PEST Analysis for Apple - Assignment Example

This, in turn, results in the spread of cultures and technology and improvement in lifestyle and affluence. 

Apple can make use of the cheap labor and growing markets in newly developing nations like India, which were once considered poor. In the opinion of Schifferes (2007), Apple has become a virtual firm by shifting its production units to countries like China in Asia through outsourcing. In about its operating costs, the company has spread its product manufacturing to states like Korea, Ireland, China, and the Czech Republic. In addition, there are suppliers from Canada, Germany, France, Taiwan, Japan, Mexico, and Brazil (Apple Inc. 2014).

In addition, there is a thirty-fold increase the world trade since the 1950s as a result of this globalization (WTO, 2007). According to reports, Apple depends on countries other than America for about 58% of its total sales (Kane & Rohwedder 2010). Thus, globalization has a positive effect on the company’s performance.

Apple benefits from the modern lifestyle because the company has managed to present itself as a lifestyle brand (Saviolo & Marazza 2012). As Roumeliotis (2014) identifies, a lifestyle brand touches several emotional factors, ranging from social status, self-esteem, and desires. By creating such an image, Apple is now able to reap profit from the increasing number of tech-savvy youth who consider the possession of an Apple iPod and headphone as an important element of modern lifestyle. As Apple has a significant role in the online music market and cyberspace, the modern lifestyle is well-suited for the company’s growth. (Apple’s branding strategy 2012).

Technological factors

Technological factors are the biggest challenge for the company. Firstly, though the company leads the hardware sector by introducing new ideas every time, like a mouse, 3.5-inch floppy disks, touchpads, and trackballs, the company is a failure in introducing a software innovation that is as popular as that of Microsoft (Garfinkel 2001). Thus, the company needs to improve in the area of developing cutting-edge software to beat rivals like Microsoft.

Secondly, there are competitors like Samsung who cannot be underestimated. Jones (2013) points out that Apple exhibits its weakness by not having a mid-priced smartphone. Probably because of this, the company could upgrade only 26% of its customers from non-feature phones to iPhones (Jones 2013). Because of competition, technology only has a very short lifetime, and any failure to introduce new technology ahead of competitors will result in significant damage to reputation (Bajarin, 2011). The main reason behind the company’s existing superior position is its ability to outperform its competitors in introducing new technology. Therefore, the company has to invest a lot in research and development.

Thus, in total, PEST analysis of Apple Inc. proves that Political, Economic, Social, and Technological factors all influence the way the company performs. To retain its position as the leader in technology, the company needs to invest significantly in research and development.