PESTLE Analysis of Apple Inc - Case Study Example

Organisation in Context: Apple Inc. Introduction Started in 1976 by Steve Jobs, Ronald Wayne and Steve Wozniak, the aim of Apple Inc. was to develop and sell computers for personal use. Their aim was to create portable computers that would allow people to shift from the desktops computers in the offices and have them safe to use at home, and with more features to make the experience worthwhile. Apple has been doing this with so much success, but the competition has also been coming in fast to try to unseat them from the top of the table. They have managed to come up with brilliant ideas such as iPod products, Mac line computers, iPhone Smartphones and iPad tablet computers (Leavitt 2007: 12). These products have made the company receive so much reverence and recognition across the world for its superior products and gained it more revenues based on the sale of its products. However, it is important to understand that the company has not been working in a vacuum but has undergone various challenges in its political, economic, social, technological, legal and environmental interactions that have necessitated changes to its activities (Hasan 2013: 29). So many companies have come up with ideas to change the marketing space for Apple, something that challenges the company to maintain its position within the market for the sake of getting the best of Apple. More changes and challenges have shaped the way Apple has reacted to the situations around it, and that has created a new wave of innovations to meet the key demands of the society as a whole. PESTLE PESTLE is a good analytical tool that allows companies to understand their competitive advantage in the market, allowing them to make better choices when it comes to dealing with competition. It allows companies to make better choices, understand its opportunities, strengths and weaknesses, and see how it can capitalise on the growing markets across the globe (Chermack & Kasshanna 2007: 384). Understanding how Apple can benefit from this analysis will provide it with chances of beating its closest rivals such as Samsung, and Microsoft in becoming and remaining the best brand in the technological sector. The other aim of conducting this analysis is to ensure that the external factors are determined and the effects they pose to the organisation. It will also seek to exploit the changes taking place in the industry, and offer an analysis of how this will work out in meeting the core attributes of its competitors (Chermack & Kasshanna 2007: 386). Political Factors Political factors are some of the ideal factors to deal with and comprehend because they have a huge influence on the way things take place. The problem mainly arises when people do not take the core interest in understanding what the political climate means for this business. Apple knows that most of its products are in the US (Leavitt 2007: 19). This means that any weakening of the political climate and stability will hurt the sales and eventually the revenue of the same. This society has to make good choices, and this will define and determine the way things happen for the sake of growing the economy. Another important thing to note in this area is the fact that Apple manufacturers and a number of its suppliers are from outside the country (Russell & Cohn 2012: 145). Any instability in countries linked to Apple’s production and distribution system will affect the production levels greatly. This also implies having a better understanding of relationships between Ireland and the U.S, as well as the relationships with Cork, Czech and Korea (Leavitt 2007: 49). These create a majority of the suppliers that offer them the growing competitive edge in its production. The importance of this has been seen in the ability to compete with a company like Samsung, which has its production sites scattered across the world, and makes better choices of its partners by understanding the impact they have on its production line (Lüsted 2012: 133). The idea is to entrench the good values and make sure they can influence the world economy to prevent any bad blood between the partner countries (Fisher 2008: 65). Any instability means Apple will have a production glitch, and that will make customers lose faith in the entire company. That will affect its revenues negatively. Economic Factors The economic factors are the trickiest to deal with. They are the most formidable within the economy and affect companies directly (Lüsted 2012: 138). This implies having better ways of dealing with issues across the divide, while at the same time creating products that will appeal to a majority of the clientele from various economic backgrounds. The most important variables that Apple has to cautiously deal with are currency, inflation and recession. These weaken the economy and make clients apprehensive about buying or making any extravagant purchases with their hard-earned money (Fisher 2008: 66). They have to budget for basic needs, and that leaves their spending low enough to afford few luxuries. The important thing is to understand that the consumer spending power determines the main sales and revenues across the society and that will determine whether the society will make headways in achieving what is expected. Essentially, Apple hopes that people will have adequate resources and improved living standards to want their products and keep buying new ones after every release (Russell & Cohn 2012: 149). The fact that the U.S dollar keeps fluctuating is an attribute that bothers Apple a lot. It understands that the foreign currencies will have to measure the progress of the dollar and that will determine the stability of the currency in meeting its core attributes. The importance of this is to ensure that the company will seek measures to minimise any adverse economic downturns (Zylla-Woellner 2013a: 129). This has led to the purchase of foreign currencies, which has made it easier to minimise the effects of the economy while dealing with different issues that could jeopardise the company’s position in the global market (Hasan 2013: 190). Social Factors In every society, the main attributes that keep the people together define the reception new products get in the market (Lüsted 2012: 149). These common values and lifestyle patterns are very critical in determining the way business will shape up in the community. In many cases, people that tend to buy the Apple products are seen as those in the upper quartile of the social class, though the company is looking for ways of meeting the needs of all classes (Russell & Cohn 2012: 154). The brand image has been quite endearing across the world, and that has made it one of the most recognised. Being such a brand name requires years of shaping its values to meet the core demands of the society and assure them that it has its eyes on the changing aspects of the community (Zylla-Woellner 2013a: 132). The world today cannot live without gadgets, and Smartphones have become some of essential accessories in the world today. Apple knows this and continues to churn out products that will meet and satisfy the population (Fisher 2008: 67). The loyal clients know that the features in these phones will be useful in everyday life, and that has been shown by the increasing innovation and creativity in coming up with new products for every season (Schneiders 2011: 134). The purchasing power has stabilised in many economies, and the company uses this as the best way of creating a stronger purchasing power for all the luxury products in the world. Apple has managed to make the world believe that having an Apple gadget is a societal symbol that should be considered prestigious something the world has embraced (Zylla-Woellner 2013a: 135). Technology is one of the determining factors for companies operating within the technology sector. The problem with such a determinant is that in itself is a variable that can cause several changes within the system (Hasan 2013: 195). The important thing is that the technological factors can be archaic and obsolete within a few hours. The importance of keeping up with the changes means that Apple has to remain innovative to allow its engineers to work on changes to boost its position in the market. The problem is that some of the changes may seem copyrighted by other competitors, leading to litigations that could stall development (Lüsted 2012: 152). Coming up with unique products is something the company is looking into and has to make sure it achieves within the shortest time possible (Zylla-Woellner 2013a: 140). This will boost its position in the market and assure its clients that it understands the role of making innovations that will boost its features and improve the quality of its products. Such innovations will require more time, and the lapse between one production and the next has to be timely enough to maximise on the anxiety caused as people wait to acquire these new gadgets. Increasing Competitive Advantage In most companies, the managements has to come up with fool proof strategies that will provide time with the ability to handle wand deal with the issues that are important in their market. To assist Apple to deal with the growing competition and the uncertainty in some of the markets, it has to make sure that it analyses the market and the political factors within the country (Lüsted 2012: 154). Establishing better choices will harness the required energy and promote the company to build a stable production line in the country. This will also allow it to examine the government policies and establish whether they are ideal for the company (Schneiders 2011: 39). In many cases, the policies, regulations and legislations hinder innovation or limit the entry into that market. The management has to evaluate the sternness and leniency of these regulations as they apply to technology companies across the country (Zylla-Woellner 2013b: 152). This will allow it to provide a stable derivation of its rates to come up with budgets that will meet the needs of the company and fulfil its goals. When dealing with the economic factors, Apple has to conduct research and assist many of the available factors that could boost or affect the company negatively (OGrady 2009: 33). This will help the company gauge its projections in the market and make sure it attains its goals within the required timeframe. This will also allow investors to invest in it and raise it capabilities of entering new markets and expanding its production line. By meeting these criteria, Apple will be able to explore more opportunities across the world and meet its demands of being the best brand in the market (Hasan 2013: 209). Social factors are huge determinants of what Apple will have to deal with when making its next innovation. The company has to examine the social trends and project what changes might take place within the production period that could make the product obsolete before it reaches the market. The idea is to harness the production system that will variably enhance the production of products that have a lifestyle impact for the users while making life better at all levels (Zylla-Woellner 2013b: 169). This only happens if the company will take more chances at targeting different age groups to be able to run campaigns at anytime of the day without having to worry about the process of dealing with the peak and off-peak hours (OGrady 2009: 38). Improving the amount of money spent on the R&D department will be one of the best ways of coming up with technologies of the future. The projection will show what has been done and what can be done to make technology more applicable in everyday life. This only works if the company can provide the expected details and learn from past mistakes. The market has a way of teaching people what to expect and how to generate the expected reliability from all present members. The idea is to present the society with the required attributes and provide them with the innovative products that will symbolise prestige (Schneiders 2011: 143). In conclusion, the best way of determining a PESTLE analysis for Apple Inc. is by assuring its management that problems identified are solvable if the will to change is present. The idea is for Apple to have a better interaction with clients to provide the best. An analysis of the market requires feasibility studies and reliability is essential for everyone who provides leadership at all levels. Learning from mistakes will help shift the blame and spur growth based on lessons learned and changes made. References Chermack, T.J. & Kasshanna, B.K. (2007) "The Use of and Misuse of SWOT analysis and implications for HRD professionals", Human Resource Development International vol. 10, no. 4, pp. 383–399. Fisher, A. (2008) "Americas Most Admired Companies". Fortune vol. 157, no. 5, pp. 65–67. 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., London, GRIN Verlag. Leavitt, D. (2007) The man who knew too much; Alan Turing and the invention of the computer, London, Phoenix. Lüsted, M.A. (2012) Apple: company and its visionary founder, Steve Jobs, New York, ABDO. OGrady, J.D. (2009) Apple Inc, Boston, MA, ABC-CLIO. Russell, J. & Cohn, R. (2012) Apple Inc, Tbilisi, Goergia, Tbilisi State University. Schneiders, S. (2011) Apples secret of success - traditional marketing vs. cult marketing, Ann Habor, MI, Diplomica Verlag. Zylla-Woellner, J. (2013a) Global economic development within the scope of Apple Inc., London, GRIN Verlag. Zylla-Woellner, J. (2013b) Business analysis of Apple Inc, London, GRIN Verlag. Read More