Apple Case Study Analysis - Business Development Module, 2020

This case study provides a detailed analysis of Apple, examining its business operations and market position through various analytical frameworks. The study begins with a brief overview of Apple, including its founding, key products, and financial performance. It then delves into a PESTLE analysis, exploring the political, economic, social, technological, legal, and environmental factors that impact Apple's business. The political section discusses tax considerations and government policies, while the economic analysis covers the impact of the US dollar and globalization. The social aspect addresses corporate social responsibility and demographic trends. Technological factors examine the impact of innovation and competition from Android. Legal considerations include intellectual property rights and labor practices, and the environmental section focuses on e-waste and pollution. The study concludes by summarizing the key findings and highlighting Apple's need to adapt to a dynamic business environment. References and an appendix with market share data are also included.

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2020
Zoey
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Apple Case Study Analysis

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Contents
Introduction....................................................................................................................2
Main body......................................................................................................................2
Brief of Apple..........................................................................................................2
PESTLE analysis.....................................................................................................2
Political............................................................................................................3
Economic..........................................................................................................3
Social................................................................................................................4
Technological...................................................................................................4
Legal.................................................................................................................5
Environmental..................................................................................................5
Conclusion......................................................................................................................6
References......................................................................................................................7
Appendix........................................................................................................................8
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Introduction
Surviving in the market is not easy. Every business is confronted with aggressive
competition in all areas of its business. Extending a view on external environment,
businessman can know opportunities and threats to keep own core competitiveness.
This paper that follows will present brief profile of Apple, PESTLE analysis and
porter’s five forces of competition to analyze how factors affect the company
performance.
Main body
Brief of Apple
CEO Tim Cook（since 2001（
Founding date 1976
Location Worldwide
Headquarter Cupertino, CA
Revenue $267.7 Billion (2019)
Employees About 123,000
Products
iPhone, iPod, iPad, Apple TV, software applications system iOS,
OS X operating system, portable digital music players, iCloud
and its accessories, applications like App store, iTunes stores,
iBook store, Mac App store, and more
Website www.apple.com
The above is the basic information of Apple. There are four basic market structures
including perfect competition, monopolistic competition, oligopoly and monopoly,
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Apple sits between monopolistic competition and oligopoly. The company maintains
oligopoly in competition of iPhone, which has the large majority of market share, and
monopolistic competition in the computers. Compared with monopolistic competition,
oligopoly means higher barriers to entry. Under this competitive environment, leading
innovator, high brand recognition and strong marketing team are its main comparative
advantages. SWOT is often a tool used to analyze these, while PESTLE analysis is
more thorough and deeper than it.
PESTLE analysis
Political
Political factors always involve in changes of government policies that affect the
development of Apple positively or negatively to a great extent.
Tax consideration directly impacts the business. The report revealed that in 2017 the
U.S. enacted the Tax Cuts and Jobs Act, lowered income tax rate from 35% to 21%.
(Min Xu, 2019) Once tax cut is enacted, it is an effective action for Apple to lighten
its financial burden and then develop its development internal force. Investors can put
more money into the company, through stock purchases. That leads to gain more net
profits which the company will use to research and develop. Instead, If Apple’s
effective tax rates were to increase, or if the actual tax paid exceeds expectation, the
company’s financial conditions and operation results will suffer from a heavy blow.
Therefore, tax changes not just bring opportunities but threats. This moment I suppose
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it necessary to do a perfect enterprise taxation planning.
Economic
Economic factors affect commonly the company’s performances （ which consists of
macroeconomic factors and microeconomic factors.
The Finance of Apple is subject to changes in the value of U.S dollar. When the dollar
strengths, it will increase the company’s costs of products components denominated in
foreign currencies and then raise price its products. Also, it makes Apple products
more expensive and less competitive than foreign devices. The bargain power of
customer will go up. The sales of company must be impacted. Instead, a weak dollar
will trigger that the threats of new entrant will decrease and more high-tech firms will
enter into the US market. So competitive environment will be intense for Apple. Its
threats will be increased. (My Assignment Help, 2018)
In addition, as a macroeconomic factor economic globalization has unqualifiable
merits regarding the success of Apple has achieved. Based on the tendency, the
company changed business strategies. As the demand of cheap labor, the company
moved its manufacturing and assembly activities to China and Southeast Asia which
lower costs. With extended market and demands of Apple products, the company has
customized in the application of differentiation strategy.
One of economic factors, though philosophically defined as a political issue, which
seriously threatens human beings' lives and properties, is terrorist attack. If America
or areas where Apple’s outsourcing partners live in are attacked, it will lead to an
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unstable production and consumption environment. Supplies couldn’t manufacture
devices and then the undersupply maybe appear. From this point of view,
microeconomic factors affected. Besides, people lack the confidence of spending on
Apple products. Then its sales plummet.
Social
Apple must operate where a society is, the social environment of the company
consists of its labor, customers and practices.
Social responsibility is often recognized as a measure of the company, which affect
directly its brand image. In this respect, Apple has made several successes, such as
supporting local communities, educating workers and investing in Girls’ education.
(Dudovskiy, 2013) Those actions do attract positive publicity and then improve its
brand recognition and increase comparative advantages. Within the company, those
can keep the talent people thinking it is reliable.
Business demography has been a subject for at least 25 year. This suggests using
demography the company can determine what products and services to create. Using
data from the U.S. Census Bureau and the World Bank, the prospects of rising
incomes will transform massive populations into rapidly expanding consumer
markets. (Swanson & Morrison, 2010) Besides, by analyzing the traits of target
market like purchasing power, lifestyles, Apple can develop advertising messages and
marketing plan for the specific market to sale. Africa is an emerging market for Apple.
But people in Africa are not aware of its products, and the primary market have
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saturated. (Investor, 2016) That’s a barrier to entry. Nowadays by analyzing the
demography, Africa increased the use of mobile phones and social media, which
offers an opportunity the company can occupy the market to get more profits.
Technological
Technology poses tangible and intangible assets that help Apple earn money, update
products customers demand and build an effective relationship of suppliers and
customers.
To remain competitive and stimulate customers demand, Apple must transform
products and services continuously by technology. Not only the success of new
products does solve a dilemma that Apple has over-reliance on iPhone and iPad, but
also can expand emerging market share.
As shown in Chart 1, Android system has surpassed iOS with 38.9% market shares.
This is to say apple maybe has a threat that losing its customers to the Android
operating system. When new technology enters into market, the threats of substitute
products will increase, the threats of new entry will decrease due to lower costs, and
the bargain power of customers will go down because they can access more
information. If Apple wants to survive and compete, it must have incredible products
or a low price.
Besides, Apple may be impacted by information technology systems. It is crucial for
employees to interact clearly and quickly with customers, suppliers and partners. The
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more communication between customers and business, the more benefits the company
will get because they will build a steady relationship. Then company’s reputation will
be higher than before. It’s the information technology that the company can access to
emerging market to make profits. However, when facing disruption of information
technology, the system of company will be attacked and then data will be divulged,
which could subject Apple to financial and operation consequences.
Legal
Apple is often involved in legal issue. The US law and regulation connected to
employee’s protection said the company should guarantee health and safety as work.
While the company has a reputation for working long hours and paying low wages.
Days before the company was set to launch iPhone 6, a labor rights group revealed in
a supply factory used to manufacture iPhone and iPad had human rights violations.
(Tibken, 2014) When it happened , as the growing power of social media, some
people might criticize in public , which increases government oversights and negative
aspects of brand-image. As for labors in Apple, suffering a raw deal will reduce their
initiatives in production even job-hopping. It has an undesirable effect on the quality
and supply of products.
Intellectual property right is also what the company should consider. The company
includes wide range of intellectual property like patent, copyrights and trademark.
Having the good sense of intellectual property protection, the company can avoid
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some vicious competitions. However, nowadays technological changes, current
extensive patent coverage and the rapid rate of issuance of new patents, those are
maybe reasons why the company unknowingly infringe existing intellectual property.
(Maestri, 2018) In this case, Apple will be caught in being accused and reparations.
Environmental
When environment has some changes, Apple must adjust strategies to adapt.
The disposal of used or nonworking electronic devices is what Apple are facing. As
we all know, those lithium batteries have uncalculatable harm to the environment.
Though the Apple recycling program has been carried out around for ages, people
often ignore. Even if part of old tech has been recycled, the expense of processing
them is extremely high which directly affects its financial plan. Besides, pollution
from manufacturing facilities is also a concern issue. Later environmental monitoring
is required, which lead to the increase of costs. Also, if global warming continues to
deteriorate, ocean transportation will be disturbed and the supply of Apple products
will be impacted.
Conclusion
To conclude, I have analyzed Apple case through the Political, Economic, Social,
Technological, Legal and Environmental factors. To date I have found that though
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Apple can be considered in the different market structures which bring threats, the
highly-competitive market can offer opportunities to innovate new products to
increase comparative advantages. Besides, when changes come, the company must
think over and adjust strategies to adapt. Only when clearly recognize the competitive
business environment, Apple can enjoy an effective operation.
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References
Dudovskiy, J. (2013, 5 3). Apple Corporate Social Responsibility (CSR). Retrieved from Research
Methodology: https://research-methodology.net/apple-corporate-social-responsibility-
csr/
Investor, A. (2016, 4 19). Why Apple Is Failing In This Emerging Market. Retrieved from Seeking
Alpha: https://seekingalpha.com/article/3966349-why-apple-is-failing-in-this-emerging-
market
Maestri, L. (2018). Apple Inc. 2018 Annual Report 10-K.
Min Xu, S. K. (2019). Summary of 2017 Tax Cuts & Jobs Act Changes. Retrieved from DOAJ:
https://doaj.org/article/007d2dc9137e41108cc2eab43afd266e
My Assignment Help. (2018). Effects Of Market Globalization On Apple Inc. Retrieved from MY
ASSGINMENT HELP: https://myassignmenthelp.com/free-samples/effects-of-market-
globalization-on-apple-inc
statcounter. (2019, 2). Operating System Market Share Worldwide. Retrieved from statcounter:
https://gs.statcounter.com/os-market-share
Swanson, D. A., & Morrison, P. A. (2010). Teaching Business Demography Using Case Studies.
Dordrecht: Springer Nature B.V.
Tibken, S. (2014, 9 4). Apple chastised for unsafe working conditions in supplier factory. Retrieved
from cnet: https://www.cnet.com/news/apple-chastised-for-unsafe-working-conditions-
in-supplier-factory/
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Appendix
Chart 1 (statcounter, 2019)
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