This is the detailed PESTEL analysis of Apple which is important for understanding the external factors that affect the industry’s growth and profitability.
Apple is the leading company, which is recognized for its consumer electronic products. The company has strong revenue growth and also offers high return on the investment, which can make it consumer favorite company for making heavy investment. It has introduced new designs and it has prepared new electronic devices, like tablets, smart phones, televisions and music players. The firm has prepared the operating system of all its devices and has the proprietary software.
Apple has started its business for the entertainment and information for the clients. This is the world largest online retailer of music, software solutions and streaming video with the use of applications for the smart phones. This brand has done wonderful business and earned huge amount of revenue through introduction of its products and it also got the excellent profit on the sale of its products.
Political Factors
Apple is the highest US technological company, which has earned huge amount of revenue and it has the higher corporate taxation in US to make the political issue of inequality in income. The social and political situation in China can disturb the manufacturing cost and it also disrupts the Chinese imports in US to boost the manufacturing of products in China. The cost of the alternatives to the manufacturing products in China can make it high for Apple.
The political situation in China makes this company the major target of nationalism and anti-Americanism in china and the company lose the market share there. Apple has to face the most important political external factors like improvement in the free trade policies and stable and consistent politics in the developed countries. The additional free trade policies can increase the distribution of its products in different countries across the world. The political opportunities can help this company to enhance its working capacity and also improve its performance in the remote and macro environment.
Economic Factors
There is consistent increase in the labor costs in China, which has reduced the cost advantage on the products of Apple. There is no increase in the income of the middle class people, which has reduced the potential market to get higher end consumer products with the market of the Apple products. The company is getting the benefit on the import of the products, which is the big economic factor and quick growth in economic development of the advanced countries can be great opportunity. The developed countries have the stable economies, which needs to introduce their latest products and gain profit.
The company needs to focus on the high economic growth rates of different Asian countries, which can help in increasing revenue through sales in the foreign markets. The company should pay attention on the speed and effectiveness, which are important to develop their products and help in competing with their rival companies in the international markets.
Social Factors
There are great social effects on the business of the company and they need to know the consumer behaviors and expectations. The people need to know the social or sociocultural factors, which are most significant in the remote and macro environment of the company. The number of the clients are increasing, who use mobiles for calls and SMS and for the social media through use of internet on these handsets.
The company is going to use this opportunity with the introduction of iPad, IPhone, and Apple Watch and they also use social media as the demand of the digital devices is also increasing. Now the company has great opportunity to show its social and sociocultural dimension for the environment of this business.
Technological Factors
The technological external factor of the company is made to provide the opportunities to use the latest technological developments. The current technologies and technological changes can affect the conditions of business. These technological factors are provided with cloud computing trend, integration of new technology and growing apps market. With the growing popularity of cloud computing, Apple is providing the opportunity with the provision of cloud friendly devices and apps.
The company has provided the technological integration of the devices, which gives the opportunity to continue its strategy and these products are connected with each other. Various new technological developments and advancements, the products of this company are becoming popular and Apple is now growing is App Store. Now apple is in the perfect position to take advantage of these opportunities with the technological advancement in the business environment.
Environmental Factors
In Apple, various ecological and environmental factors provide the opportunities to show the ecological concerns and also their impact on the business. The environmental external factors are considered very important, which are business sustainability trend, labor rights trend and product energy efficiency trend. Apple has started the recycling process to create the sustainability in the business and get the opportunity to addresses it. the company looks for the technological solutions for the improvement of energy efficiency of products of Apple through processors, improved batteries and components, which are used for emitting less heat. Now apple took the step to improve the perception of the customers through their products and improve the practices of the employment with the help of its supply chain. Now Apple is working on the right track and it is correcting the environmental factors.
Legal Factors
The legal external factors are used for the creation of threats to the business. It shows that it has the great impact on the business to follow the laws and regulations. The most significant legal factors are included with increasing privacy regulations and increase in the regulations for telecommunications. There are some privacy issues with the digital technology and more privacy regulations are necessary to impose on the business.
This business can create new challenges for the development in the products and it can improve the features of the products and it also protects the privacy of the consumers. Various governments are taking step in imposing the strict telecommunication regulations, which can limit the usability of the products of Apple potentially and it can emphasize the privacy protection and the regulatory compliance of the products.