Analysis of Apple's Contemporary Business Environment Report

This report provides a comprehensive analysis of Apple's contemporary business environment. It begins with an introduction to the business environment and microeconomics, followed by an audit of Apple's internal and external environments using SWOT and PESTLE analyses, respectively. The SWOT analysis highlights Apple's strengths (loyal consumers, innovation), weaknesses (high prices, incompatibility), opportunities (expanding distribution, green technology), and threats (high competition, technological advancements). The PESTLE analysis examines political, economic, social, technological, legal, and environmental factors impacting Apple. The report then delves into microeconomic concepts such as supply and demand, elasticity, and oligopoly, relevant to Apple's operations. Finally, the report acknowledges limitations and concludes with a summary of key findings and recommendations for Apple.

CONTEMPORARY
BUSINESS ENVIRONMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
Background.............................................................................................................................3
AUDIT OF INTERNAL AND EXTERNAL ENVIRONMENT....................................................3
Internal- SWOT......................................................................................................................3
External- PESTLE..................................................................................................................5
Benefits of consulting an audit...............................................................................................7
MICROEONOMICS........................................................................................................................7
Supply and demand................................................................................................................7
Elasticity.................................................................................................................................8
Oligopoly..............................................................................................................................11
LIMITATION................................................................................................................................11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
Business environment is defined as the combination of forces of the external and internal
environment which impacts the working of the business either in positive or in negative way. On
the other hand, microeconomics is that branch of economics that pays attention to the individual
behaviour and the behaviour of firms on taking decision relating to allocation of scarce
resources. The present essay will discuss about the audit of the internal as well as external
environment and the reason why it is necessary for the company to carry on these analyses.
Further the discussion will take place on the microeconomic concepts of demand and supply and
different types of elasticity. In the end the limitation will be drawn from the whole assignment.
Background
The present study is based on Apple which is a multinational company founded by Steve
Jobs, Steve Wozniak and Ronald Wayne in the year 1976. This is a company which deals in
consumer electronics, online services, computer software and other related goods and services.
The environment within the country is very dynamic and that is why it is necessary for the
company to audit its external as well as internal environment.
AUDIT OF INTERNAL AND EXTERNAL ENVIRONMENT
It is very necessary for Apple to conduct the internal and external audit of the
environment because there are many changes taking place within the external environment. The
changes within the external environment also impacts the working of the company (Orders and
et.al., 2017). That is why it is of utmost importance to have time- to- time analysis of the external
and internal environment.
Internal- SWOT
The internal analysis is the process of analysing the whole organization to know every
detail of the company and to analyse its capabilities and drawbacks relating to the changes taking
place within the external environment. Thus, for this Apple takes help of SWOT analysis which
is a tool which help the company in analysing all its strengths and weakness and the relating
opportunities and threats present within the external environment. The SWOT analysis of Apple
is discussed in the following points connected below-
Strengths- these are the positive things which makes the brand stronger in comparison to
other competitors. The major strength of Apple is as follows-

 The major strength of company is its large base of loyal consumers. This is a major
strength because though the products are very costly then also the consumers are loyal to
the company. this provides a competitive advantage for the company as consumer
supports the product of the company
 Another strength is innovation as company keeps on innovating some or the other feature
in its products. This attracts more of the consumers as they like the product with new
innovations and creativity.
Weakness- these are the areas which hampers the company working and the company
needs to improve this. The major weakness is like below-
 The major weakness is the high prices of the products and services. The high-class people
can afford this heavy priced product but not the low or middle-class people. The major
portion of the country is middle class thus, this is a weakness as company cannot cover
that segment of population.
 Another weakness is the incompatibility with other system and software. once the Apple
product is purchased it cannot be used with the other software or technologies. Thus, for
this the consumer has to buy the Apple products only.
Opportunities- these are the options within the market which can be used by the company
to grow them and earn profits out of those situations. The major opportunity lying for Apple
within the market are as follows-
 Expand the distribution network- this is the latest opportunity for the company as
currently the distribution network of the company is very limited. Thus, for increasing the
revenues and sales the company can increase its distribution network to a great extent.
 Green technology- in the present scenario the consumers are more concerned towards the
protection of the environment. Thus, this can also be an opportunity for the company as it
can produce the products which are eco- friendly and does not harm the environment with
the radiations coming out from the electronic products.
Threats- these are the restriction which are on the company which restrict the company to
perform up to their maximum capability. The major threat faced by Apple are discussed in the
following points-
 The major threat faced by Apple is the high competition which is present in the market.
There are many big brands which deals in same business field like Samsung, Dell,

Google and many other related big firms. Thus, these are threat to the company (Apple
SWOT analysis, 2019).
 Another threat is the ongoing technological advancement within the business
environment. In the recent time there are many changes taking place in technology sector
which the company needs to take into consideration.
External- PESTLE
The analysis of external environment is very necessary because there are many changes
which takes place in the external environment. The study of these factors is important because
these impacts can have both the positive as well as negative impact on the operations of the
business. Thus, for this Apple takes help of PESTLE analysis (Vendrell-Herrero, Opazo and
Sanchez-Montesinos, 2018). This is a tool which helps the company in analysing all the external
factors which have direct or indirect influence on the company.
Political factors- this refers to the changes taking place in the political and government
sector which has a major impact on the working of the company. the major change within the
political state of country is the improvement in the free trade policies. This is an opportunity for
the company because now Apple can trade more in the other countries and this increases the
sales and revenue of the company. Another change in the political is the trade dispute in US and
China which is a threat for Apple. This is a threat due to the fact that this will impact the sales of
product of company in China if the dispute is not resolved early.
Economic factors- these refers to as the changes taking place in the economy of the
country and which can also impact the business of Apple to a great extent. Presently the
economy of UK is quite stable and this is an opportunity for the company as they can do their
business without any restrictions or any changes. Also, the disposable income of the consumer is
increasing and this is an opportunity for Apple as now more of the consumer will buy the
products of Apple as they have more money to spend.
Social factors- this includes the changes taking place in the societal factors that is the
attitude, behaviour, perception of the consumer towards the product and services of the company.
this majorly impacts the working of the company as if the goods and services of Apple will not
be liked by the consumers then it is a losing situation for the company. Currently the social factor
is an opportunity for Apple due to the fact that there is a rising trend of consumers towards the

use of technological tools and gadgets. Thus, this is an opportunity for the company which can
yield much profit for the company.
Technological factors- this is also an important factor which impacts the growth of the
company. this factor includes the changes which are taking place within the technological sector.
In the present modern and competitive world there are many changes in the technological sector
which needs to be taken into consideration by the company (Sarsby, 2016). This is pertaining to
the fact that if the company does not take into consideration these changes then the products and
services of Apple will become obsolete and the consumers will not like them. In the present
within the technological sector there is a growth in demand of cloud computing within the
phones. Thus, this is an opportunity for the company as it can develop the cloud computing
within its devices and this will increase the sales of company. In contrast to this the technological
advancement is also a threat because all the other competitors are also using these advancements
and this crates more competition for the products and services of Apple.
Legal factors- these includes the changes taking place in the different laws and rules and
regulation which are applicable on the company. The compliance of rules and regulation is very
necessary for the company as this build trust among the consumers as the products are safe. This
is majorly due to the fact that if company follows all the rules and regulations then the products
are of good quality. In the present world the major focus of the consumer is on the privacy of
their data and details. Thus, it is of utmost priority that the company takes care of this and
provide facility for the protection of the data. Also, the compliance of these laws is very
challenging because there are many different types of laws which are applicable over the
business and needs to taken care of. Thus, it is very challenging for the company as they have to
gather information for all the details of the law and this also consumes a lot of time.
Environmental factors- now- a- days this is the most important factor because the
consumers have become more concerned about the protection and safeguarding of the
environment. This factor provides for some opportunities for the company because currently the
trend of business sustainability is going on in the market. This supports the business in providing
the measures of growth of the business which does not harm the environment (Orders and et.al.,
2015). Thus, this influence and encourages the consumers to buy the goods and services of
Apple. Also, the company is focusing on the concept of recycling and reusing the goods and
services which can be used again. This will save the environment as the waste is managed

properly and is in reusable form. Also, the company is trying to control the radiations which are
emitted from the electronic goods into the environment (Apple Inc. PESTLE analysis and
recommendation, 2019). Thus, the protection of the environment is very necessary to attract
more of the consumers.
Benefits of consulting an audit
When the company goes for the internal and external audit this helps the company in
gaining many benefits. Some benefits are discussed in the following points-
With the help of these two audits the company come to know about their competitors to a great
extent. This helps the company in analysing the ways of overcoming the competition and gaining
market share.
Another benefit of this is improving the relation with the consumers and employees. This
takes place because of the fact that with help of analysing social factors the taste and preference
of the consumers are known and company can make changes in accordance with those. Thus,
this improves the relation with consumers (OFFER, 2016).
One more advantage is that the company can be one step ahead of the competitors. This
is basically because of the reason that with the analysis the company comes to know about the
strategies and methods used by the competitors and Apple can make their own strategies keeping
in mind the strategy of the competitors.
MICROEONOMICS
The term microeconomic is defined as the study of the individual, households and the
behaviour of the firm in taking the decision of allocating the resource so that the work can be
accomplished. Thus, the microeconomics study the different choices which people can make and
the different factors which influences the choices and how this impact the decision making of the
company.
Supply and demand
Demand- The demand is defined as the amount of good and services which the consumer
is willing and is able to purchase at different price levels. If the demand is more then it means
that the consumers are liking the goods and services of the company. The demand and the price
of the goods are inversely related to one another (Nadkarni, 2017). This is majorly because of the
fact that when the price of the product is high then the demand of the product will be low as

people will not buy the product at high prices. The demand curve is displayed in the following
image-
Figure 1
(Source: Movement along the demand curve and shift of the demand curve, 2019)
Supply- on the flip side the supply refers to as the availability of the goods and services
for the consumers to buy from the market. The price of the product and the supply are positively
related to one another (Khan, Alam and Alam, 2015). This is mainly because of the fact that if
the price of the product will increase then its supply will also increase as producer of goods will
try to sell more products at high prices to earn more profits. This can be illustrated with
following diagram:
Figure 2
(Source: Supply. 2019)

Elasticity
Elasticity is the measurement of the proportional changes in one economic variable
because of change in the other variable. The elasticity is of three different types which are
discussed in the following ways-
Price elasticity of demand- this is defined as the responsiveness of the quantity
demanded of the goods and services to change when the price of the product goes down or high.
The price elasticity of demand can also be defined as the percentage change in the quantity
demanded of the product divided by the percentage change in price. This can be calculated with
the following formula-
% change in quantity
% change in price
Figure 3
(Source: Elastic demand. 2016)
Income elasticity- this type of elasticity measures the relation between the quantity
demanded for the good pertaining to the changes in the income of the person. The formula for
calculating the income elasticity of product is the
% change in quantity
% change in income

Figure 4
(Source: Income elasticity of demand: definition and types with examples, 2018)
Cross elasticity- the cross elasticity measures the responsiveness of the quantity
demanded of one product due to change in the price of another good. This is calculated in case of
complimentary or substitute goods. The formula of calculating the cross elasticity is as follows-
% change in quantity
% change in income
Figure 5
(Source: cross elasticity of demand, 2019)

Oligopoly
This is a form of market in which the competition is very limited wherein there are few
producers who control the majority of the market share and produces the homogenous goods. As
the competition is very low and all the firms produces same or similar products thus, there is
scope of partnership and collaborations (Hamilton and Webster, 2018). The entry to new firms
is restricted as the existing oligopolies offer a well- established product range by way of strong
distribution network. In oligopoly there are many barriers to the entry within the market.
This is majorly because of the reason that the oligopolistic firms earn super- normal
profits and because of this they have created many barriers to the entry. These barriers are
created because of the fact that if barriers will not be there then the profit will be shared among
them. Thus, these barriers will restrict new companies to enter. The barriers are like licenses,
monopoly over the raw material, patents and many others. The major example of oligopolistic
market is the Apple iOS and Google Android dominating the smartphone market. Also, Apple
and Windows dominate the computer operating systems market.
LIMITATION
The major limitation of microeconomics due to changes in the prices of the goods and
services are as follows-
The reduction in the price can affect the demand of scheme of Pay as you go. This is a
type of prepaid mobile device for which credit is purchased in the advance to use the services.
Now if the prices of this will increased by the company then the demand of this decreases no one
will use this service if the price will be higher.
Similarly, the change in the prices impacts the contract phones as well. Contract phones
is defined as the handset which are sold to the consumer wherein the consumer buy the product
by paying in instalments. Now if the prices of this product will decrease then the demand if this
will increase as people will not have to pay much instalment and will buy directly by paying total
money in single time only (Azabany and et.al., 2015).
CONCLUSION
From the above essay it is concluded that the analysing the business environment majorly
impacts the working of the company. Thus, it is very necessary for the company to analyse both
the internal and external business environment. The above essay discussed about the analysis of

the internal environment with the help of the SWOT analysis which helped the company in
analysing its strength and weakness and relative opportunity and threats.
Further the external analysis helped the company in analysing the changes within the
market and the impact of that on the business. This was done by taking the help of PESTLE
analysis. Further the discussion was done on the microeconomic concepts like supply and
demand and elasticity. This elasticity is of different types such as price, cross and income. In the
end the discussion was done on oligopoly as a market type.

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