The company apple was founded in the year 1976 by STEVE JOBS, Steve Wozniak, and Ronald Wayne to develop and sell small computers. Apple is a multinational company, The world’s largest information technology company and its also the third largest manufacturing of mobile phones. The headquarters is in California, Cupertino.
The company designs, develops and sells consumer electronics and software and also provide online services. The product of Apple are iPhone, iPad, Mac, iPod, Apple smart watch, Apple TV and the home pod.The software which Apple uses are macOS and IOS. Apple I was the first product of apple. The sale of apple I and apple II saw significant momentum and revenue growth for the company after this jobs hired few computer designer and a production line and later apple reached success in the year 1980. When the market for personal computers increased the computers made by apple saw diminishing sales due to lowers priced products from the competitors . jobs began to rebuild apple’s status by opening own retail store in 2001 and changing some of the hardware used in the computers and it again saw success in the year 2001.
In 2011 jobs resigned as ceo due to health complications and tim cook became the new ceo.It has 499 retail stores in 22 countries as of December 2017. The company is known for its high level brand loyalty.
PESTEL ANALYSIS OF APPLE INC :
The factors which may influence the economy or the industry by the government are known as political factors. They include tax policies, fiscal policy, trade tariffs etc.
Political factors of Apple:
The sales of the Apple products are more in other countries than the sales in America. More than half of the sales are from other countries and few of manufactured parts are product of Apple are from other countries like China , Korea, Ireland and thus if the political relationship of US and other countries are bad then it would majorly affect the company.
Economic factors are the factors such as inflation rate, interest rate, foreign exchange rate, economic rate and the economic growth patterns which would affect the company and these factors will affect for a long term. For example the pricing of the product would depend on the inflation rate of any economy.
Economic factors of apple
When Apple was termed as a luxury product the customers started spending less on these products and this is one of the economic factors
Since the value of the US dollar keeps fluctuating, Apple has purchased few foreign currency to minimise the economic effect on the company.
Social factors that are based on the social environment of the market such as cultural trends, demographic, population analytics and the buying trends. These are the social factors that could affect the business.
Social factors of apple
Gadgets are a important factor in the current world and thus Apple products have marked their presence on the international market.
As the lifestyle of the people have changed across the world the purchasing of luxury products have also raised. Owning such luxury products are also considered as a status symbols in many societies which has also increased the sale of Apple .
Factors based on the innovation of technology which might affect the industry favourably or unfavourably. The amount of technology awareness that a market possess.
Technological factors of apple
When the competition is high, the technology of Apple needs to be upgraded more often because the technology hold for a short time and thus to beat competition technology should be improved every now and then. One of the innovations of Apple which marked the demise of Walkman is iPod.
There are two sides to legal factors. One which is internal and other one which is external. The law which might affect the business environment and the policies to be maintained by the organisation example : consumer law, safety standards , labour law.
Legal factors of apple
Apple Inc has been a participant in various legal proceedings and claim since the time it came into operation. In the year 2009 Nokia sued Apple for the infringement relating to Nokia’s wireless technology. Apple has been in a a lot cases with other competitors such as Samsung.
Factors include all those that influence or are determined by the surrounding environment for example: tourism, farming, agricultural.
Environmental factors of apple:
Apple takes all the environmental factors seriously. It takes major steps to approach to environmental responsibility. At the end of the lifetime of products Apple disposes it properly and this is one of the commitment to the environment by Apple. Considering the environmental factors Apple uses its energy and power from renewable resources like wind , solar,hydro and geothermal.
PORTER’S FIVE FORCE ANALYSIS
MICHAEL PORTER developed the five force method of analysis in 1979. The five force exams the level of competition with an industry and also the business strategy development.
APPLE’S FIVE FORCE ANALYSIS
Competitive rivalry :
Competitive rivalry in simple terms can be “the number of competitors and their strength. The quality of their product when compared to my organisation. The suppliers and the buyers of the organization can go to the competitors if they are not satisfied with my deal
Competitive rivalry of apple:
Apple has stayed away from low end market to avoid the price based competition. Apple inc faces a large amount of competition in the market because of two major reasons. They are (1) high aggressiveness of competitors and (2) the switching cost of apple product is too low and also these are the external factors which affects the growth of the company
Bargaining power of the buyers is the capacity of the buyer to affect the pricing and quality of the product. The power of the company increases when there are more customers to the organization. Giving the customers satisfaction to their needs is the best way to keep the customers loyal to product and not choosing other products.
Bargaining power of apple:
bargaining power of apple is when the customers can change the brand easily apple ensures customer satisfaction thereby making them powerful in compelling .
Bargaining power of the suppliers:
The capacity of the buyer to affect the pricing of the product.The more suppliers the better it is for the organisation. The more supplier it is easy to switch to the cheapest alternative .the lesser the supplier the bargaining power of supplier increases.
Bargaining power of apple suppliers:
Apple has more than 200 suppliers of components for the product. Which is the biggest strength for apple because the company can switch to various suppliers. But this makes the suppliers weak so thus the bargaining power of the suppliers of apple is too low.
The module chip is made by apple for apple and thus it reduces the power of the module chip suppliers.
Apple reduce the power of suppliers foxcon by buying the equipments needed and allowing the equipment to be used only for apple products.
Threats of substitutes:
A product of a competitor which could be replaced instead of the company’s product at a low cost then the consumer would not deny that product and thus this could be a treat in the organization.
Threats of substitutesof apple:
There are many product in the market which is equal to apple product. But those product have low performance compared to apple product. And apple is still the monopoly because of its advanced features (i.e apple pay, fingerprint, face id and wireless headphone. Thus substitutes has weak force in impacting apples business
Threat of new entrant:
Today’s world is full of innovation and technology and thus it is easy for any organization to have threat of new entrance. The stronger features the product holds from the other product the safer the organization. The better reputation of the organization the longer it can fight with any of the threats that approaches the organization
Threat of new entrant of apple:
A new company cannot compete with apple because the capital requirement is too high, the cost of brand development is higher than the existing company where the initial expenses cannot be met by the company and the capacity of potential new entrant is too low in the market. So thus the threat of new entrant into the market for apple is less.
Pricing which can be affordable by every range of customers:
As we all know apple products is considered to be a luxury product because of its high pricing. It has sufficient features and quality but the competitors brands give the same product for lesser price. In a short run it dose not affect but in a long run it will affect the company. So thus it is better to launch products where every sector of people can afford for the product.
(i.e the other competitor brands have products starting from lower cost to the higher cost so the people from any sector can afford)
2. Should reduce complications :
As we all know apple is known for its user friendly software where all age group people can easily use apple products but nowadays apple products are getting really complicated. The main problem is in every product update the company is removing very eventual needs from their products. (For example in latest iPhone there is no port for headphone jack and in latest laptops like macbook there is no USB port which is a biggest inconvenient for all offices users.) So apple should understand the basic needs of their customers and satisfy their basic needs.
3. Should improve security and privacy:
In all smartphones we have security code or fingerprint to access the phone which is more secure for the smartphone. But apple has introduced a new software called face ID which is not really secure in daily usage. There are many chances of breaking this security so apple should make software which really helps their customers to keep their products safe from theft. So thus here the customer satisfaction for latest apple products may reduces.
4. User friendly software :
As we all know apple products only gives us quality software where. But the problem here is the software given to the customers is priced really high and the products can omens be purchased in app stores. So this has to be reduced. Because many customers are not ready to buy apple products because the software of the products should be purchased at a higher price. So this affects the sales of apple product. If apple reduces the price if the applications available in app store the sales of the apple products will increase. At the same time apple should maintain the customers satisfaction for their upcoming software and products.
The company posted the quarterly revenue of 52.6 billion that is increase in 12% from the year ago quarter. The company also hit aa major goal as the app store drove apple service diversion to a record high, the size of a fortune 100 company. And apple inc dose not take survey of their competitors which denotes that it is one of the leaning manufacturers of telecommunication products and other products. From the Research of PESTLE analyses
The operating environment uncovered from the PESTEL and Poter’s analyses is SWOT analysis:
Apples biggest strength is customers satisfaction and innovation.
The main weakness of apple products is the price of the product portfolio is really high compared to their competitors.
Apple has biggest opportunity is online market as one; online market is rapidly growing in the current society
There are many company which are growing in the market with good products and with a competitive price so this would be a biggest threat for apple inc.
https://en.m.wikipedia.org/wiki/Apple_Inc. Introduction of Apple
Pestle of apple
Poters five force
https://www.mindtools.com/pages/article/newTMC_08.htm poters five force
Poters five force
Apple’s current status