Apple's SWOT and PESTLE Analysis

This assignment presents a comprehensive SWOT and PESTLE analysis of Apple Inc. It examines Apple's internal strengths and weaknesses alongside external opportunities and threats. The PESTLE framework analyzes the political, economic, social, technological, legal, and environmental factors impacting Apple's operations. The report highlights key challenges and opportunities facing Apple in the competitive tech landscape.

HB401
Business and the Business Environment
Tutor: Joni LEE
Student: Wang Pui HAU
Start Date:10 March 2020
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Submission Date:24 April 2020
Contents
Page
I. Introduction
3
1. Size, Scope, Nature, Objectives, Advantages and Disadvantages of
different sector: Private, Public and Voluntary Sectors
3
II. Public Limited Company- Apple Inc.
6
1. Organizational structure of Apple
7
2. Apple Inc.-the myth of electronics
8
3. Matrix structure of Apple Inc
9
III. SWOT analysis of Apple
10
IV. PESTLE analysis of Apple
13
V. Conclusion
16
References
2

I. Introductions
1. Size, Scope, Nature, Objectives, Advantages and Disadvantages of
different sector: Private, Public and Voluntary Sectors
Private Sector
Private sector is part of economy, owned and controlled by private individuals. The
private sector has a goal of making profit and employs more workers than the public
sector. In most free economies, the private sector makes up a big portion of the
economy, as opposed to nations that have more state control over their economies,
which have a larger public sector. For example, Korea has a strong private sector
because it has a free economy, while North Korea, where the state controls many of
its corporations, has a larger public sector. (North Korea is an isolated, tightly
controlled and dictatorial command economy. The country’s economic system is
planned centrally and coordinated by the government.)
The main goal pursued by the private sector is to maximize profits. They will achieve
their goals by choosing the right organizational structure. At the same time, every
financial data must be clearly recorded. If the data is not satisfactory, there is a chance
of causing losses or even failure.
we can see there is many types of private sectors, both of them have their own
advantages and disadvantages.
Sole Trader
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Sole Trader is individual small establishment with one owner and the owner accepts
full responsibility for the liabilities of the business. Advantages of sole trader is easy
to set up-no legal formalities and owner has complete control and keeps all profits.
Sole Trader has a big disadvantage is “it has unlimited liability.” all of the owner’s an
asset are potentially at risk while faces intense competition from bigger firms, for
example, clothing retail.
For example, I am the boss of a sole proprietorship company. When the economic
environment is good, I can get all the profits alone. However, when the economic
environment is bad, I have to bear all the risks alone. The risk is not just profiting the
decrease is more likely to be debt.
Partnership
Partnership is a group with usually 2-20 persons. In some partnerships, there can be
more than 20 partners. E.g. lawyer, doctors. In the partnership, partner may specialize
in different areas of business management and they can share idea while making
decision.
But, same as private sector, partnership has unlimited liability for all partners. Also,
partnership share profits with partners.
YIP, TSE & TANG, Solicitors was founded in 1994 and has a team of 30 lawyers to
provide clients with comprehensive legal services. It is now the top 5% law firm in
the Hong Kong legal profession. In this law firm, each lawyer has his own area of
expertise. They achieved a division of labor. When they encounter difficulties, they
will share their views together. When the business is good, everyone will share
profits. When the business is not good, they will share the risk together.
Private Limited Company
Private Limited Companies owned by shareholders and is run by a director or Board
of Directors. The shares can’t be sold to the public. For example, Dragages. Dragages
is a well-known private company in the construction industry. Shares can only be
transferred privately and all shareholders must agree to the transfer. The advantage
is shareholders have limited liability and more capital can be raised as there are no
limits on the number of shareholders.
Profits will be shared among more members. This is the biggest disadvantage. This
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means that even if the company earns a lot of benefits, in the end each shareholder
may only share very little.
There are certain legal procedures for establishing a company. If you want to establish
a private limited company, you must complete all the complicated procedures. In
contrast, self-employment can be completed with a simple registration and
registration fee.
Public Limited Company
Public Limited Company is a company that issued shares. It shares are available for
sale to the general public. MTR Corporation may be the public limited company with
the largest number of shareholders in Hong Kong. The Hong Kong government holds
75% of the shares, while the remaining approximately 25% is held by investors
including Hong Kong citizens. Huge amounts of money can be raised from the sale of
shares to the public. Production costs maybe lower as firms gain economies scale.
The setting up costs can be very expensive. And there is a chance for outsider to take
control of the company because anyone can buy shares.
Public Sector
Public Sector is part of economy which is owned and controlled directly by the
government or country for the benefit of the whole society or economy such as Public
Library, Post Office and Hospital Authority. These services benefit not only
individuals but also society. The statute setting up the corporation identifies the
powers, duties and responsibilities of the organization and its relationship with the
government department which oversees its operations. “Linking People, Delivering
Business” purpose of Hong Kong Post. In early Hong Kong, businessmen were the
main users of the position. But they often complain about the lack of effective postal
services. Therefore, the Postal Department was established.
Public Sector owned and controlled directly or indirectly by the government for the
benefit of the whole society. The objective of public sector is to provide services more
than earning money and collecting profit. They often overlook gains.
The advantage of Public Sector is that provides some of its services to all consumer,
and faces little competition (e.g. Hong Kong Exchanges and Clearing Limited). Many
public sector businesses have a unique position in the market. For example, the
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Towngas has no competitors of the same type in the market.
Of course, Public Sector also have disadvantages. As there's no profit motive, there's
often a lack of innovation. Public sector always making decision slowly. They can be
difficult to manage and control. They have to spent time on meetings and
communicating with staff.
Voluntary Sector
The Voluntary Sector is usually comprised of organizations whose purpose is to
benefit and enrich society, often without profit as a motive and with little or no
government intervention. Unlike the private sector where the generation and return of
profit to its owners is emphasized, money raised or earned by an organization in the
voluntary sector is usually invested back into the community or the organization
itself. They aim to create social wealth rather than material wealth. Voluntary sector
raise money from public and use it to run the charity. E.g. SPCA (The Society for the
Prevention of Cruelty to Animals), Mothers Choice (support to the many pregnant
teenagers who had no one else to turn to quickly expanded to providing nurturing care
to children without families, and to be a voice for them to be in a family)
The goal of the voluntary sector is to improve and give back to society. They value
social wealth more than material wealth. They provide money and various support to
those in need (e.g. animal protection, environment issues and support for the disable)
Nonprofit organizations can exist long after their founders leave as long as their
purpose stays relevant. This is the biggest advantage. Also, nonprofits do not pay
taxes, so all earnings can be cycled back into the organization to improve it.
Voluntary Sector must maintain its financial transparency and let the public know
whether their donations are worth their money. This allows anyone may request
copies of any nonprofit’s filings and review their expenditures, salaries, and income.
II. Public Limited Company- Apple Inc.
1. Organization structure of Apple Inc
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Apple's organizational structure is basically based on the company's CEO. Apple
follows a vertical organizational structure, and the CEO makes the main decision.
Then, the manager leads his department. Team members with various functions, such
as members who specialize in designing products (here we will subdivide different
types of products-IPAD, IPHONE, etc.)
Although the organizational structure may seem complicated, it is simple in nature.
This collaborative structure allows low-level employees to communicate with mid-
level and senior managers, thereby enabling the company's business strategy to be
effectively and fully implemented. High-level ideas can be completely passed to the
middle level, and then passed from the middle level to the lower level. The upper-
level decisions can be effectively executed.
Apple's organizational structure has always been regarded as a model of success. It
allows each manager to focus on his professional field. Managers can fully allocate
resources in their field. By effectively allocating resources and rationally using
resources, companies can achieve economies of scale and can use fewer resources to
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obtain greater benefits.
Apple's organizational structure can help managers determine the company's strengths
and weaknesses, and develop appropriate business strategies.
2. Apple Inc.-the myth of electronics
Apple Inc. which is a signature company in Technology and its business includes
designing, developing and selling consumer electronics, computer software, online
services and personal computers. As of June 2019, Apple has 506 retail stores in 24
countries, as well as online Apple Stores and iTunes Stores. The iTunes Store is the
world's largest music retailer. Apple Inc. is the most publicly traded company by
market value.
Purpose of Apple Inc.
Apple is dedicated to the empowerment of man—to making personal computing
accessible to each and every individual so as to help change the way we think, work,
learn, and communicate. That was Apple's original mission statement, according to
marketing guru and Interbrand Pacific founder David Andrew.
Apple Inc.’s Mission Statement and Vision Statement
Apple mission statement is “to bringing the best user experience to its customers
through its innovative hardware, software, and services.” Tim Cook, Apple’s current
CEO, stated this as the company’s mission statement and included it in the 2018
annual report. Through their mission statement, Apple highlights that it exists to offer
its clients the best service that it can. The statement also describes how the company
intends to achieve this.
(https://fourweekmba.com/apple-mission-statement-vision-statement/)
In this current mission statement, the company highlights the scope of its operations
and how it exploits these to satisfy the needs of its client base. While focusing on the
dynamic technological changes over time, Apple stays clear that impacting positive
change through innovation is its central objective. The following components arise
from this mission statement. Best user experience, Improving the lives of people,
Empowerment of the public and Top-quality products.
Apple vision statement is “We believe that we are on the face of the earth to make
great products and that’s not changing. “Through this statement, the company
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highlights that they are always determined to deliver quality products for its clients.
The statement also points out that they intend to do so for quite some time. It gives a
detailed account of how the company approaches its operations to position itself as
the dominant player in the sector it operates in.
3. Matrix structure of Apple Inc
(For example: Project A is iPhone, Project B is iPad and Project C is Mac.)
This matrix chart shows relationships between iPhone, iPad and Mac. Apple Inc. is a
product-based company. These product lines are associated with human resource
utilization and business processes based on product-based divisions, which are a
characteristic of Apple Inc.'s corporate structure. The Mac product line includes
desktop and laptop computers of various sizes for different market segments. On the
other hand, the iPad and iPhone are mobile devices with some functions similar to
those of Mac products.
Apple allocates resources for each product in response to the market's response to the
product. For example, under the premise that Apple already has a certain mobile
phone market, they will choose to invest more resources to develop iPad. This is
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because the success of the mobile phone market may only lead to a small increase in
its turnover. This is far less than what you can earn by developing new markets.
Moreover, the sooner you enter the market, the better you can establish a brand effect
and a dominant position. Reality also proves that Apple's strategy is correct. When
people mention tablets, they usually mention the iPad first.
Therefore, under the leadership of each professional manager, we will see employees
responsible for different products at the same time.
The employees of each product must report to the managers of multiple different
departments at the same time and handle their requests. This of course can cultivate a
full range of talents, but it also increases the workload and pressure of employees.
When employees report to manager A, they must also be accountable to manager B,
which will slow down their work progress because they cannot focus on specific
tasks.
III. SWOT analysis of Apple
The attempt to improve the corporate strategy development process has fostered a
range of approaches which have enjoyed different levels of support and popularity
over time. One of the most popular is the SWOT analysis.
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The SWOT Analysis of Apple Inc will analyze the Strength & Weakness of,
Opportunities & Threats for Apple. It provides a broad understanding to the
company's strategic situation.
Strength
In the Strength of Apple section, we have found many of strengths of Apple Inc. in
this part, we can say that as the most valuable company Apple has every criterion to
be the best one.
Apple ’s biggest advantage is its global brand. Apple stores all over the world include
China, Britain, the United States, France, Canada and other countries. Innovative
technology and its high-quality after-sales service make it Has always been the first
choice for buyers of smart products. Moreover, Apple has also implemented Liam
technology to make sustainable development possible. Liam is an iPhone recycling
robot that can disassemble and dissect the iPhone. Make most of the iPhone Parts can
be reused.
Weakness
Apple's products have always been regarded as luxury goods. The high price
discourages many buyers. This is Apple's biggest weakness. And Apple has not held
any price-cutting sales activities, it can be said that it lacks marketing strategies. No
matter how good the product and after-sales service is, if there is no buyer or user, it
will be a fantasy.
In addition, Apple's products are always independent. The most popular system in
the world is Android, and Apple insists on using its own IOS system. This means that
if you want to buy Apple products, you need to be familiar with the IOS system to
understand how to use the system. Undoubtedly, this will allow many people who
are worried about trouble to enter the market of its biggest competitor, Samsung.
Opportunities
For many years, Apple has dominated the technology field. They provide high-quality
and cutting-edge technology that can bring breakthroughs to the customer
experience. Their customer retention rate is as high as 92%. Apple can always rely on
the power of the Internet to obtain future opportunities to win new customers and
form new alliances.
Apple researchers, developers, and product experts are a team of highly qualified
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professionals who have many years of experience in consumer product brands. As
the team expands, Apple can continue to create new opportunities.
Currently, Apple has a very limited distribution network and leaves room for minimal
growth. If Apple focuses on building a huge distribution network, it can generate
higher revenues and sales. In addition, companies can benefit from diligent
marketing and promotion. So, Apple has a chance to expand its distribution network.
Although Apple has used Liam technology to achieve sustainable development, so
far, Apple has not released any product created using green technology. This means
that in the future, as long as Apple releases this type of product, Will get a further
opportunity.
Threats
Apple's biggest threat has always been from China. As long as Apple releases new
products, counterfeit products and similar products will usually appear in China in
the short term. This not only directly damages the interests of Apple, but also
indirectly leaves the impression of potential customers with poor quality of Apple
products. For example, within two to three days after the launch of Air Pods PRO,
counterfeit products appeared.
In addition, the Sino-US trade war also hit Apple. The two countries have increased
the tariffs on each other ’s imported products, thereby increasing the overall cost of
the products. These costs will ultimately be passed on to consumers.
The outbreak of coronavirus also hit Apple. Apple is highly dependent on China in its
manufacturing and supply chain. China has always been a production base for Apple
products. Most parts are produced and assembled in China. With the outbreak of the
epidemic, China's production line had to be shut down.
Conclusion
Through SWOT analysis, we clearly see the advantages and disadvantages that Apple
has. Even though there are many problems, Apple will still be a company with
development potential in the future.
VI. PESTLE analysis of Apple
PESTEL is a detailed analysis of the macro environment or the entire environment.
PESTEL analysis determines the strategy of the manager and formulates the strategy
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according to their market conditions and future development direction. PESTEL
analysis is composed of components that affect the business environment, including
Political factors, Economic factors, Social factors, Technical factors, Environmental
factors and Legal factors.
We identify strong relationships between environmental factors such as labor
availability, competitive hostility, and market dynamism and the operations strategy
choices encompassed by competitive priorities. The data also indicate that, when
faced with the same environmental stimuli, high performers choose to emphasize
different competitive priorities than low performers. In addition to exploring
substantive questions about the importance of the environment in explaining
operations strategy, this research also demonstrates that environmental variables can
provide effective controls for industry effects in multiple industry empirical studies in
operations strategy.
Political factors
Politics has always been closely related to the economic environment. Government
policies directly affect the decisions made by a country, such as tariffs. In Apple ’s
macro environment, the most important political factors have brought many
opportunities. Improvements in free trade policy and evolving political stability may
be Apple ’s opportunities. Over time, a better overall free trade policy will be
formulated, which will increase the chance of distributing more products globally.
Considering the reduction of political issues that affect the business activities of these
countries, Apple will gain more opportunities for growth.
Despite these possibilities, the political externalities of trade disputes, especially the
trade dispute between China and the United States (2018 ~ 2020), the company’s
potential growth and the global sales revenue of its products (such as consumer
electronics) are almost Every Apple product is made in China, so it is regarded as a
Chinese commodity in international trade. At present, the United States has imposed
tariffs on Chinese goods worth US $ 250 billion, but does not include the
aforementioned Apple products. However, the tariff plan for the remaining US $ 300
billion of Chinese goods has been previously formulated. If implemented, this may be
equivalent to the annual volume of US imports from China. By then, Apple products
will inevitably be spared. Obviously not good news.
Not only the vast majority of hardware products, including the iPhone, are produced
in China, but global market share is also very important to Apple ’s global market
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share and growth rate. China ’s iPhone sales account for one-third of sales. If the
company tries to find alternatives in China, it will cost the company more and lead to
higher prices for Apple products. At the same time, with the development of Chinese
nationalism, Apple may become a potential target of China's anti-Americanism,
resulting in a decline in market share.
Economic factors
Economic factors are related to all factors that affect the economy and its conditions.
For example, interest rates, inflation rates, fiscal policies, and imports and exports
affected by exchange rates. All these factors will determine the direction of economic
development. Therefore, companies like Apple will analyze economic factors based
on their environment in order to formulate different strategies.
The latest data shows that China's labor costs are rising rapidly, which may be either
good news or bad news. Of course, the number of Chinese people who can escape
poverty is one of the landmark achievements of the early 21st century, but the
prospect of rising wages may be detrimental to the economy. The country's main
comparative advantage has always been lower labor costs. At the same time, this is
bad news for Apple. Apple has always used China as its production base, and the rise
in worker wages has undoubtedly directly increased Apple's production costs.
For Apple, rapid growth in developing countries and stable economies in developed
countries are both opportunities. Because of the economic stability of developing
countries, Apple is able to expand its business. This is very important for Apple to
expand, because it will make them a bigger business and generate more revenue.
The rapid growth of developing countries is even more remarkable. For example, in
Asian countries, high-speed economic growth has provided Apple with huge
opportunities to increase sales in these foreign markets. The rise in per capita wages
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has undoubtedly increased people's purchasing power.
Social factors
Apple's business is affected by social or sociocultural trends. For Apple, the most
important social factors are the use of mobile access and the use of social media,
which are two opportunities for Apple. If Apple continues to provide easy-to-use
mobile devices, the mobile penetration trend of mobile access will become an
opportunity. Apple has seized this opportunity by creating iPhones, iPads and Apple
Watches.
In addition, in today ’s world, there are more and more social media, such as
Facebook, Instagram, Twitter, etc. Therefore, the increasing use of social media also
provides opportunities for Apple, because it will increase the number of digital
products that users can download a lot (Such as iPhone or iPad) demand popular
social media applications. Therefore, Apple has huge opportunities in the social
environment, and they need to stay ahead of their competitors.
Technical factors
Technical factors have great influence in any business technology, especially Apple.
Technology is constantly changing, so companies like Apple need to keep up with
these changes.
The growing demand for cloud computing is an opportunity for business
development. When providing cloud computing services, the development of an
expanded cloud infrastructure can maximize the profits of an enterprise. Related to
this, external strategic factors that increase technology integration can provide
opportunities to enhance company services and develop business by providing
technology products and services to more customers (including organizations). In
addition, the growth of the mobile market provides Apple with an opportunity,
including through the App Store and related digital content distribution platform to
obtain higher revenue.
However, the technological progress of other companies poses a threat to the
company, as more new companies may enter the market. Apple ’s biggest
competitors Samsung and Google now offer products and services that were once
Apple ’s signature. It took Google less than a year to build the same payment
application Google Pay as Apple Pay. Samsung perfectly mimicked fingerprint
recognition and facial recognition, and even created voice recognition, so they are no
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longer Apple ’s unique products. Apple ’s competitors have demonstrated the ability
to replicate their products and services, which may threaten the entire Apple brand.
Environmental factors
Environmental factors will greatly affect the company's revenue and brand.
These opportunities include business sustainability and trends, product energy
efficiency trends and labor rights trends. Through recycling and related procedures,
Apple is already looking for opportunities to maintain business sustainability. By
providing improved batteries and components that generate less heat, Apple has
taken measures to improve the energy efficiency of its products. Apple has begun to
improve its customer awareness by improving employment practices in its supply
chain. Apple is expected to address these environmental factors.
Legal factors
Apple conducts business globally, so it is susceptible to many legal factors and
litigation. Legal factors include equal opportunities, health and safety, advertising
standards, product labels, consumer rights and laws, and product safety. Each
country has its own set of rules and regulations, so global transactions may become
tricky for Apple. Apple needs to be familiar with the regulations of each country with
which it deals.
With the increase of privacy regulations and telecommunications regulations, the
restrictions on Apple are getting bigger and bigger. The reason it poses a threat to
Apple is that when Apple develops products that involve different types of private
information transmission, it will bring different differences to Apple. challenge. This
can also be turned into an opportunity because they can create privacy protection
features. In addition, the government enforces stricter telecommunications, which
may limit the availability of Apple products and pose a threat to Apple.
V. Conclusion
According to the analysis of SWOT and PESTLE, Apple is facing many different
problems. But no doubt, Apple is still a company with further development potential.
Apple can try to develop green technology to improve cost efficiency while satisfying
people's desire for environmental protection. In addition, Apple also has to learn
opponents and invest more resources in advertising. One can promote the IOS system
to let more people understand its benefits. Second, advertising can directly increase
the sales of Apple products. Of course, While Apple is developing, it must not forget
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its original advantages. It should cooperate with excellent product design and high-
quality after-sales service to stabilize the top part of the industry.
VI. References
1. China GDP per capita (https://tradingeconomics.com/china/gdp-per-
capita)
2. Dragages HK (http://dragageshk.com/)
3. MTR (https://tnews.mtr.com.hk/alert/alert_simpletxt_title.html)
4. Hong Kong Post (https://www.hongkongpost.hk/en/home/index.html)
5. Apple Inc. (https://www.apple.com/hk/)
6. Apple SWOT (https://bstrategyhub.com/swot-analysis-of-apple-apple-swot-
2018/)
7. Analysis of Apple (https://myassignmenthelp.com/case-study/apple-swot-&-
pestle-analysis.html)
8. Long Range Planning (Volume 30, Issue 1, February 1997,
Pages46-52)
9. Journal of Operations Management (Volume 13, Issue 2, August
1995, Pages 99-115)
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