[DOCUMENT TITLE]
Unit 1 –Evaluating the effects of the environment on a business that trades
within the EU
Apples History ......................................................................................................................................... 1
Pestle on Apple ....................................................................................................................................... 2
Political Factors on Apple........................................................................................................................ 2
Economic Factors on Apple..................................................................................................................... 3
Social Factors on Apple ........................................................................................................................... 4
Technological Factors on Apple .............................................................................................................. 4
Legal Factors on Apple ............................................................................................................................ 4
Environmental Factors on Apple............................................................................................................. 5
Swot Analysis on Apple ........................................................................................................................... 5
Strengths ................................................................................................................................................. 6
Weaknesses ............................................................................................................................................ 6
Opportunities .......................................................................................................................................... 7
Threats .................................................................................................................................................... 7
Apples Corporate Culture ....................................................................................................................... 8
Advantages.............................................................................................................................................. 8
Disadvantages ......................................................................................................................................... 9
5C Analysis .............................................................................................................................................. 9
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Impact of Internal and External environments on a business .............................................................. 10
Factors that influence a company's competitive edge ......................................................................... 10
External and Internal environments' strengths and disadvantages ..................................................... 13
Perfect competition .............................................................................................................................. 14
Imperfect Competition ......................................................................................................................... 15
Monopolistic Competition .................................................................................................................... 15
Oligopoly Market .................................................................................................................................. 16
Monopoly Market ................................................................................................................................. 16
Demand ................................................................................................................................................. 16
Supply.................................................................................................................................................... 17
Price elastic demand ............................................................................................................................. 17
Unique features of market structure .................................................................................................... 17
Freedom of entry .................................................................................................................................. 17
Number of firms .................................................................................................................................... 17
Nature of the product ........................................................................................................................... 19
Affecting Demand ................................................................................................................................. 20
Affecting Supply .................................................................................................................................... 20
Affecting elasticity of demand .............................................................................................................. 21
Supply Demand and Price elasticity of demand ................................................................................... 21
Price elasticity of demand..................................................................................................................... 21
How do these factors affect pricing and output decisions? ................................................................. 22
How does Apple respond to the changes within the market? ............................................................. 22
Reference .............................................................................................................................................. 23
Apples History
In April 1976, Steve Jobs and his high school classmate Steve Wozniak created Apple. This
when they designed and produced their first product, the Apple I. The Apple I sold to
hobbyists, but it generated enough cash to allow Steve Jobs and Steve Wozniak to improve
the device. In 1977 they released the Apple II which was the first personal computer with
colour graphics and a keyboard. This is where their business began to take of as instead of
designing a computer that only certain people knew how to use, they made a user-friendly
computer which everyone could use. First year of sales topped $3 million and two years later,
sales grew to $200 million.
Apple’s purpose is a for profit business and so its main purpose would be to make profit. Apple
does this by manufacturing and selling high quality devices such as: phones, laptops, tablets
etc. Apple also offer numerous services such as Apple Music and Apple TV. One of Apple’s
main competitors is Samsung and in the year 2020 they reported a revenue of $66.96 trillion
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and a profit of $12.35 trillion. This is more than what Apple makes; however, Apple only sells
devices ranging from phones to computers whereas Samsung also sell household appliances
such as: fridges, washing machines and TV’s. As of 2020, Apple states that they have a total
of 137,000 full-time employees and has 510 stores in 25 countries. Apple reports that they
have made $11.25 billion profit on $59.7 billion revenue.
Pestle on Apple
Political Factors on Apple
Apple is one of numerous American technology firms that has earned a large revenue. It had
$34.7 billion in the bank on June 30, 201. This is generating calls for higher corporate taxation
in the United States where income inequality has become a major political issue. Apple is
reliant on China's lower-cost production. Manufacturing in China may be disrupted, or prices
raised because of social and political instability. Export restrictions on Chinese goods have
also been proposed to promote American manufacturing.
The trade war between China and the United States is a worrying political issue that has an
impact on Apple's success and market share in China. If US (Unconditioned Stimulus) tariffs
on Chinese imports into the US rapidly escalate, Apple products can face high taxes from the
Chinese government. This political problem will influence the market for iPhones and other
Apple products in China.
The back taxes and interest conflict between the Irish government and Apple has been
settled. Apple charged more than £15 billion in this situation. Apple is the world's biggest
taxpayer, and political concerns may have an impact on its financial performance. In several
countries, there are several other political factors that may influence Apple's success. Political
turmoil is one factor that influences Apple's revenue and supply chain.
Apple will have to pay a high price to find alternatives to Chinese production. This may result
in higher Apple commodity costs. They are also vulnerable to political instability in China
because of its reliance on Chinese factories and markets. They may also become a victim of
rising nationalism and anti-Americanism in China, resulting in a decrease in its market share.
If China is seen as a threat, Apple's strong relationship with China could become a political
problem in countries like the United States and Japan. Antitrust issues and political pressure
to split up or restrict Apple's market share could emerge because of the company's dominant
position in fields such as music.
Apple is primarily reliant on China's cheaper manufacturing. Manufacturing in China might be
disrupted or costlier due to social and political upheaval there. To strengthen American
industry, there have also been efforts to limit Chinese imports into the country. Finding
alternatives to Chinese production might cost Apple a lot of money. This can result in higher
Apple product costs. Apple is susceptible to political turmoil in China because of its reliance
on Chinese markets and production. Apple's market share may decline because of rising
nationalism and anti-American sentiment in China. If China were to be seen as a danger,
Apple's tight ties to China may become a contentious political issue in nations like the United
States and Japan.
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https://pestleanalysis.com/apple-pestle-analysis/
http://panmore.com/apple-inc-pestel-pestle-analysis-recommendations
https://www.marketingtutor.net/apple-pestle-
analysis/#:~:text=Apple%20is%20a%20leading%20tax,Apple%20sales%20and%20supply%20
chain.
http://panmore.com/apple-inc-swot-analysis-recommendations
Economic Factors on Apple
Many developed countries' economic stability will provide opportunities for a tech company
like Apple. It can take advantage of these opportunities to grow its company. Apple, for
example, will take advantage of Asian countries' higher growth rates to boost market share
and sales. Keep in mind the competition; in the first place, Apple must seize those
opportunities. Increased labour costs in Apple's manufacturing countries can influence the
company's goods and profits. A strong US dollar can have a negative impact on exchange
rates, making it more difficult for Apple to conduct business in countries such as China, India,
and Pakistan.
Apple only makes luxury goods, which means it caters to the upper echelon of the industry.
Apple, unlike Samsung and Huawei, is unable to successfully enter the Asian market with its
premium pricing strategy. Samsung and Huawei are kings of the mobile industry, catering to
both low- and high-end customers. Apple is also up against fierce competition from leading
technology firms such as Samsung and Lenovo. These businesses have high-quality laptops
and smartphones at reasonable rates. Apple have provided jobs in many Asian countries
allowing for those countries’ economies to develop. Apple has also benefited the US economy
through investing over $350 billion to set up 5G towers across the states.Apple said that even
more users will be able to use many of its most well-liked services globally. Apple Music is
accessible in 52 more nations, while the Apple Store, Apple Arcade, Apple Music, Apple
Podcasts, and iCloud are accessible in 20 more nations. The following nations and regions are
listed: Africa, Asia-Pacific, Europe (Bosnia, Georgia, Kosovo, Montenegro, and Serbia), Middle
East (Afghanistan and Iraq), and Oceania. Africa, Asia-Pacific, Europe, Latin America and the
Caribbean, the Middle East, and Oceania are also expanding their availability of Apple Music.
Syria, North Korea, Sudan, and Cuba are apple-free nations that are also subject to US trade
restrictions. This indicates that it is against Apple's Global Trade Compliance to "export, re-
export, sell, or provide" Apple products from the United States or any other country in the
United States to these nations. According to Apple's Sales Finder, there are several additional
nations, including several in Africa and the Middle East, without either an Apple store or an
Apple Certified Reseller.
The potential market for higher-end consumer products like those offered by Apple may
become smaller if middle-class earnings stagnate in various industrialised nations, including
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the United States. Exchange rates might rise because of a strong dollar, costing Apple more
money to conduct business in important regions like China and Europe. If the Indian
government and bureaucracy support the premium Apple brand, it may be beneficial for the
business. Apple exclusively targets high end markets since it produces premium items. Apple
is unable to effectively enter the Asian market like Samsung and Huawei using the premium
price model. Both Samsung and Huawei are dominating the smartphone industry and are
aiming their products to cheap and high-end consumers.
Social Factors on Apple
If Apple does not offer simple-to-use, priced phones on the market, the current trends of
rising smartphone device popularity might be a tremendous chance for the company. Apple
faces both possibilities and problems as social media and smartphone usage grow. phones on
the market. Apple faces both opportunities and challenges as social media, and smartphone
trends develop. Apple has a close relationship with China, and many North American and
European customers may be offended. If tensions between the US and China rise, Apple's
brand image could suffer.
Many customers from North America and Europe may feel upset given Apple's tight ties to
China. Apple's brand image may be impacted if US-China tensions rise. Urbanization trends in
China and India may be more advantageous for Apple, the most well-known brand in the
world. Another region where consumer spending is increasing is Africa, yet few people have
even heard of Apple products.
Technological Factors on Apple
There are several rivals that offer advanced technical goods of high value at low prices, which
has harmed Apple's brand reputation and financial results. Lenovo, for example, has retained
its spot in the PC market while Apple has lost it. It is because of these competitors' low-cost,
technologically advanced products.
There are several rivals offering high-quality, advanced technology items at low prices, which
has harmed Apple's brand image and financial performance. For instance, when Apple lost
market share, rivals like Lenovo retained theirs. It is because of these rivals who provide
innovative items at cheap costs. Another technical development that is gaining popularity
now is cloud computing. Apple has a fantastic chance to take advantage of it by providing
cloud-related products and applications.
Competitors like Google and Samsung have shown to be quite adept at imitating Apple's
goods and services. Google released Android Pay, a payment service with similar features to
Apple Pay, in less than a year. As a result, many of Apple's distinctive services and goods are
no longer distinctive.
Legal Factors on Apple
External environmental factors that could pose a danger to Apple include legal factors. Apple
must comply or face a lawsuit and fines, as well as a tarnished brand name. Privacy concerns
are also a source of concern for both technology consumers and governments. A few months
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ago, the US Congress requested that Apple and Google preserve users' privacy. This legal
aspect poses a danger to Apple, and it raises the stakes for goods that deal with personal
details.
Technology firms, such as Apple, are subject to stringent telecommunication regulations,
which pose a serious threat to the business. Apple is also considering a foray into the
automotive industry, with a prototype code-named "Titan" in the works. Investors are putting
a lot of pressure on Apple to release the car and refund their money. This project would
increase the number of regulations and the expense of litigation.
Environmental Factors on Apple
Many Apple's goods are made in China, where pollution and environmental consequences
are major concerns for the company, potentially affecting manufacturing costs and
regulations. Apple is also focusing on modern technology solutions, such as energy-efficient
batteries, processors, and other equipment that emits less heat. Apple is working on a
business sustainability initiative that includes the disposal and recycling of non-functioning
electronic devices. Climate change is a result of global warming, and it could influence Apple's
supply chain. Apple is reliant on a massive internet infrastructure and data centre, which
could result in potential increases in energy costs.
Apple could improve its environmental performance by using more environmentally friendly
packaging. Apple has now taken steps in this direction by reducing the volume of plastic in its
smartphones and eliminating products that most consumers already own. This is an incentive
for Apple to increase revenue because activists who may have been unhappy with Apple's
past environmental effects may now wish to purchase Apple's goods which is working
towards their aim of becoming carbon Neutral by 2030 for all their products.
Apple is working with suppliers to move toward a circular economy that does away with the
need for carbon-intensive mining and conserves resources while also developing new
avenues for the use of recycled materials. Among other materials presently used in Apple
products, this includes recycled gold, cobalt, aluminium, and rare earth elements. The
company's products are having less of an impact on the environment thanks to these
developments and suppliers switching to renewable energy. Recent achievements include an
eight percent reduction for the 16-inch MacBook Pro and an 11 percent reduction for the
carbon footprint of the iPhone 13 Pro when compared to earlier generations. Solvay is one of
19 suppliers participating in Apple's Supplier Clean Energy Program that are increasing their
usage of renewable energy throughout their operations, frequently going beyond their
business with Apple. 19 suppliers are now a member of the initiative in Europe, including
STMicroelectronics, which joined Apple's programme and has since launched nine more
projects to provide renewable energy for its larger operations.
Swot Analysis on Apple
SWOT analysis is a tool used for documenting internal Strengths and Weaknesses in a business
as well as external opportunities and threats.
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