Apple Inc.: Economic Impact, Challenges, and Strategic Recommendations

This report provides a comprehensive analysis of Apple Inc.'s business operations, market position, and economic impacts. It begins with an overview of Apple's introduction, competitors, opportunities, and threats, highlighting its financial strategies and innovative product lines. The report then delves into the economic news impacting the company, specifically focusing on the slowdown of China's economy and its effects on Apple's consumer demand, employment, and investment plans. Furthermore, the analysis examines the challenges Apple faces, such as high product prices, technological changes, and competitor moves. The report concludes with strategic suggestions for Apple to mitigate risks, improve market share, and adapt to the changing economic landscape, including competitive pricing, product innovation, and supply chain adjustments. References to books, journals, and online resources are included to support the analysis.

EVENT LOG

Table of Contents
Event log 1.......................................................................................................................................3
About Apple's Introduction, competitors, opportunities and threats:.........................................3
Event log 2.......................................................................................................................................4
Economic news that impact the company...................................................................................4
Event 3.............................................................................................................................................6
Suggestions.................................................................................................................................6
.........................................................................................................................................................7
REFERENCES................................................................................................................................8

Event log 1
About Apple's Introduction, competitors, opportunities and threats:
Apple is an American multinational organisation that develops and originate and sells
computer software such as Mac operations, ios, iclouds and other necessary accessories and
online services, electronics etc.. it produces computer peripherals, personal computers and
graphical user interface. Apple operates in all over world and its headquarter is in California. Its
stores is located every sphere. Some of its stores stablish inside in malls and others stand alone in
single flagship in high profile locations. Organisation sells its products globally through different
channels such as whole seller, retailer and direct with indirect distribution network. Apple is
leading name in its field by increase revenue and decrease its operation cost. Moreover its net
income increases by 14 billion dollar to 25 billion dollar approximately in 2010 to 2011 (Apple
Incorporated's Financial Strategy: An Analysis, 2018). The basic reason of data is to examine
financial strategy of Apple. Marketers find that important factors that includes in strategic
advantages include brand strength, innovation and distribution network, pricing strategy are key
advantages that possessed by Apple. Apple has an innovative products chain that developed
graphical user interface that satisfies needs of consumers. Innovation enables to minimize risk,
cost of product development and distribution cost. It has a strong and integrated supply chain that
easily distribute goods and services to the potential consumers. Strong supply chain gives
controlling power to organisation (Linden, Dedrick and Kraemer,2011). Apple marks premium
prices to keep their price consistent to all over markets that helps in earn higher revenue and
competitive advantage. In apple's competitors includes Dell, lenovo,acer, Samsung, pixel, Xiomi,
Toshiba, Asus, Sony, Microsoft etc.. Opportunities for apple-
Apple has many opportunities from which it can capture larger market share.
 Expanding distribution network- Apple can expand its distribution network which
helps them to reach more customers in the global market. Apple open more stores and
with the help of aggressive marketing it can target more customers and increase its sales
volume.
 Rise in demand- Increase in demand from the customers helps apple to launch more
product with specific features to meet the needs of general public and capture larger
market share.

 Developing new product lines- Apple can explore new product lines and helps business
to grow in international markets. It has developed its new product line of apple watch
which shows a major growth in market (Cheung and et.al., 2015).
Challenges faced by apple
 High price of products- Apple is facing the major problem of its increase in price which
becomes difficult for middle class people to purchase it. Its prices are so high that people
cannot afford to think.
 Technological change- Regular up-gradation of technology leads to innovative products
which makes the smartphones expensive and creates problem for the middle class men to
purchase it.
 Economic change- Apple operates in many countries because of which it follows the
rules and regulations accordingly and any economic slow turn in the country will affect
the prices of its products and also influence the buying pattern of the consumer.
 Competitors move- Apple's business is greatly affected by Samsung, lenevo, and dell
which copies their product features and use in their brand and attracts customers at a
lower price (Baily, 2011).
Event log 2
Economic news that impact the company.
China's economy is growing at its slowest pace since the financial crisis
The economy of China has slowdown along with deepening its trade war with United
States. According to the official data, the world's second biggest economy has a economy growth
of 6.5% which is the lowest quarterly growth since the financial crises of China in 2009 (China's
economy is growing at its slowest pace since the financial crisis, 2018). Thus, in order to
overcome it, governing bodies of China has turned to infrastructure spending, tax cuts and looser
monetary policy in order to enhance the growth of economy. Due to these trade wars, the stock
market and currency rate have been fluctuating from last few months.
The chosen news depicts the financial crises in china along with the low pace of growth
in economy. The crises took place during the year of 2009 in China. The respective news reflects
the slow growth of economy which have a direct impact on the tax cut and other increased rates
of the products and services.

Impact of China Economy on Apple Inc.
It has a direct impact on the consumer demand of Apple products in China. The demand
has drop up to 0.77% (What A Slowdown In China Means For Apple, 2018). The total unit
volume in China has fell 15 percent year by year in the third quarter which shows a huge impact
on Apple Inc. The market share is expected to improve by 13 percent however, the overall
smartphones market is contracted by 11 percent with every passing year. This shows a huge
concern to Apple Inc. to drive its market share from China as it wipe off 40 billion value of
Apple Inc. (Jin, Li and Wu, 2016).
Apple and China Employment
Apple claims to create more than 4.8 million jobs in China which is equal to 2.5 times the
number of jobs which Apple has created for United States. Out of these, 1.8 million jobs are for
iOS ecosystem jobs in China and 12,000 employees in near by 22 office and 46 Apple stores in
China (Apple Supports 4.8 Million Jobs in China, More Than Double US Total, 2018). The huge
difference between the employment rate created for China and US is due to the manufacturing
agreement Foxconn which is a Taiwan- bases Hon Hai Precision Industry which has a plant in
Zhengzhou which is responsible for assembling half a million iPhones on daily basis. Hence,
Foxconn has total number of 1.2 million which are responsible for assembling iPhones. Addition
to this, there are few other suppliers of Apple Inc. in China such as Mainland, Hong Kong and
Taiwan. However, Foxconn is looking forward to automate the production of iPhones in China,
which will raise the cost of the product by €8. This will lead to rise in cost of the production
which will result in increase in the price of Apple products (Johnson and et.al., 2012).
Investment Plan
Apple Inc. has announced total investment of approx. €263.4 million project which will
be focusing on developing renewable energy along with the partnership with various suppliers of
the respective company. The China Clean Energy Fund introduced to produce near by 1 gigawatt
of energy or enough power source for 1 million homes till next 4 years which reflects the future
investment plans of Apple Inc. in China (Apple announces $300 million clean energy fund in
China, 2018). This will help in lowering down the cost of assembling and other activities of the
company in the respective country. However, the investment budget cost is quite high due to
which the investment plan is quite risky for company.

Event 3
Suggestions.
For the above scenario, it is suggested that Apple Inc. should take certain measures in
order to avoid such loss that has been caused due to the china Trading issues and low economy.
Apple Inc. needs to analyse various elements before investing and operating in any foreign
country. These are economy stability, labour cost, government policies and many more.
Similarly, in order to improve the customer's demand in China market, Apple Inc should
adapt various promotion activities such as discount and offers, press release, print media, etc.
which will accelerate the customers demand and help in increasing the profit share of the
company. Also, Apple Inc. can adapt various strategy to have a strong impact on the demand of
mobile industry such as competitive pricing. It is a strategy which helps in fixing the price rate
according to the other competitors in the market. As China is one of the most advanced country
in context to technology. There are various competitors in the China market which are some how
equal to the technological advancement as Apple Inc. Hence, it is important for the respective
company to analyse these factors and implement such strategies which will help in having a
competitive advantage in China market. Apple Inc. can also introduce more advanced technology
which will help in fulfilling the demands of the customers in China.
It can be seen that Apple Inc. has a huge contribution in the employment growth of
China. Due to rise in labour cost of China, Apple Inc. will have to pay more to each employee
which will add up cost in the total budget of the respective company. The technology
modification adaption by the suppliers such as Foxconn has lead to increase the cost of
production. As Apple is highly dependant on China for its mass production, there will be rise in
price of the Apple Products all across the world which might be a little concern for the
customers. If the company does not add up this cost in the total price of the product, Apple Inc.
will face further loss on each product. Hence, in order to overcome these challenges, the
respective company needs to propose other assembling technologies which will cost less to the
company and yield more outcomes. Also, Apple Inc. needs to look forward for hiring employees
from different countries which will help in lowering down the employment cost of the respective
organisation.
Also, Apple Inc. can plan to invest in other countries which have low cost of assembling, and
other activities. There are plenty of countries which have low labour cost which can be an asset

to the respective company. Also, Apple should look for different suppliers which can offer low
cost and high productivity level.

REFERENCES
Books and Journals
Linden, G., Dedrick, J. and Kraemer, K.L., 2011. Innovation and job creation in a global
economy: The case of Apple's iPod. J. Int'l Com. & Econ., 3. p.223.
Cheung, Y.L., and et.al., 2015. Being good when being international in an emerging economy:
The case of China. Journal of Business Ethics, 130(4), pp.805-817.
Baily, M.N., 2011. Adjusting to China: A challenge to the US manufacturing sector. Brookings
Institution.
Jin, X., Li, D.D. and Wu, S., 2016. How will China shape the world economy?. China Economic
Review, 40, pp.272-280.
Johnson, K., and et.al., 2012. The Innovative Success that is Apple, Inc.
Online
China's economy is growing at its slowest pace since the financial crisis, 2018. [Online].
Available through:<https://edition.cnn.com/2018/10/18/economy/china-economy-
growth-q3/index.html>.
What A Slowdown In China Means For Apple, 2018. [Online]. Available
through:<https://www.benzinga.com/analyst-ratings/analyst-color/18/10/12506430/
what-a-slowdown-in-china-means-for-apple>.
Apple Supports 4.8 Million Jobs in China, More Than Double US Total, 2018. [Online].
Available through:<https://247wallst.com/jobs/2017/03/17/apple-supports-4-8-million-
jobs-in-china-more-than-double-us-total/>.
Apple announces $300 million clean energy fund in China, 2018. [Online]. Available
through:<https://www.cnbc.com/2018/07/12/apple-announces-300-million-clean-
energy-fund-in-china.html>.
Apple Incorporated's Financial Strategy: An Analysis, 2018. [Online]. Available
through:<https://www.bartleby.com/essay/Apple-Incorporateds-Financial-Strategy-An-
Analysis-P3Z3YFFMZRPS>.