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Market Model Patterns of Change: Apple Corporation - Research Paper Example

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Market Model Patterns of Change: Apple Corporation

... For example, in 1983, the Macintosh computer's innovative graphical user interface gave Apple Computer a unique, user-friendly product” (pp. 122). The short- and long-term behaviors of the model in the technology industry demonstrate how Apple’s inherent success might live on long after its co-founder Steve Jobs passed on. Elementally important behaviors crucial to Apple’s continued success as a monopoly are demonstrated in these factors: the transaction costs the company pays; strategies in order to deal with the transaction costs; and productivity measures that can be utilized to enhance the company’s sound financial stability in a market economy. II. Transaction Costs Three possible areas for Apple’s technology industry that could lead to transaction costs include: production; shipping; and technical support. Production costs are probably nominal considering what production costs would be if production were not being outsourced. Apple is notorious for outsourcing most of its assembly and labor associated with production to China. Of course, this isn’t the most ideal scenario, as many people would complain that Apple is trodding on the backs of the poor in order to have its menial workers live in roach- and rat-infested quarters, working round-the-clock to fulfill orders. Because of its demand, Apple also carries the additional burden of having to ship orders worldwide within a certain time frame. Not only this, but Apple must be able to provide 24/7 technical support around the world in order to satisfy customers and ensure that their customer base is loyal to their brand. No matter whether one has to pay low wages to Chinese factory workers, come up with revenue to ship the products, or provide well-paid tech support—Apple’s transaction costs have been cut significantly in order to ensure that their ability to produce revenue is reduced as much as humanly possible. More will be discussed about these strategies in the next section. III. Strategies for Dealing With Transaction Costs The behavior that helps Apple stay at the top of its game are its abilities to: 1) maintain low production costs; and 2) ensure that it maintains high-quality, licensed products for the price. Low production costs have effectively been implemented by ensuring that the workers being hired are being paid the lowest possible rates. In China, this means that people are only making minimal wages, sometimes for pennies on the dollar. In the United States, people known as Mac Specialists who work at the Genius Bar in the Apple Store may get salaries, but it takes a long time to become a Mac Specialist. Floor salesmen are rumored to make $10 per hour, possibly plus a commission. This means that, in most cases, Apple is paying its hourly employees almost double the minimum wage for most states. However, as most people might relate, $10 per hour is a paltry sum compared to the amount that one needs to make weekly in order to maintain one’s budget if there is only one working person in the household. In order to keep production costs low, Apple needs to pay employees less. It’s that simple. Unless they scaled back wages, Apple would never make a profit because they need to utilize those funds to put money back into their product testing, design, and engineering—as well as to be able to continue producing high-quality, ...Show more

Summary

MARKET MODEL PATTERNS Market Model Patterns of Change: Apple Corporation Word Count: 1,028 (4 pages) I. Introduction Apple Corporation is a key symbol of what could generally be defined as a monopoly—in almost every sense of the word. In almost every area, from computers to phones to MP3 players, Apple dominates the technology market…
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Market Model Patterns of Change: Apple Corporation essay example
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