Comprehensive Business Environment Analysis: Apple's Strategic Outlook

This report provides a comprehensive analysis of Apple's business environment. It begins with an introduction to the business environment and its importance, followed by an internal audit that examines supply and demand, elasticity, and market structure (oligopoly). Key diagrams illustrating these concepts are included. The report then delves into Apple's productivity and strategies, particularly concerning the iPhone, and applies a PESTLE analysis to assess political, economic, social, technological, legal, and environmental factors. An external audit follows, incorporating a SWOT analysis to evaluate strengths, weaknesses, opportunities, and threats. The limitations of micro-analysis are also discussed. The report concludes by summarizing the key findings and providing references. This analysis aims to understand the challenges and opportunities facing Apple, informing strategic planning and decision-making processes. The document is contributed by a student to be published on the website Desklib, a platform which provides all the necessary AI based study tools for students.

BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
INTERNAL AUDIT........................................................................................................................3
Supply and Demand....................................................................................................................3
Elasticity of Demand and Supply................................................................................................4
Oligopoly.....................................................................................................................................5
Key Diagrams .............................................................................................................................5
Productivity and Strategies of Apple I Phone.............................................................................8
PESTLE Analysis of Apple .....................................................................................................10
EXTERNAL AUDIT.....................................................................................................................12
SWOT Analysis........................................................................................................................12
Limitations of Micro analysis ..................................................................................................14
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Business environment is the integration of different factors which help the business to
grow and increase its effectiveness. The business environment help to understand the behavior of
the market customers, demand and supply of the market and all the related businesses which hep
the business increase its productivity. There are some factors which are external in the business
environment and the business have no control over I so that business have to analyze these
factors in order to formulate the effective strategic planning. There are internal factors which the
business have to assess as the business have the partial control over it and it can be changed to
grow the business and achieve the objectives of the business to increase the profit margins.
Samsung have also analyzed the business environment which help the company to increase the
sales and also increase the market customers by providing satisfaction. Apple is an electronic
giant in the world and is dealing in many home electronics. The company also innovated many
mobile phones which helped to increase the sales. The company was established 1976 in USA,
California and have an annual revenue of around 260 billion Dollars. In this report there is a brief
study about the macro and micro environment analysis so that the company can determine the
challenges and issues faced and what methods will help them to solve the problems.
INTERNAL AUDIT
Supply and Demand
As apple company is multinational company which produces different types of electronic
products it is very essential for the company to analyze the market demand and supply to
understand the behavior of the market and formulate the suitable strategies which will help the
company to increase the sales. (Shelton and Shopley, 2017)
Apple company is determined that according to the law of demand and supply is the
demand of the products should be equal to the supply which will create tan equilibrium and
hence giving the company the maximum output in the revenue generation. Demand is the need
and the desire of the customers in which they are willing to the buy the product on the given
price so that they can satisfy their needs. The company have to determine the different In which
they can increase the demand of their mobile phone product. The company have to make the
customers understand all the features and technology which the phone has and also educate their
customers about the importance of new technology in their life style.(Sangari and Razmi, 2015)

The marketing of the new mobile phones with the attractive depiction will also increase the
demand of the company's mobile phone. Due to the high competition in the mobile phones in the
world the company have to innovate their products so that they can achieve the competitive
advantage. The demand of the company will also help to increase the information base so that
they can improve the product according to the need of the customers so that they can be satisfied.
The law of supply states that increase in demand will result in the increase in the price if the
supply is at the constant. But the company have successfully changes the law for their own good.
Apple has the high priced products even though the demand id high and demand of the product is
high this only happened due to the quality of product and the brand image for which the
customers are willing to pay extra to satisfy their self actualization needs in the society. In many
societies owning an Apple Phone is considered to be rich and also wealthy the company is using
this reason to increase the sales of the company. Apple also have to focus on the supply of the
products by improving the distribution channel and also opening online stores so that the
customers can directly purchase from the company.(Rostamkalaei and Freel, 2017) The company
have to increase the production pf their product to meet the demand.
Elasticity of Demand and Supply
Elasticity of demand states that a change of the price of the phone will affect the demand
of the mobile phone. The change in the demand will be analyzed in the form of Percent change
and also the change will be associated with the quantity demanded by the customers. The
elasticity of demand vary on many factors which are price of the product, price of the substitutes,
customers, behavior, income level of customer. For example the price of I phone 7 drops which
increases the demand. The price of I phone 11 in higher which will increases the demand of the
older I phone and increases the profit of the company. The demand can also be effected by the
governmental policies and economic factors of the market. (Liu and et.al., 2016)
Elasticity of Supply states that the demand of the products and price of the product have
the direct relation with the supply of the products. The supply of the products will vary in the
different market due the geographical locations and the type of strategy adopted to increase the
market demand of the company. Apple also have analyzed the market demand so that they can
establish a production house near the market which can meet to demand and also lower the cost
of the company.

Oligopoly
Oligopoly is the market structure in which the there are certain big players which lead the
market and are also capable to change the prices of the market according to their will. In the
oligopoly due to limited number of players all the marketing strategies affect one another and
also the sales of the competitors. Apple have to make the effective strategies to lead in the
market and make the effective price policies which help the company to attract the maximum
number of customers. The increase in the innovation in the technology of the mobile phones will
also help to increase the competition in the market so that Apple company can achieve the
competitive advantage in the market. The company have to analyses all the legal, economical,
technological factors which will help to increase the efficiency of the company increase the
customer base. Apple can also form an alliance of all the market leaders In the same market so
that they lower the competition and find some alternative solution in which every company can
get the equal proportionate in the profit generation. The Cartel discourages the company to
follow the rules and also forces them to illegally increases the market share by breaking the
rules of the alliance this will also disrupt with the balance in the market and will create a cut-
throat competition in the market. (Ifinedo, Pyke and Anwar, 2018)
Key Diagrams
Demand and Supply

Price Elasticity
Price elasticity is the criteria which is very important in economics to analyze the market
demand and supply of the product according the given price to the customers so that they can
increase their satisfaction according to their needs and desires. Apple need to evaluate the price
elasticity due to high competition in the mobile phone sectors and increase in the technology
which can make the technology obsolete very fast and also decrease the efficiency of the
products. The company have also analyzed that the change in the price also changes the quality
demanded of the product which help the company to sell their products more easily and flexible
manner.(Um, 2017)
Income Elasticity
Income elasticity states that the services of the company and quality of the products re
directly related to the income level of the customers. If the customers have the high income level
then he will shift for the high quality products and services and if they have low level of income
the customers will opt for poor quality of products and services(Hunter, Saunders and Constance,
2016) . Apple have to analyze the income level of the customer in the market so that they can
increase the sales of the company as the company have only focused on the high and upper

middle social class of the society which gave them a better sales and created the goodwill of the
company. To maintain that goodwill the company also need to invest in the market which is
Growing and also having a potential.
Cross Elasticity
The cross elasticity of demand of good and services is analyzed by the change in the price
of the substitute goods and the complementary goods. For example The prices of the mobile
phone of the competitive company is increased which will impact the market provide and also
increase the demand of the mobile phones of Apple company and provide a better sales to the
company(Hong and et.al., 2016) . The substitutes products are those goods and services which
have the similar features In the same price range which can vary the level of satisfaction. Apple
have to analyze all the substitute products in the market to increase the percentage of customers
switching to apple due to changes in the substitute products. The complementary products are the
goods and services in the market which can't be used without one another. For example the
mobile phone with the battery will be useless and it will not satisfy the customers.

Productivity and Strategies of Apple I Phone
Apple have analyzed the market strategies which will help the company to increase the
efficiency of the company and move the sales towards the expected goals and achieve the set
objectives of the company. The company have to analyze all the internal factors which can help
the company to make an effective strategies and promote I phone productions respectively.
Apple have to adopt some effective models and methods through which the customers can be
satisfied and increase the sales of the company. (Holotiuk and Beimborn, 2017)

The company have used the generic and intensive growth strategy which helped Apple to
provide the better services. These strategies are directly related to the pricing and marketing
strategy of the company and which help to attract the maximum customers for the products. The
company have also provided the unique service which no other company have provided that is
the company will replace their phone if the phone have accidental damage or any reason in the
limited period. This helped the company to increase the customer relation and customer

loyalty.The productivity of the company is measured by the satisfaction of the customers and the
quality the company is proving to the customers. (Zhang and et.al 2016)
The generic strategy help the company to achieve the competitive edge in the competitive
market as Apple is the market leader in the mobile phones in the world and provides its services
without any flaw to the customers. Apple also have the high productivity due to the innovation
and product differentiation from the customers as the market competitors provide the android
mobiles but Apple have developed its own operation system which is very user-friendly and also
help the customer to protect its data from the unknown user(Holden, 2016). The company is also

known for its high security data policies which help the customers to provide the premium
facilities which only apple User have which make them Unique. This is the reason Apple is able
to sell its product in the high price with the high demand and average supply of its mobile
phones.
PESTLE Analysis of Apple
Political factors
Apple have to analyze this factor as it s very important to understand the political
situation of the country and make the effective strategy which will support the company to attract
more customers. (Hachicha and et.al., 2016) The company also have to analyze ht taxation policy
properly before investing in the new market. The company is also dependent on china as the
production of Phones is done in china and that can also impact if the china changes the policies
and government.
Economical Factors

Apple have to analyze economic factors so that they can increase the profits and decrease
the cost of production of the company. The cost of production in china is cheap but if the rates
increases it will impact the prices of the product and also decrease the efficiency of the company.
The company also have to analyze the inflation rates, foreign exchange rates, the economic
policies of the government which can help the company to increase the productivity in the
country. (Green and et.al., 2017)
Social Factors
The company have to analyze the customers as they are the main factor in the growth of
the company and also it helps to provide the profit to the company. The company have to
determine the attitude, lifestyles, standard of living, behavior patterns, cultures, beliefs of the
customers to attract them by making the effective strategies and increasing the efficiency of the
products according to the needs of the customers. The income level of the customers will also
help tho target the accurate segment of customers to sell the products.(Geissdoerfer, Vladimirova
and Evans, 2018)
Technological Factors
The company have to huge competition in the technology as the competitors are changing
their technology constantly according to the market trends. The company also have top innovate
to increase the efficiency of the products and also provide the best technology so that the
customers are satisfied and also promote the company to their friends and family.
Legal Factors
Apple pay have been recently launched by the company which enables the customers to
transfer their money at the click a button. Company have to analyze the legal factors which can
impact the growth of the new application. As it can also lead to the fraud and the money can be
robbed with the help of hacking. The company have to analyze all the legal policies of the
government so that they can be in the ethical code of conduct.
Environmental Factors
Apple is also responsible to increase the awareness about the environmental problems
and issues which is impacting the health of the population of the world.(Ershova, 2017) The
company also have to analyze the ways through which they can socially help the people and
provide them better facilities which will indirectly help the company. As there will be more