Apple Inc: PESTEL Analysis - Case Study Example

Apple Company A. Apple Company The Business Mission ment: Apple Company has no specific mission ment, but a list of the products they offer in the market. “Apple designs Macs, the best personal computers in the world, along with OS X, ILIfe, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and has recently introduced iPad 2 which is defining the future of mobile media and computer devices” (Apple Inc., 2015). Their focus is to revolutionize the computing world by introducing personal computing experience to computer users across the world through advanced software, hardware and internet offerings. 2. History of the Company Apple is an American multinational with headquarter in California. It designs and sells consumer electronic online services, computer software, and personal computers. Apple Company was started by Steve Jobs, Ronald Wayne, and Steve Wozniak on First April 1976 with the focus to design and sell personal computers (Apple Inc., 2015). It was incorporated on January 3, 1977 as Apple Computer, Inc. and later renamed as Apple Inc. on January 9, 2007 following its focus towards consumer electronics. Currently, Apple is the second-largest information technology company y revenue and third-largest manufacturer of mobile phone. It is the largest publicly traded corporation across the globe valued at over $700billlion. The company has changed from manufacturer and seller of personal computer to mobile electronic devices such as iPhone and Apple TV (Lamido, Nd.). It has achieved great success through innovative products such as iPod Touch, iPhone and iPad that have revolutionized mobile phones, personal computers, and portable music players. Personal computer and consumer electronics are the parent brand of Apply Company. They offer the wide range of innovative products such as laptops, desktop computers, mp3-players, computer peripherals and a variety of computer software (Apple Inc., 2015). The company has developed various products to dates such as iPod iPhone, iPad, iPad Mini, Apple TV, OS X, iOS, iWork, iLife, and Apple Watch. In addition, they offer the variety of services such as Apple store online, Apple Store, iOS App Store, iTune Store, iCloud, iBooks, etc. As of October 2014 Apple Inc. operated about 437 Apple retail stores in 15 countries across the globe (Apple Inc., 2015). In the year, 2013 Apple recorded revenue of $37.5 billion and a net profit of $7.5billion. There was a decline in gross margin from 40 percent in the previous year to 37 percent in 2013. There was an increase in sales of iPhones from 26.9million in the similar period in the previous year to 33.8 million (Lamido, Nd.). Also, iPads sales increased from 14million in the similar period of the previous year to 14.1million in 2013. However, Macs sales declined from 4.9million in a final quarter of 2012 to 4.6million in the final quarter of 2013. However in the first quarter the sales of iPads and iPhones declined compared to the sales of the similar periods in the previous year. During the first three-quarters of the year, the retail sales of the company fell $10 million in relation to a same period in the previous year (Lamido, Nd.). The average revenue per store for the same period also fell from $40.3 million in the previous year to $39.3 million in 2013. Therefore, Apple experienced decline in sales of some products in the year 2013 that was responsible for the decline in business profitability (Hasan, 2013). The company was experiencing challenges because of its small size store at Stanford mall that was 1,100-square-foot with a capacity to serve only 2,000 people a day (Lamido, Nd.). The company expanded the store in 2013 to about eight times the size of the old store. In the same year, the company introduced a number of new products into the market (Apple Inc., 2015). For example, they launched seventh iOS, OS X Mavericks, iTunes Radio, iOS 7, OS X Mavericks and iBeacon. In the same year, the company acquired various firms such as Embark Inc., and Topsy (analytics firm) to strengthen its operations (Apple Inc., 2013). Finally, the company hired competent high profile personnel such as Paul Deneve as Apple’s vice president. For this reason, renovations, new products launch and recruitment of competent high profile managers are expected to improve the performance of the company (Hasan, 2013). Since the incorporation of Apple Company, it has achieved tremendous growth in share value and capitalization to emerge the best company in the world (Hasan, 2013). However, in 2013 the company suffered the decline in share price and profitability due to decline in sales of some products. There is also a probability that the death of the company’s chairman Steve Jobs contributed to declining in the company’s performance (Lamido, Nd.). Currently, the company faces various threats such as stiff competition due to the nature of its products. Smartphones, personal computers, and tablets are subject to technological changes. If more innovative companies come into the market, they can cause Apple to the lose market grip (Hasan, 2013). Apple Inc. must focus on consumer needs by introducing new products and transitions to keep in phase with market needs. However, there no guarantee that the company will continue delivering innovative products relevant to the customer requirements in the future (Lamido, Nd.). The company depends on performances of third parties who are also their partners. For example, it relies on hundreds of thousands of retails outlets for its products served by about 500 retail stores (Apple Inc., 2013). They depend on cellular carrier partners to sell company’s subsidized phones, etc. The future competence of the company depends on its future relationship with its partners to market its products and outsource services (Hasan, 2013). B. The people 1. Current Apple’s executive officers Name Position Role or responsibility 1 Arthur D. Levinson Board’s Independent Chairman Chairs executive board meetings 2 Timothy Cook CEO, Director Management of senior day-to-day executive functions. 3 Luca Maestri Chief Finance officer, senior Vice President, Principal Accounting Officer Managing of Apple’s financial functions. 4 D. Sewell Senior Vice President, General Counsel, secretary Management of administrative operations. 5 Philip Schiller Senior Vice President- Worldwide marketing Heads marketing operations 6 Eduardo Cue Senior Vice President – Internet Software and Services. Management of internet software and services. 7 Craig Federighi Senior Vice President -Software Engineering Heads development of software development. 8 Daniel Ricco Senior Vice President – Hardware Engineering Management of hardware development 9 Jeffrey Williams Senior Vice President – Operations Development and implementation of organization operations. 10 Susan Wagner Director Attend board meetings and formulate organization policies 11 Millard Drexler Independent Director Prepare, attend and participate in the board meeting. 12 Albert Gore Independent Director Prepare, attend and participate in the board meeting. 13 Robert Iger Independent Director Prepare, attend and participate in the board meeting. 14 Andrea Jung Independent Director Prepare, attend and participate in the board meeting. 15 Ronald Sugar Independent Director Prepare, attend and participate in the board meeting. 2. Employees Apple Inc. employs hundreds of thousands of employees across the globe either directly or indirectly. Most of the employees work in retail stores and others as software developers. In the US Apple have about 50, 000 employees and about 30,000 of them work in stores. The company hires both permanent and seasonal workers (work-at-home employees) (Apple Inc., 2013). 3. Board of Directors The Apple’s Inc. board of directors is composed of eight members including the chairman of the executive and the CEO of the organization. Currently, there is one lady in the board. The board members are drawn from heads of various organizations with broad experience in the executive positions such as CEOs and presidents of vice-presidents of the organizations. 4. Target Employees Apple Inc. produces products for various market segments. For example, the iPods targets teenagers who are main users of social media and gaming applications (Apple Inc., 2015). Students are also targeted clients because they use Apple’s products such as iPads, MacBook’s; iPhones, etc. to record notes quickly and maintain proper records. The company targets parents with young children who can download and play games (Hasan, 2013). The business people use iPads, iPhones and MacBook’s for faster and efficient communication with clients (Apple Inc., 2013). Finally, the company targets adult that have needs for internet, messaging, phone calls, cameras, etc. C. Marketing environment: 4Ps of the Apple Inc. Marketing Strategies Apple has used marketing mix in the technology market to achieve its specific goals. Its marketing mix strategies have helped the company to strengthen its position in the marketplace. The company uses the 4Ps – product, pricing, place and promotion in a variety of ways (Apple Inc., 2015). Product: About products Apple has made iPad relevant product for personal computing. They develop different products convenient for the specific purpose of individuals (Apple Inc., 2013). IPhone is a convenient product in a cellular market. They make portable and appealing products with the capacity perform all consumer needs in the technology world (Hasan, 2013). Pricing: The pricing strategy of Apple is designed to meet the needs of specific needs of the consumers. By considering different customers, Apple minimizes the risk of being “priced out of the market” (Apple Inc., 2015). For example, offer varying prices for iPad and tablet. Also, they offer iPhone at discounted prices to specific contractual phone carriers in order to enable flexibility of prices (Hasan, 2013). Place: The place as a marketing strategy, as used by Apple, is evident in the establishment of Apple Stores that has increased accessibility of Apple Products and services. The online store enables customers to examine new products and view information on technical maintenance (Hasan, 2013). Promotion: The promotion aspect of a marketing mix has enabled Apple to reach specific clients for its products. For example, they are to get students by relating iPad with classroom or pulling celebrities. They have associated their products with culture and a necessity for almost everyone. (Hasan, 2013). D. The Financials 1. Stock Performance Chart Source: NASDAQ, (2015 ). The highest and lowest share price between 6th February 2014 and 6th February 2015 was $119.94 and $73.22 respectively. 2. Apples Financial Statement CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflected in thousands)        September 28, 2013     September 29, 2012   ASSETS:      Current assets:      Cash and cash equivalents    $ 14,259      $ 10,746    Short-term marketable securities      26,287        18,383    Accounts receivable, less allowances of $99 and $98, respectively      13,102        10,930    Inventories      1,764        791    Deferred tax assets      3,453        2,583    Vendor non-trade receivables      7,539        7,762    Other current assets      6,882        6,458                     Total current assets      73,286        57,653    Long-term marketable securities      106,215        92,122    Property, plant and equipment, net      16,597        15,452    Goodwill      1,577        1,135    Acquired intangible assets, net      4,179        4,224    Other assets      5,146        5,478                     Total assets    $ 207,000      $ 176,064                     LIABILITIES AND SHAREHOLDERS’ EQUITY:      Current liabilities:      Accounts payable    $ 22,367      $ 21,175    Accrued expenses      13,856        11,414    Deferred revenue      7,435        5,953                     Total current liabilities      43,658        38,542    Deferred revenue – non-current      2,625        2,648    Long-term debt      16,960        0    Other non-current liabilities      20,208        16,664                     Total liabilities      83,451        57,854                   Commitments and contingencies      Shareholders’ equity:      Common stock, no par value; 1,800,000 shares authorized; 899,213 and 939,208 shares issued and outstanding, respectively      19,764        16,422    Retained earnings      104,256        101,289    Accumulated other comprehensive income/(loss)      (471 )      499                     Total shareholders’ equity      123,549        118,210                     Total liabilities and shareholders’ equity    $ 207,000      $ 176,064                     Source: Apple Inc. (2013) The financial statement shows that the company’s assets grew from $176,064million in 2012 to $207,000million in 2003. In the same period liabilities increased from $57,854million to $83,431million (Apple Inc., 2013). Total liability and owners’ equity increased from $176,064million to $207,000million. Conclusion Apple Inc. is a global competitive company in the field of technology. Its capital and profitability has been growing since its establishment. They market products across globe using The Company is managed by competent managers and has maintained their focus on consumer interests. They hire both seasonal and permanent employees. Apple has integrated marketing mix to ensure their products are relevant to the consumer needs. However, the company has a great of ensuring their products are innovative enough to compete in the market effectively. References Apple Inc. (2015). Apple Press Info. Retrieved on February 7th 2015 from Apple Inc. (2013).The NASDAQ Stock Market LLC . Retrieved on February 7th 2015 from Hasan, R. (2013). Apple Inc. - An Analysis: PESTEL analysis, Porter’s 5 Forces analysis, SWOT analysis, Comprehensive analysis of financial ratios, and Comprehensive analysis of share performance of Apple Inc. GRIN Verlag, Lamido, K. (Nd.). The Analysis of Apple Inc. Marketing Mix. International Marketing. Retrieved on February 7th 2015 from NASDAQ , (2015 ). Apple Inc. Stock Chart. Retrieved on February 7th 2015 from Read More