Apple's Global Business Environment: A PEST Analysis Pre & Post 2008

This essay examines the impact of globalization on Apple Inc., focusing on the periods before and after the 2008 financial crisis. It presents two examples of how globalization has affected Apple, analyzing each using a PEST analysis to identify relevant political, economic, social, and technological factors. The first example relates to pre-2008 events, highlighting Apple's strategic focus on high-end products and cultural fetishism driven by globalization. The second example addresses the challenges and adaptations Apple faced during and after the 2008 crisis, including currency fluctuations and market slowdown. The analysis compares these examples to demonstrate how the global business environment has evolved, particularly concerning political risks, economic recessions, and technological advancements. The essay concludes by emphasizing Apple's resilience and innovative strategies in navigating the complexities of globalization.

Running head: INTERNATIONAL BUSINESS ENVIRONMENT
International Business Environment
Name of the Student
Name of the University
Author Note

1INTERNATIONAL BUSINESS ENVIRONMENT
Introduction
Globalization has been the current trend that has brought three main changes on the stage
of the world. The birth of the invention of the modernity and the rise of the world, the emergence
of the USA and the successful development and the rise of the rest of the world are the three
main ingredients of globalization. Globalization has implemented newer requirements for the
gathering of the information that is essential for the information of the policy in the current
economy of the world that are independent in nature (Blenko et al. 2016). The global economy is
the current base or the reality for all the companies and the multinational organization. While the
multinational organizations have pursued internationalization since the last years, firms from the
countries that are developing have also reached to the heights of global giants in the last few
years. Globalization is the growing trend in the competitive international market. The rate of
growth of the nations that are developing and their representations of the previous corporations
highlights the economic growth in the current era (Cohen 2015). The multinational corporations
in the current era are the major agents of the concept of globalization. This reality roots from the
fact that the multinational companies tend to have many of the subsidiaries among which some
do benefits from the notion of globalization. The impact of globalization on the growing
multinational companies can either be good or bad, relying on the nature of the multinational
corporation in the discussion. The assignment focuses on the most renowned multinational
organization in the world, Apple Inc. and the impact of the globalization on the company within
the span of years before and after the year 2008. The assignment furthermore highlights the
changes in the nature of the globalization since the earliest times.

2INTERNATIONAL BUSINESS ENVIRONMENT
Body
Background
Started in 1976, Apple started off as a mere computer organization. In the current era, the
company has expanded to the biggest organization in the world. This journey from zero to 100 of
Apple is inspiring to many of the entrepreneurs in the current era. It has expanded as a very
intricate organization specializing in top class mobile, laptop and accessories. The organization is
best known for their hardware product that includes Macintosh computer system, iPhone, iPad,
and iPod. With regards to its innovative and aesthetic designs that are comprehensive towards its
various distinctive media campaigns, the company has been successful in establishing a
reputation and popularity in the electronics industry for consumer goods throughout the world
(Apple 2018). Apple has been selected as one of the admired and desired organization in the
market by Forbes and the business times several times. With its unique ranges of products and
the increased rate of mind-boggling, Apple has become the most successful institution of media
and conversation through the analysis of the innovative trends, ideologies and the concept of
globalization.
The concept or the process of globalization involves various and numerous
interconnected and interrelated procedure that furthermore involves the internationalization of
trade and finances (Zhang 2017). The development of globalization has said to increase the profit
level of the company and helped in the successfully succeeding exceptionally in the context of
advanced strategically moves for foreign exporting, importing and outsourcing.

3INTERNATIONAL BUSINESS ENVIRONMENT
Globalization on the company
The financial crisis of 2007 -2008 affected many of the countries which eventually
resulted in the global economic crisis since the great depression (Chen and Bai 2016). Triggered
by the concept of the proliferation of the financial products that linked to mortgage loans that are
risky in nature, this 2008 crisis in the field of financial globalization amplified certain risks
towards the banking activities and the financial markets.
According to different researchers, Apple has been successful in increasing its share of
profits in the effect of globalization before the era of 2008 due to the ongoing process that
involves internationalization of trade and finances throughout the world (Apple 2018). The
newer structure of the economy has helped to lead the technology market of the United States to
the top and led the company achieves its target of standing out as the best in the market with
innovative strategy designs as compared to its competitors in the market. The significant success
of the company in the global market has certain factors behind it (Nicolás Marín Ximénez and
Sanz 2014). The CEO of the company targeted his aims initially on the high-end products of the
technology and the growth and development of the technology of the consumer. One of the
innovative strategies the company used in the era of rising market of globalization is the decision
of the creation of limited quantity of products in the similar area of products. The company
expected their own products to reach the epitome of success and leadership in the market (Khan,
Alam and Alam 2015). Before the 2008, none of the popular makers of the phone emerged
successful and classy as compared to the business strategy of Apple that can successfully survive
the market with one arena of product. Before the year of 2008, with the rising stage of
globalization, Apple adopted the strategy to focus more on the quality and in-depth research for
the extended function of their products rather than the variety of their product range. The

4INTERNATIONAL BUSINESS ENVIRONMENT
company adopted the strategy that more professional products of them will eventually lead to
more consumers’ attraction (Gardere, Sharir and Maman 2018). Furthermore, with the rising
globalization of the culture, the usage of the newly launched products of the Apple caused
phenomenon-fetishism. People back in 2008 started to fascinate apple and the products of the
apple as a fashion and a trend. The concept of globalization and ideology were the two most
important factors that the company used to interact in the market of rising competition.
PEST Analysis
It is basically a simple and a very effective instrument that is generally used for the
analysis of the situation for the fruitful identification of the main macro environmental level of
forces that might be affecting the organization.
Figure: 1; Macro environment factors
Source: (Chen, Kim and Yamaguchi 2014)
The dimension of the PEST Analysis can be explained below.

5INTERNATIONAL BUSINESS ENVIRONMENT
Political Factors include factors such as tax policies, governmental stability, control of the trade,
bureaucracy, tariffs, restriction over the imports.
 It has been on the report that a major portion of the sales of the products of Apple comes
from countries other than the U.S
 Apple has started to manufacture various products from the outside like the Ireland,
Korea, China prior to 2008 (CNET 2018)
 The increasing number of disputes and bad political relationships among the country of
origin and the company may result in worse and challenging outcomes for the
productivity and sales for the company.
Economic Factors includes inflation rates, trends in unemployment, costs of labor, business cycle
stages, and patterns of trends and rates of interest.
 Due to the high price range, most of the customers do not prefer the products of the apple
(Khan, Alam and Alam 2015)
 Fluctuating value of the US dollar and decreased effects of the economy in the country
 Apple highlighted three important economic factors- currency, recession and the inflation
Social Factors include consciousness of health, beliefs, and religion, the expectancy of life,
lifestyles, and rate of population growth.
 The purchasing power of the U.S people is higher than that of the people residing I the
rest of the world, hence the luxury range of the apple products have been surviving in the
age of globalization
 Possession of Apple products in the developed countries like the U.S has been considered
as a symbol of higher status

6INTERNATIONAL BUSINESS ENVIRONMENT
Technological Factors includes technological changes, basic level of infrastructure, technological
legislation and development of the research related to the technological advancement
 From the evolution of 1976, Apple I products, the company eventually developed
products with high-end processors, RAM, interface, the integrated screen that shook the
entire world.
 The huge amount of investment in the product research for the development of innovative
ideas for its product (Kanagal 2015)
 Technology is not stagnant and it’s upgrading every second, the company thus aimed to
upgrade every product of theirs with a different touch.
PEST analysis of Apple before the economic recession and the financial crisis of 2008 are
one of the most comprehensive models for the study and evaluation of the effect of the various
forces in the environment for the exploitation of the opportunities and threats.
The day of disillusion for the entire world was on January 14, 2008.

7INTERNATIONAL BUSINESS ENVIRONMENT
Figure: 2; Scenario before and after 2008
Source: (Finkle and Mallin 2010)
The figure above illustrates the figures of the company; Apple was having significant
earnings about 50% higher than the normal level proper to 2008. The share of the company fell
below the average level and Apple’s earnings dropped drastically. Though it remained positive
through the later period with the following of some of the strategies and moves, the market of
Apple faced severe challenges. One of the examples of the noteworthy event that took place in
2008 in the history of Apple is the Macworld 2008 when Jove’s launched Mac book Air. The
valuation of the Apple started to drop through the products did not do badly either in the
international market.

8INTERNATIONAL BUSINESS ENVIRONMENT
Regardless of the deepening recession of 2008 and softening sales figures, Apple still
managed to set a record of single quarter revenue with a sales figure of more than 2.5 million
Macs and 4.3 Million iPhones (Asghar, Shahzad and Mamoon 2017). According to internal data
analysis, Apple sold 9% more products during 2008 than the figure for the last year, 2007.
The sales figure of the company was not at all hampered that much, only the growth of
this multinational company got much slower due to the recession and financial crisis in the year
2008. The company bucks the recession of 2008 with some of the best results of finance.
Despite the economic gloom, the company was still able to hold up to its profit levels.
This success was achieved by the company mostly by the newly launched Mac books and iPhone
range that came to market from the mid of the year (Chen and Bai 2016). Though the company
had been heavily affected by the currency fluctuations, the company found its strategical
interventions and innovative ideas to resist and survive in the recession of 2008.
Since the year 2005, Apple has ranked at the top most position among all the competitors
due to its innovative and unique devices and products. The company has increased its remarkable
sales growth and exploration every year.

9INTERNATIONAL BUSINESS ENVIRONMENT
Figure: 3; Apple’s rising profit after the financial crisis
Source: (Khan, Alam and Alam 2015)
The above figure illustrates the high brand recognition and increasing sales figure of
Apple. With an effective and strong marketing team and premium quality of the experiences of
the customers, the company has increasing rates of cloud base services.
PEST Analysis
Apple receives the main part of its sales figure from out of the home state, it is thus
important to understand the negative effect of political revolution or disturbance in the countries
the company is operating.
Political Factors
 The case of suicide against the biggest Taiwan supplier of the company, Apple

10INTERNATIONAL BUSINESS ENVIRONMENT
 Political disturbances in the country of China
 The terrorist attack threats and fears
 The CEO of Apple Tim Cook banned in the continent of Russia
Economic Factors
 Effect of global recession
 The decrease in the sales figures due to the global recession (Saebi and Foss 2015)
 Difficulties and economic challenges in Europe
 The sudden increase in the inflation rate in the U.S
 High labor cost in China
 Growing value of the U.S dollar
Social Factors
 Higher status and lifestyle of an individual
 A potential share of market in the third world country
 Moral factors for the determination of manufacturing procedure in China
 Increasing rate of Bank acquisition in countries (Kanagal 2015)
Technological Factors
 Advantages of 760 subscribers of Chinese mobile
 Assessing the consumer's mind
 Increased level of competitors in the similar market
 A very limited market for the new product range
 The on growing rate of cyber crimes

11INTERNATIONAL BUSINESS ENVIRONMENT
Apart from the PEST factors that analyze the external factors which play a crucial role in
assessing the company’s productivity, there are some of the legal and environmental factors like
issues of pollution in China, problem of global warming and increased electricity costs that lies
at the challenges in the industry (SHTAL et al. 2018). Apple may be facing certain challenges in
the coming years based on the PEST Analysis, its distinctive features like unique design and
exclusive ability will bring the assured success of the company and its rising revenue scales.
Impact and the changes in the nature of globalization
Globalization evolved due to the trends for the international trade across the boundaries
of the nation and the conduction and the introduction of the activities related to business in
multiple countries. It basically defined the procedure of the growth of the interdependencies
among the industries in the national markets on the worldwide basis.