Apple strategy potentially causing trouble for China consumers

1.    What is the link to Crisis Management?

The Beijing marketinterest for iPhone’s has caused a riot among black marketeers as thousands of people waited outside the store overnight to hear the news that the U.S group suspended their sales of iPhone’s in China creating chaos outside the store.

2.    What stage of Crisis Management does the system appear to be at?

The system appears to be in the issue stage. This article states that although iPhone sales have been suspended, things were business as usual and therefore the chaos that was created earlier, had subsided. That being said, this still is an issue for Apple as they are losing sales and market share within China. Further, this could create more uproar from consumers in China if U.S group continues to fail to provide more information as to how long they will have to wait for device availability in China.

3.    How well does the system appear to be handling the situation?

The system appears to be handing the situation moderately. On the one hand it seems that Apple has been keeping supply scarce in China has part of a strategy to increase consumer desire. On the one hand it seems that this has gone to an extreme where chaos and riots are occurring as a result of it. There must be a fine balance that U.S group could identify to ensure that there strategy of increasing appeal can be maintained without having consumers causing trouble. The article further states that the Apple does admit to having significant order backlog due to high demand. As a result, they will need to address as soon as possible.

4.    What level of crisis preparedness does the system appear to have?

       The system has a 3 level of preparedness. This is because they knew of low supply availability and     could suspect that a protential riot could occur for their product. However, they are uncertain at the moment as to when their product will be available and therefore are not communicating all knowledge to consumers. 

5.    What personal reactions/feelings does the description trigger in you?

I thought it was very interesting that Apple’s strategy included a scarce supply to increase appeal, as this is very typical in Asian culture. Often items that are “special editions” with certain numbers available have driven consumers to obtain this item at any cost. Not only have I seen it happen throughout Asia, I probably have been a victim of this myself while in Asia. That being said, I was surprised that the company would allow it to get to a point where consumers were so upset, it triggered a riot. Furthermore, I am surprised they were not able to provide more details to consumers as to when it would be available.  This is an opportunity for Apple to capitalise market share in China versus letting Samsung and Huawei take over.

6.    What advice would you offer to those involved?

I would advise Apple to communicate to consumers when they can expect product availability and to ensure they have enough supply to meet demand. The company cannot afford to have another riot incident because of lack of availability. If this continues to occur, this could turn consumers off from the product completely. Furthermore, if this is part of their strategy, it opens up the potential that another riot occurs causing further injuries to people which can turn into a serious problem for Apple. 


Article Source:
http://www.theglobeandmail.com/report-on-business/international-news/global-exchange/financial-times/apple-fans-the-flames-in-china/article2314400/