PESTLE ANALYSISCASE STUDY

ABSTRACT

This analysis investigates the current state of Apple Inc., the American multinational giant and predicts the future advancements The most significant external factors of Apple have been analyzed with the help of PESTLE tool Secondary information has been gathered to get an insight into the matter The outcome of the study indicates Apple’s remarkable growth in information technology industry in the coming years.

Introduction

This renowned hardware and software company is best known for designing, developing and selling consumer electronics, computer software and online services.Steve Jobs, Steve Wozniak and Ronald Wayne are the founding members of Apple Computer, Inc., which was later renamed as Apple Inc in January 2007 Due to its innovative marketing strategies and unique business model, this recognizable consumer electronics brand continues to enjoy fame as world’s largest information technology company.

INTRODUCTION

MATERIALS & METHODS

To conduct this analytical study, the required data is gathered from various published sources and case studies written on Apple Inc One method of analysis has been employed to evaluate the business framework of Apple Inc PESTLE analysis assesses the key external factors (macro environment) that the company must address to keep its leadership position

MATERIALS & METHODS

PEST Analysis:

• PEST is widely used analysis tool to analyze the Political, Economic, Socio-Cultural and Technological changes in business environment

• PEST analysis is used not only to understand the external environment, but also to adapt business strategies for achieving business goals.

PEST ANALYSIS

PESTLE Analysis:

• To make the analysis more comprehensive, legal and environment factors have been added which makes PEST,

• P E S T + L (legal) E (Environment) = PESTLE analysis • It adds two more different aspects to see the whole

environment and keep a track while achieving certain goals.

PESTLE ANALYSIS

Dimensions of the Model: DIMENSIONS OF THE MODEL

Political factors:

• Political pressure on the company • Limitations on import • Political insurgence in different countries • Stability of government • Company’s approach on recent issues

POLITICAL FACTORS

Economic factors:

• Impact of recession • Exchange rates • Cost of labour• Recent trends in stock market • Rates of growth • Rate of inflation • Job Opportunities

ECONOMICAL FACTORS

Socio-cultural Factors:

• High-status lifestyle • Buying habits • Brand acquisition • Age distribution • Standard of education • Consumer mind-set

SOCIO-CULTURAL FACTORS

Technological Factors:

• Entry to Chinese market • Product life cycle • Screen size • Tough competition • Cyber crimes • Restricted customer base • Attention to research and development

TECHNOLOGICAL FACTORS

Legal Factors:

• Increasing privacy regulations (telecommunications regulations)

• Intellectual property law • Employment law • Breach of law • Consumer law

LEGAL FACTORS

Environmental Factors:

• Air and water pollution • Population • Greenhouse effect • Global warming • Increased electricity cost • Transoceanic shipping

ENVIRONMENTAL FACTORS

Aim of the analysis:

• The analytical study is conducted to evaluate the relation between Apple’s success and external and internal factors

• This analysis unravels the macro environmental factors that influence organizational goals and business strategies

• It also identifies the changes that the organization should adapt to do better in competition.

AIM OF THE ANALYSIS

Political Factors:

• Apple faced an awkward situation when suicide cases were registered against its supplier. This company was held responsible for making its employees work for longer hours

• Owing to the political insurgency in China, Apple has faced increased labour and manufacturing cost

• There is always a risk of terror attacks in its base country, America and the countries that it serves.

POLITICAL FACTORS

Economic Factors:

• Apple’s economic growth touched a new low due to the global recession in 2013

• Changes implemented in Europe’s economy have affected apple directly. It led the company to 16% less growth in third quarter of 2012

• The company had to suffer when the inflation rate was increased because it possessed a large amount of cash.

ECONOMICAL FACTORS

Social Factors:

• Apple has become simply a symbol of social status due to its extremely high prices

• Owing to the growth in consumer spending in third world countries, Apple sees a big potential of business

• Apple chooses China for manufacturing instead its home country due to the low labour cost. It could, however, limit the product appeal.

SOCIAL FACTORS

Technological Factors:

• Apple got entry to Chinese market under the agreement that Apple products would be made available in both China Mobile and Apple retail stores

• Apple had invested 3% of the net sales (which is more or less $8.07 billion) on R&D (research and development)

• As consumers started preferring larger screen, Apple is now forced to increase its screen size.

TECHNOLOGICAL FACTORS

Legal Factors:

• US government imposed a legal ban on the import of some of iPhone parts, which are brought back later

• Apple could engage in litigation as it started offering financial services through Apple Pay

• The company is exposed to the threats like piracy and litigation as a large number of people use its products.

LEGAL FACTORS

Environmental Factors:

• Apple has been forced to spend money on discarding used and non-used electronic junk as it can cause environmental hazards

• Environmental issues caused by manufacturing facilities in China has become a growing concern for Apple

• China’s attempt to minimize the environmental side effects could lead Apple to increased manufacturing costs.

ENVIRONMENTAL FACTORS

Conclusion:

After evaluating all the factors in PESTLE analysis, it can be predicted that Apple will

continue to hold its top position in information technology industry. The reason being it boasts of adaptive qualities to perform well even in a

challenging environment.

CONCLUSION