LUBM301 Entrepreneurship Assessment - Analysis of Apple Inc. Business Model and PESTLE Analysis

This report provides an entrepreneurship assessment of Apple Inc. The report analyzes and critiques the business model of the organization, conducts a PESTLE analysis, and performs a SWOT analysis. The report also examines the external environment and industry landscape using Porter's Five Forces model. The report concludes with recommendations for the company.

LUBM301
ENTREPRENEURSHIP
ASSESSMENT

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Analyse and critique the business model of the organization......................................................3
Analysis external environment and analysis industry to examine business environment and
industry landscape.......................................................................................................................5
SWOT analysis of Apple...........................................................................................................10
Strengths..........................................................................................................................10
Weaknesses......................................................................................................................11
Opportunities...................................................................................................................11
Threats.............................................................................................................................12
CONCLUSION & RECOMMENDATIONS................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Entrepreneurship is the process and ability to establish and run a new business enterprise in order
to earn profit and revenue. It can also be termed as a procedure of starting a new venture or
business. A tendency of running your own business and making profit is termed as
entrepreneurship. The term entrepreneurship is broadly classified four types which are small
business entrepreneurship, large company entrepreneurship, scalable start-up entrepreneurship
and social entrepreneurship. There are many characteristics of an entrepreneurship like taking
risk, it also involves innovation, have leadership and visionary qualities, helps in creating
employment and also supports research and development (Terán-Yépez, and et.al, 2020). The
report will illustrate the entrepreneurship assessment of one of the valued company i.e. Apple
Inc. Apple Inc. is an American multinational technology company that specializes in customer
electronics, software and online services whose headquarter is in Cupertino, California. This is
one of the second largest valuable company and generates largest revenue. Also it comes under
one of the big five American information technology company. Apple Inc. Company deals with
many products like air pods, apple TV, apple watch, iPad, iPhone, iPod, Macintosh and home
pod. The report will highlight the business model, PESTLE analysis which includes the political,
economic, social, technology, legal and environmental factors of the Apple Inc. company and
also SWOT analysis will be explained including the strength, weakness, opportunities and threat
of the company and by this the effectiveness of the company can be identified(Pathiranage,
2019).
MAIN BODY
Analyse and critique the business model of the organization
A business model can be defined as the company’s core strategy that has been used for earning
profitability by doing business. Business models involves information like products or services

that the business plan to sell to their customers and also expected expenses. Business models are
important for both new as well as for the established business.it helps the organization to make a
planned strategy for selling the products or services to the consumers and doing some creative
innovation in the model so as to make them more influencing for the customers. There are two
levers of a business model which are pricing and the other one is cost (Clauss, and et.al, 2019).
The primary composition of the business model is value proposition as this describes the
products or services company offer to the customers and why these products are desirable for the
consumers or how these products are different from the competitor product. The plan also
involve some strategies that makes their products more beneficial in a way compared to the
competitor’s product. The business which have good success rate have business model which
understand the need of the customer by providing competitive cost and sustainable cost. It would
be better to revise the business model of the organizations so as to keep update with the market
demands. Similarly one of the most valued company “Apple Inc. also have a very great business
model which helps in making the strategies for selling their products in order to earn profit
margin and revenue (Müller, 2019). There are three core beliefs that the Apple Company have
and below are the following components explained.
Placing products above anything else:
One of the main aim of the company is to place the products above all. It has been studied that
the company have used the research and development labs for sure and there is serious cash
flow. The company is fully motivated in coming up with new and innovative products into the
target market. The company also have the confidence in serving their customers the best quality
products as compared to the competitors (Rajput, 2021). The aim of the company is to redesign
and put the efforts on the existing products for making them more innovative according to the
needs and requirements of the customer.
Staying focused to optimize the global presence of the company:
The value of the Apple Company always starts with the value they have and they always focus
on optimizing the global presence of the company. The company expand their business by using
the company ‘outlet across the world.one of the main reason behind the popularity of the apple
products is the money company is spending on the products. The company also aims on focusing
the different platforms that can be used for the apps and the content distribution on the apple
devices.

Incorporating a vertically integrated business model for better use experience:
The main aim of the apple business model is to incorporate the vertically integrated model that
helps the company in offering the best services to the customers and best user experience for
their users. Apple Company incorporates in designing and manufacturing its own operating
system, applications, software, hardware and services.by combining all these factors the
customers will able to get the best services for the products they are manufacturing(Podolny, and
Hansen, 2020). Because of the vertically integrated business model used by the apple company,
the company is able to manufacture and produce the top notch products that are considered to be
the best products in the target market and therefore these products are sold out at the premium
pricing.
By considering all the above points from the apple business model it has been cleared that the
company is focusing well in making strategies for making the business more profitable and
productive. Similarly the company also making money by selling hardware, software and online
services at a premium pricing (Amit, and Zott, 2020). There are many benefits of a business
model the target market is clear by having an effective business model, it helps in anticipating
the competitors , prepares a strategy and the product created also gets fixed.so identifying the
right and accurate business model helps in finding the right customers according to the product
developed by the company.
Analysis external environment and analysis industry to examine business environment and
industry landscape
The main purpose of porter's five forces model is to evaluate the overall competitive and
industry landscape of a specific business sector (Amrollahi, and Akhgar., 2018.). The five forces
involve threat of new entry, bargaining power of suppliers, threat of substitutes, rivalry among
the competitors and bargaining power of buyers. The porter's five force for Apple is a good way
to understand the different powers and dynamics of competition in any industry. Apple Inc. is a
successful organization with product range.

The threat of new entrants: For apple inc. the threat of new entry is low to moderate. Starting a
big organization within the industry is very expensive and it required finance, infrastructure,
marketing and manpower. To create a noticeable mark in gadgets and personal computers also
required strong brands recognition, which is an overhead. Suppose a new participant wants to
enter in smartphones and personal computer industry, so they need huge capital because they
spend most of the amount in the research and development and production to introduce its
product. In Apple's company the threat of new entry is low due to following reasons:
 High capital requirements to start a company
 New entrants capacity and potential development is a tough call
 High cost needed for brand development
Illustration 1: Porter's Five Forces Analysis,2022

Bargaining power of buyers: Factory responsible for this in porter's five forces for company are
both collective bargaining power and individual bargaining power. Collective bargaining power
is strong forces, however the individual bargaining power is weal or low because for company
losing a single customer or client does not affect the company revenue (Bruijl., 2018). In apple's
company the bargaining power of buyer is moderate to high due to following factors:
 Low switching costs
 High customer loyalty
 Few individual buyers
 Easy information access
Simplicity and innovation combined with good feature have build life easier for the customers.
The problem solving mindset helped company to create a significant brand by making a loyal fan
base. Thus, the quality offered by company decreases the bargaining power of customers or
buyers.
Threat of substitute product or services: This force help company to understand the power of
the substitute product in engage new customers. The substituted product have narrow fracture in
comparison to company products. An iPhone can perform many tasks for making life easier,
product is not only use for making call and clicking picture it has many more features. Because
of the advance features the customers would go for iPhone, and make substitute force weaker
(Goyal., 2020). Thus, the advance feature and quality of the product have Helps Company to
limit the threat coming from substitute forces. Therefore, the threat of substitute product or
services is low in case of Apple Company.
Bargaining power if suppliers: This forces determine the impact of supplier in the apple
company and its competitors. The force is low because of the many numbers of suppliers are
available in the market. Thus, easy availability of parts due to high competition between the
suppliers. Therefore, this resulting in reduced forces against the apple's company. The switching
cost for company is also low and not an issue for megacorporate. Supplier's bargaining power is
small issue for big company such as Apple and their competitors. Factors that contribute to make
weak forces of supplier’s powers are:
 A huge numbers of supplier
 The low force of large order size

Competitive rivalry: It determines the power of the market rivals and their impact on each
other. Companies such as Samsung, dell technologies, Amazon, Google etc. are the competitors
of the Apple. Therefore, the competition in this industry is high. The various factors that
contribute in this force are:
 Low difference in the products is another powerful forces
 Low switching cost for customer is another string forces
 High competitors in research and development and innovation is also a strong force.
Hence, this factors make the competitive rivalry high for apple. For Apple Company it is needed
to be more innovative and develop new unique products for their loyal customers. Apple has
good market stability and strong brand image which give competitive advantage to the company.
PESTLE analysis of the Apple Company
PESTLE analysis is a tool used to identify the threat of macro environment or external
factors of the industry environment. PESTEL components are Political factors, Economic
factors, Social factors, Technological factors, Legal factors, and Environment factors. Apple is
the world’s most recognizable and visible consumer electronics brands and cover whole market.
Political factors: For apple company the major political factors such as stable politics in
countries, increase free trade policies and trade disputes this is especially among the U.S. and
china (Çitilci, and Akbalık., 2020). Apple Company is generating calls for high corporation tax
in the US where inequality of income has become big political issue. Apple Company is depend
on Chinese manufacturing which create it vulnerable to political trouble in that country. The
major political issue of the company is war between China and US that may affect apples sales
and market share in china and therefore it makes a risk for the Apples potential growth. The cost
of identifying alternatives of manufacturing could be high for the company. Pandemic over the
world has led to an effect the political factors.
Economic factors: some economic factors which affect the apple company condition and
performance are inflation, wages policies, deflation, economic growth, unemployment rate etc.
As increase in wages cost of china could take the cost advantages of apple products. A strong US
dollar will increase exchange rate, and create it more expensive for company to do business in
successful market such as China and Europe (Greg., 2020). Some opportunities for company
expansion are rapid growth of economy of developing countries, increase disposable earning

between target consumers and economic stability of the developing countries. Apple company
products are good premium products so the target customers is mainly high end audiences.
Therefore, due to this pricing policies, the company face challenges sticking in the Asian market
that is because of great opportunists and high growth rate for a tech brand .
Social factors: Consumer expectation and behaviours are affected by this external factor.
Company business is subject to affect of socio-culture and social treads therefore this will cover
feature of such trends. Rising use of mobile phones which is the great opportunists to improve or
increase company sales and revenue (Van De Vliert., 2021). Apple has recorded its unique
quality all over the market segments, company music marketing strategies make strong brand
image. The sociocultural treads are important in the macro environment or remote such as:
 Increase the use of mobile devices
 International anti apple view
 Rising dependence on digital system
By the PESTLE analysis of Apple company the opportunists for growth and threats of business
are identified. Company always focus on the meet the need and requirement of the customers to
make strong customer relationship which give positive impact on brand image.
Technological factors: the technological external factors are growing mobile market, increase
technological mergers in businesses, improving technological capabilities of other company and
increasing cloud computing demand. Many high value products are provided at affordable prices
by other competitors which affects brand image and financial performance of an organization.
Apple company huge amount invested in product research and development, therefore the
company produce more innovative products which create good impact on company brand image.
The major technological opportunists for company is to expanding demand of the cloud
computing. The increase in cyber crimes create apple system less protected and take the
strongest competitive advantages that is reputation for good levels of safety and security.
Legal factors: The legal factors are the regulation and rules of the country. These factors can
become threat to the form of they nor followed the rules and regulation of the country. So the
agreement is needed otherwise company can face problems which will result bad brand image. In
digital edge the privacy regulation is important and therefore the government of countries put
pressure on the firms like apple (Léna., 2020). Apple also offer financial services that is Apple
Pay, it increases the level of litigation. Apple offer variety of products that covered by property

laws, such as music and software etc. for increasing revenue. So for apple company increase
privacy regulation can be opportunists and threat whereas legal issue against company policies
and practices will become threat.
Environment factors: Environment factors also affect the business, company is manufacture its
products in China where environmental and pollution side effects are concerns for apple
company that can influence manufacturing regulation and cost. Company is working for
technology solution by offering energy efficient products such as batteries, processor etc. with
less heat. Global warming is making climate change which can affect company supply chain.
Company is depend on data centre and internet infrastructure that lead increase the cost of
electricity in the future. For Apple company business sustainability trend and energy efficiency
trend are opportunity. So PESTLE helps to understanding the external environment that is
opportunity and threat of the company.
SWOT analysis of Apple
Strengths
Brand value
the clients and the customers are very much impressed by the high quality of the products by the
Apple company and also this has also offered an important brand recognition.
Innovative products
When the apple company develops a new product then after that they are already planning the
development of the next product.
Increased range of products
The company not only offers the phone but it also provides the watches, mac, iPod, iPhone,
apple watch, electric vehicles and the apple energy.
Design and technology
The design of the products of the apple company is always very innovative along with being very
elegant and classy.
Financial strength
The company announced the increase in their revenues and also in the earnings in the initial
quarter of the year 2015 (Li, 2021).

Weaknesses
Expensive products
The products of the apple company are of a very high cost and thus they can not be afforded by
the middle class and the low income people of the society.
Decrease in market share
The popularity of the products of the company is being declining because of the emphasize on
the iPhone and the iPad series.
Limited promotions and advertising
The marketing strategy of the company is very expensive and thus it is very limited in nature.
Limitations
The devices of the apple company can not be used with the other software and the technologies.
Limited product line
From the past ten years, the company is producing the similar kinds of the products with the
improved features.
Tracking allegations
the company was being alleged for tracking the location of the user with the help of the tracking
apps.
Other weaknesses includes the lesser choices or options in the designs of the phone, meeting the
expectations of the customer, unfair trade practices and the patent infringements and the
incompatibility.
Opportunities
Loyal customer
The demand of the products of the apple company is increasing as the customer are becoming
loyal to the products of the company.
Increased distribution network
As the customer are becoming more loyal then the need for the spreading and expanding the
distribution channel or network is also increasing.
Experienced professionals

The developers, researchers and the specialists of the company are very qualified.
Increasing reliance on technology
People are becoming more reliant on the technology especially the mobile phones and also they
are taking more interest in the portable electronics.
Other opportunities includes the lack of the environment friendly technology, the gadgets and the
accessories, increased globalization, employing the artificial intelligence, developing the self
driving software and increasing the music streaming devices (Magwizi, 2020).
Threats
Supply chain disruption
Due to the recent happenings, it has crated an adverse effect on the functioning of the company.
Technological changes
The company has also introduces some of the latest products so far which will help in keeping up
with the latest trends.
New competitors
The competitors such as the Google, Samsung and the Dell are the new competitors of the apple
company.
Imitation and counterfeits
Some of the companies imitate the products of the apple company and sell them at the relatively
same or low prices (Zaimy, 2022).
Other threats includes the outbreak of the corona virus, lawsuits, the market penetration,
backdoor protocol, competitive environment in the blue chip institutions, the potential of the
market for the smartphones and the tablets.
CONCLUSION & RECOMMENDATIONS.
From the above report, it has been concluded the business model canvas which analysed
and critiqued the business model, the external environment that is the PESTLE analysis and the
analyse industry which is the Porter Five Forces for the analyses of the business environment and
the landscape of the industry. Moreover, it also discussed the SWOT analysis of the Apple
company. The internal and the external factors of the Apple company described that the
company have major strengths for the resolving of the weaknesses of the company like the

extension of the distribution network of electronics among the customers. In addition, the
company also used the strong image of the brand and the faster innovation procedure in order to
create and launch the latest technology lines of the product in a successful way. Although, the
company had to face some of the threats of the increased and the cut throat competition and the
imitation which are also hindering to be in the global competition for the electronic products for
the consumer, the hardware and the software products of the computer system and the
distribution services of the digital data through the online mode (Rajput, 2021).
On the basis of the strategic problems that are being outlined in the SWOT analysis of the
Apple company, it would be recommended to be in the cut throat and the increased competition
and innovate and develop the latest products on a regular basis. The technological innovation
decreases the harmful effects of the imitation and also it would be recommended to the Apple
company to improve the automation of the process of its production and accordingly encourage
the automation of the manufacturers who are on a contact basis as a way acknowledging the
increasing costs of the labour. Some other recommendation would be to develop the partnerships
with multiple number of the distributors in order to enhance the full market reach of the
electronic production of the consumer of the particular company. IT is necessary for the Apple
company for maintaining the product innovation and the design thinking for being in the top
position in the competition and the fastly modifying industry of the technology. Also, the
company must also comprehend the modifications in the technologies, demographics and the
demands of the consumer which have given the outcome in the latest demands and the multiple
expectations from the consumers. That is why, the company should be able to maintain the
design thinking and the innovation of all of its services and the products in order to keep it
reputation (Vasilaki and Tsakalidis Jr, 2019).

REFERENCES
Books and Journals
Terán-Yépez, E.,and et.al,2020. Sustainable entrepreneurship: Review of its evolution and new
trends. Journal of Cleaner Production, 252, p.119742.
Pathiranage, J., 2019. Organizational culture and business performance: an empirical
study. International Journal of Economics and Management, 24(2), pp.264-278.
Clauss, T., and et.al, 2019. Strategic agility, business model innovation, and firm performance:
an empirical investigation. IEEE Transactions on Engineering Management, 68(3), pp.767-784.
Müller, J.M., 2019. Business model innovation in small-and medium-sized enterprises:
Strategies for industry 4.0 providers and users. Journal of Manufacturing Technology
Management.
Rajput, R., 2021. CONSUMER PERCEPTION TOWARDS THE APPLE COMPANY.
Podolny, J.M. and Hansen, M.T., 2020. How Apple is organized for innovation. Harvard
Business Review, 98(6), pp.86-95.
Amit, R. and Zott, C., 2020. Business model innovation strategy: Transformational concepts and
tools for entrepreneurial leaders. John Wiley & Sons.
Amrollahi, A. and Akhgar, B., 2018. Analyzing open source business with Porter's five
forces. International Journal of Computer Theory and Engineering. 5(1). p.162.
Bruijl, G.H.T., 2018. The relevance of Porter's five forces in today's innovative and changing
business environment. Available at SSRN 3192207.
Çitilci, T. and Akbalık, M., 2020. The Importance of PESTEL Analysis for Environmental
Scanning Process. In Handbook of Research on Decision-Making Techniques in
Financial Marketing (pp. 336-357). IGI Global.
Goyal, A., 2020. A Critical Analysis of Porter’s 5 Forces Model of Competitive
Advantage. Goyal, A.(2021). A Critical Analysis of Porter’s, 5.
Greg, R., 2020. Strategic Review on Apple Inc Marketing in the United States of
America. Journal of Marketing and Communication. 3(2). pp.47-61.
Léna, Y., 2020. Analyse PESTEL-Apple. Publications Études & Analyses.
Li, Y., 2021. Apple Inc. Analysis and Forecast Evaluation. Proceedings of Business and
Economic Studies.4(4). pp.71-78.
Magwizi, C.N., 2020. An investigation of operational management in the organization, on the
example of the Apple Computer, Inc (Master's thesis, Тернопільський національний
технічний університет імені Івана Пулюя).
Rajput, R., 2021. CONSUMER PERCEPTION TOWARDS THE APPLE COMPANY.
Van De Vliert, D., 2021. Apple iPhone: A Market Case Study. MacEwan University Student
eJournal. 5(1).
Vasilaki, M. and Tsakalidis Jr, G., 2019. Apple Inc. Equity Valuation.
Zaimy, N., 2022. Apple Inc./Nur A’fyfah Zaimy.

Online referencing
WindershareEdrawMax,2022. [Online]. Available
through:<https://www.edrawmax.com/article/apple-porters-five-forces-analysis.html>.