what was expected. In today’s quickly moving market situation, strategy basically consists of a set of micro decisions made by individuals in the organisation every day. For many successful companies, environmental values are now becoming a fundamental part of their cultures and management operational processes. In that case, in order to run a logical and clear strategic process within any business, it is critically vital to understand the nature of the internal and external environment in which an organisation operates.
The set of circumstances under which both the strategy content and strategy process are determined is referred to as the strategy context. (De Wit, 2014) It refers to both the internal and the external contexts of organisations. A thorough industry analysis, known as external environment, makes sense of how strategies have to fit with culture and surroundings by using concepts like SWOT, PESTEL and Porter’s Five Forces. The internal environment is composed of organisational culture, human resources and management skills of the workforce that are significantly impact on the inside comfort of organisation. For any business to grow successfully, all managers must be able to forecast, identify and deal with the internal and external environmental change. The techniques in which managers interpret the environment and instigate changes in their organisations is a central part of the strategy process. (McGee et al., 2005) However, if an organisation reacts too late to environmental changes, there is a high risk of failure. There are two causes for strategy fail: not understanding the environment in which the organisation is going to operate and inability to adapt to unexpected changes in the environment such as financial crisis or technological innovations. For instance, Tesco plc, a multinational grocery and retailer, left its loss-making business in the US and Japan market in 2011 due to the lack of knowledge and research of external environment. Besides, almost all well-known US Internet companies such as Yahoo, Google, eBay or Facebook met with failure in China in the last ten years. The reason was that China is different in culture comparing with the US. In eBay’s case, the company did not have enough awareness about the market situation and customers’ demand what made it difficult to compete with the rivals like Alibaba and Taobao. Unilever, in turn, is a successful example of how the company entered many low- and medium- income countries by using environmental strategy and adapted their products to each region market. Matching the organisation to its environment requires a more proper structure, different schemes and an appropriate organisational culture, which are aspects of strategic management. In fact, both environments has an important impact over the development of a company’s strategy and its degree of success.
The last but not the least strategy dimension is strategy content. De Wit & Meyer (2014) defined content as a set of combined decisions and choices that lead a company into the future. Its aim is to create organized, meaningful, engaging and sustainable content in order to connect with the audience. Content strategy development requires company, customer and competitor analysis what helps to stay ahead of competition and increase sales. In 2013, Coca Cola launched a new campaign called “Coming Together” with the aim to push ‘no sugar coke’ to the US market. Coca cola rose the issue of obesity among the youth and communicated with them through social media, seminars, web and direct mail providing useful instructions of how to fight with obesity. Indeed, Coca Cola delivered the right content to the right user at the right time. Content management is all about the delivery of the exact information, product or service to the target audience in all the places across each stage of the buying process. For example, the creation of the website with a powerful and easy in use content, makes website visitors’ and internal managers’ life as easy as possible. Many airlines companies like British Airways, EasyJet or Ryanair, provide a number of options when booking the flight online: hotel reservations, car rental, transport or parking services. It is possible to conclude, that marketing is a component of strategy content because it has a direct effect on sales and profitability of any business and helps to engage with the customers daily.

The essay was written to highlight that the way in which the strategy process is organised have a significant impact on the strategy content, similarly as the content of the current strategy strongly influence the way in which the strategy process will be led in the future. (De Wit, 2014) Different strategic management theorists concluded that there are many definitions of strategy and numerous ideas of how strategies should be implemented. A number of well-known industry examples from Tesco, Coca Cola, Apple, Google, Unilever and eBay and other companies supported the above mentioned arguments. I agree with a statement said by Mintzberg (2003), that the success of a strategy depends on doing many things well and integrating between them. If there is no fit among activities, there is no distinctive strategy and little sustainability.