Apple Inc.: Business Environment Analysis, Microeconomics, and PESTLE

This report provides a comprehensive analysis of Apple Inc.'s contemporary business environment. It begins with an overview of the company, followed by an examination of relevant microeconomic concepts and models, including demand and supply, elasticity, and oligopoly. The report then delves into an internal audit, assessing productivity and business strategies. A PESTLE analysis is conducted to evaluate the political, economic, social, technological, legal, and environmental factors impacting Apple. Furthermore, an external audit, incorporating SWOT analysis, is included to assess the company's strengths, weaknesses, opportunities, and threats. The report concludes with a discussion of the limitations of microeconomics and summarizes key findings, offering insights into Apple's strategic positioning within the dynamic business landscape. This analysis is intended to provide a thorough understanding of Apple's operations and its response to the challenges and opportunities of the modern business environment.

Contemporary Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Overview of the company...........................................................................................................1
Business Environment and Micro Economic concepts and models............................................1
PESTLE Analysis........................................................................................................................7
External Audit.............................................................................................................................9
Limitation of Micro Economics...............................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
The contemporary business environment broadly competitive and enhance with such
pressures that known as modern marketing that can go through produce a good product, pricing
that attractively and creating it approachable (Albescu, 2015). The business environment is
fluctuated that change as per the different situation and influence by the different factors that
categorised into internal as well as external factors. In the contemporary business environment
mainly focused on the different factors that impact in direct manner like sudden changes in the
context of demand and supply, taste of customer, staff involvement. There are different features
that shows impact on the different factors like rival firms, suppliers, customer and other internal
as well as external factors. In order to better understand of the report require to select company
which is Apple Inc. that known as international American company and famous in the auto
mobile sector. To analysis the report require to understand the different topics like demand and
supply curve, price elasticity, inner elements evaluation and conduct PESTLE analysis in the
relation of selected organisation. Along with conduct external audit where required to conduct
SWOT analysis to analysis the strength, weakness and other elements of the organisation.
MAIN BODY
Overview of the company
Apple Inc. is world famous leading company in Auto Mobile sector that producing
different types of gadgets and mobiles that based on the advanced technology and computer
software. The headquarter of the organisation situated in Cupertino, California which designs,
build up and selling consumers electronics and other online services. The company was founded
in 1 April, 1976 about 43 years ago and was founded by Steve Jobs, Steve Wozniak and Ronald
Wayne. As per the report 2009, the company have locations about 500 plus retails stores. There
are working about 123000 full time staff members and operated 504 stores in 24 countries.
Business Environment and Micro Economic concepts and models
Current time, business environment important concept for any organisation which is
linked with an internal as well as external activities. These activities based on the different
people like customers, supplies, distributors, investors and others. Due to changes cultural
activities, trends, strategic planning impact on the market and create competition (ARIKAN and
ENGİNOĞLU, 2016). As a result it impact on the organisational procedure in direct manner.
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Demand: It is an economic term where consumer's willingly desire and ability to buy a
products and services and pay price for these products. If all the factors keep constant and
increase the price of goods so it will decease the quantity demanded and vice versa. The
customer demand of the product according to its requirement and income level. There is main
bond between quantity demand and price which is shown demand curve in negative manner.
Through marketer supports analysis the price of goods at the market place.
As per the above graph it is analysed that when goods purchase by people according to
price which is known as demand curve. From the graph it is understanding that price and goods
have adverse relation. When price of the product increase that time decrease the demand of
goods and price decrease so demand increase (Baporikar, 2015).
Supply: The meaning of supply the particular quantities which is willingly seller wants to
sell at various price. Supply is important concept of economic where define the total amount of
specific commodities and services is available for consumers. The supply can be related with the
different amount of product at particular price and the amount produced through commodity
price shift. Additionally, value and amount consist of a good relationship where increase prices
impact on supply in positive manner. Similarly, in case of decrease price so supply of goods are
decrease so there is curve become in positive manner.
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As per the above diagram it is analysed that when price of the goods is on 60 so supply of
the goods is 1600. When increase the price of product from 60 to 80 that time increase supply of
products from 1600 to 2000 so it shows positive relation in between demand as well as supply.
Elasticity: In the economics, elasticity refers to the degree the individuals, consumers or
the producers change their demand in comparison of price or the income changes. In other
words, to asses the change in consumer demand as a result of a change in goods and service
price. When a product elasticity greater than 1 so that time demand impact on the price and when
lower than 1, then elasticity might so it can not impact on the price (Belyaeva, 2018).
Cross Elasticity: It is a concept that measures the changes in the quantity demanded of
one good when the price for the another good changes. It is also called as a cross price elasticity.
The cross elasticity of demand for substitute goods is always positive because in such condition
demand for one good increase when the price of the substitute good increase. For example, if the
price of coffee increases then consumer will switch to less expensive product such as tea and
other beverages. In order to compute cross elasticity for this apply the particular formula which
is underneath:
….....Cross Price Elasticity of Demand = (Q1X – Q0X) / (Q1X + Q0X) ÷ (P1Y – P0Y) / (P1Y +
P0Y)
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Price Elasticity: Price elasticity of demand is a measure of the change in the quantity
demanded or purchased of product in comparison of its price change. For some of the product,
their price do not change with the difference of demand, they are called as inelastic in nature
(Blahová, Pálka and Zelený, 2014) (Blahová, Palka and Haghirian, 2017) (Boone and et.al.,
2019). On the other hand, there are certain goods that their demand changes with the price of its
substitute goods they are called as elastic in nature. To calculate it apply the particular formula
such as:
….....Price Elasticity of Demand = % change in quantity / % change in price
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Income Elasticity: Income elasticity refers to the changes made in the goods demanded
with the change in the income of the consumers, keeping all other things constant. It show that
which goods are necessity or a luxury items for the consumer. Under this head, goods are divided
into two categorise one is inferior good and other is normal goods (Botha, Kourie and Snyman,
2014) . To calculate income elasticity apply the particular formula which is mention below:
….....Income Elasticity = % Change in the demanded quantity / % Change in Income
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Oligopoly: It is defined as a market framework with the small numbers of firms that put
hold of others from having significant influence. The cell phone industry is part of oligopoly
where consist of large firms that are competing with each others to manufacturer by 70 to 80% of
the out put. In this market consist of small numbers of sellers that become oligopolistic. Such as,
Apple company part of oligopoly market where sell out products in different and unique manner
which is not provided by any other company. Additionally, it is also part of the monopoly market
where selling out the personal computers and other personal gadgets (Chibba, 2015).
Internal audit: The internal audit conduct all the inner activities and provide results
about the condition of business. It helps to analysis the efficiency of staff members and
involvement in the particular task. The manager of Apple conduct audit that helps to make better
policies to develop positive atmosphere after analysis actual position. There are discussed
different points in detailed manner such as:
Productivity: In organisation, a operation manager can liable for the control and arrange
entire production activities where focus on different aspects. The company mainly concentrate
on the diverse operation, different standards, size of the products etc. Additionally organisation
can implement the tool of benchmarking which define that require minimum expected result.
Through this tool measuring the productivity of several division then compare with same
industry organisation to know their methodology regarding to products and services (De Vita and
Case, 2016). It is effective productive activity phase in the context of Apple such as:
 Revenue for every foot2 (such as Apple Store)
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 Production of goods per unit time (Productivity of supply chain management)
 Milestone per time (Productivity of employees at the time of developing product).
 Business Strategy diagrams:
In every organisation the management analysis the macro and micro environment and
know actual position of the business. After that prepare effective strategy that helps to improve
all the business activities and performance in positive manner. In the context of Apple require to
apply effective marketing strategies such as BCG matrix, marketing mix, online trading and E-
commerce. Mainly through E-commerce utilise by the company to attach huge customers and
prove services easily. The manager of the company focus on the effective software where able to
keep all the information on top as compare with other relative organisation (DesJardins and
McCall, 2014). The manager of Apple company develop customise website where provide
information according to their competitors analysis basis. The company follow B2B e-commerce
where direct contact with the customers and sell out their products. To sell out products consist
of laptops, iphones and other gadgets.
PESTLE Analysis
It is a external analysis is set framework which is utilised by the different organisation in
order to examine and observe the macro environmental factors that show impact on the
organisational efficiency ( Rosenbach, 2018). There are conducting PESTLE analysis of Apple
Inc. in order to analysis the performance such as:
Political: In this factor consist of stable politics, market lobbying, political activities,
bureaucracy etc. Apple wants to achieve their key objectives like increase profitability and it will
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focus on the all political aspects as per the present situation. Through political lobbying continue
raise up expenditure in Apple from past years that impact as $6.62 million in 2017. So for this
require to follow all the related laws that help in effective performance (Grant, 2016).
Economical: These factors show impact in direct manner where consist of exchange rate,
currency rate, economic cycle and inflation rate. In the context of auto mobile industry, Apple
famous as leading company that face different hazards mainly related to income generation, IT
product distributor that influence by the labour wages. Due to raise cost of the labour in chine
would focus on the Apple that manufacturer more products. Recently changes in the global
market impact on the Apple in negative manner.
Social: The particular factor related with the social activities where consist of all the
social and cultural aspect that increase as per the brand image. In the context of Apple, it get
success in effective manner and threat until offer inexpensive or simple to use devices as per the
market demand. Different countries such as India as well as china buy products in bulk from
Apple in continuous manner. So it is impact on the brand value as well as profitability of the
business.
Technological: There is consisting of all the technical factors that impact on the business
performance. In the context of the Apple technology plays important role because it is mainly
dealing in to different software with special features that provides in mobile and other gadgets.
Due to various technological innovation become reason of the strength like batter back up,
camera quality that make each more effective.
Legal: It is connected with the legal laws and regulations which is important to follow
due to conduct different business activities. If company do not follow all the rules and
regulations so spoil market image and face penalty where government engage in the functioning
and operations. The manager of Apple follow all the telecommunication principle in order to
attain supports from the new industry (Ivolga, 2014).
Environmental: In this factors consist of different variables that based on the risk in the
context of Auto mobile sector. There are consisting of different environmental regulations and
laws that require to follow by mobile company to get success and growth in effective manner. In
case of ignore this factor face litigation that impact on brand image. Apple imports several
Chinese products from China where air emissions become as critical problem. It can impact on
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the Apple business as compare with other company regarding top manufacturing cost and consist
of making procedure as per new legislation.
External Audit
SWOT Analysis: It is a internal analysis that evaluate all the internal factors that impact
on the organisation in direct manner. There are conducting SWOT analysis to analysis those
effective factors of Apple such as:
Strength (Internal) Weakness (Internal)
 Apple is one of the leading organisation
in Auto mobile sector and successful
brand which have good position in the
market as compare of rivals (Jurina,
Vrecko and Barilovic, 2014).
 Apple company can follow premium
price policy that helps to generate high
profitability margin.
 Furthermore, a Stanford approach
regarding to competition and develop
effective marketing strategy to make
effort to adopt advanced technology.
 The main weakness of Apple to have
constrained supply chain in order to
follow effective approaches. Such as
particular dealers play wisely so
company face slower supply of goods
and raise up ware hose cost.
 Due to high selling of the mobile
phones and other products deduct the
value of the brand that become reason
of weakness.
 There is company required to focus on
the end market sector because follow
the premium pricing strategy. Hence
lower and middle class people can not
afford their products.
Opportunity (Weaknesses) Threat (Weaknesses)
 Apple have opportunity to improve
distribution system and make it our
strength. From the disadvantage
company learn many things.
 Company can use advanced technology
for software that use to attract people
(Schaltegger and Burritt, 2017).
 The Apple corporation face strong
competition in auto mobile sector that
become main issue. Such as Samsung,
Lenevo etc.
 Due to raise labour cost impact on the
firm productivity as well as profitability
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 They are applying effective marketing
approach to reach more customer and
introduce with Apple products and
services.
and earn limited profit margin.
 The company face the problem of
imitation challenge that occur due to
available different varieties at the local
as well as private companies.
Limitation of Micro Economics
The micro economics can help an individual to achieve knowledge about the behaviour
of organisation and specific individual in relation of creating important decision. The whole
process consist of proper distribution of existing resources that supports in better connection
among the business entity and individual. There are discussed some limitation of micro
economical factors are mentioned below:
Lower price of goods: In the current competition, businesses are greedy to stay at the top
of their rates, so other companies will profit. To order to ensure that consumers are always
committed to Apple's brand, there should be constant price increases according to consumer
specifications (Moncrief, Marshall and Rudd, 2015). They are also needed to change the brand
according to customer requirements to reduce the usage of replacement goods that are readily
available at various prices on the industry. It is all sufficient make effective outcomes that use to
measure drawbacks of micro environment.
Breach of contract: Different organisations wants to work at international level so for
this required to contract with the local company at specific place. In the context of Apple breach
any agreement then conduct legal activities with particular fee that show impact on profit
margin.
Ignorance of governance rule: Government of every organisation develop effective laws
regarding to different industry which is necessary to follow by all the organisation to conduct
their business activities in particular sector. Hence, any negligence of government laws would
make work panic and increase different issues like close down of business, bear to pay too much
plenty etc (Raziq and Maulabakhsh, 2015).
Potential Benefits for the Company:
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