PESTEL analysis of Apple company

Pesetl analysis of apple company

Political

The political environment that Apple operates in is quite stable and has been over a long period of time. However, since Apple’s products are widely distributed and sold the world over, there is high risk of problems occurring in some countries where trading with Apple’s distributors is not feasible. Terrorism factors come into this, as because of such factors, Apple’s products would not be able to reach these markets and hence restrict the growth of the company. Some governments may interfere with different protectionism policies like in Japan and hence Apple had to adapt its policies. Governments may even enforce barriers to entry however due to the global nature of Apple’s operations, this factor doesn’t have much influence. Furthermore, since one-third of Apple’s production is outsourced, these factors may even interfere in the timely manufacturing of the products.

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Economic

Economically, the industry has been in a stable shape ever since the 1990’s recession and the 1999’s bubble burst. A lot of companies went down as a result and those few years weren’t good for the technology companies. Also since a huge number of computers are purchased by the government, any political problems or economic recession activity has a negative consequence on the computer industry and thus on Apple. The recent recession has slowed down the economic growth of the company from the inside and as well as in the decrease in demand of computers. However, this decrease has been met with increase in sales of company’s other products. Also when the economy shows a sign of improvement, consumer spending and investment might increase as well thus improving the whole industry.

Legal

Being a global company Apple has to sift through different legislations area wise which can be quite different from those at home. These may cause problems to the company as discussed above. Furthermore local regulatory authorities and bodies like Copyright Arbitration Royalty Panel (CARP) and Recording Industry Association of America (RIAA) can impact the working of the company. Due to several copyright infringement cases, the Music Online Competition Act had to be tweaked to provide security. These laws and changes impact the company a lot and promote legal downloading of media and curb piracy. Also read R yanair PESTLE analysis

Social

The social trend in the case of Apple is very important because consumers know that Apple’s products are innovative, trendy and they carry a fashion statement. Having a hi-tech Apple computer or an iPod is a way to show others that a person belongs to the ‘cool’ class.

Due to the increasing usage of computers and internet in the education sector, there is more demand of computers with applications that help students to learn. Also due to better perceived efficiency and awareness, the global trend is increasing in the usage of computers which is a sign that the industry is still growing.

Environmental

With the advent of modern computing, technologies keep on evolving whole the old ones get obsolete. Organizations and consumers have to regularly changing their machines to stay in touch with the latest applications. The problem is that these old systems are of hardly any use anymore and thus computer wastage has been increasing. Computer manufacturers are now ordered to develop machines that use lesser electricity or that can be recycled and are ‘green’ in some way.

Technological

Being a technological company, Apple Co. has ever been in the limelight by developing quality and innovative products. This trend grew from the start when Apple saw that the industry giants like IBM, HP and Intel were making headway into the technological development of hardware. To match the capabilities powered by the new chips and hardware systems, companies like Microsoft and Apple competed for the best operating system. Soon this fight took a different turn when Microsoft took the lead while Apple became focused on a particular niche. Ever since then, technology has drastically improved giving the company more chance to shrink the hardware size and make it even more faster and powerful. Even more devices can be connected to the computer enabling wireless communications and development of media devices.

References

Iliev, V., Lindinger, A. and Poettler, G. (2004). Apple Computer Inc. [Internet]. Available from <http://www.andreaslindinger.net/downloads/strategicmgmts-lindingeretal.pdf> [Accessed August 13, 2010]

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