PESTLE Analysis of Apple Inc. Apple Inc.

PESTLE analysis of Apple Inc.

Apple Inc. is a technology company, which designs, produces and sells goods of the Computer, Music and Mobile-Phone Industries. It is differentiated by its brand-perception and identification. Over the last couple of years, Apple has become a cult-brand, thanking its life to iTunes, QuickTime and iMaclines. Apple Inc.'s short-term goals are currently increasing the sales of the just launched iPad (the most innovative web-browser in market). In the long-run, Apple aims are to be on the top of the market, becoming the number one leader.

Products of the Apple are profitable. Be it the best of time, just a single or double Windows OEMs earns a profit. We now see even Microsoft had no obligation but to layoff workers so that it to keeps its head above water. Dell as well is seen taking a major hit. Low-end computers tend to be cheaper that customers are capable of buying, although they are not so much cheap to manufacturer. Dell at one time was notorious in applying its low-end so that they could get the customer, though Apple do not posses resort to bait- and-switch tactics.

Apple is therefore seen as a big corporation with a huge startup, with a corporate culture that is geared towards engineering and is known to minimize as much as possible the bureaucracies as well as taking absolutely good care for its employees. The corporation is run by the engineers as Apple does not have a lot of product management with really small project teams that are driven by engineers (Business Insider, 2011).

The objective of the paper will be to look at the various aspects, ranging from the mission, financial objectives to the market mix that enables the Apple Inc. To be a perpetual leader in it field and the drive that keeps it the leader of invention.

Market Summary

Products of the Apple are profitable. Be it the best of time, just a single or double Windows OEMs earns a profit. We now see even Microsoft had no obligation but to layoff workers so that it to keeps its head above water. Dell as well is seen taking a major hit. Low-end computers tend to be cheaper that customers are capable of buying, although they are not so much cheap to manufacturer. Dell at one time was notorious in applying its low-end so that they could get the customer, though Apple do not posses resort to bait- and-switch tactics.

Apple Computer Inc. is a multinational company which is based in America that it dealing is on computer software's as well as consumer electronic goods. The widely known hardware products of the company are Macintosh Computer, iPhone and iPod, while the software products are itunes, Mac operating system among others.

PESTLE analysis of the Apple Inc.

PESTLE analysis is a method of strategic planning that is utilized in the analysis of the Political Economic Social Technological Environmental and Legal aspects that Apple Inc. encounters in their daily operations. It is identifying the factors from internal and external that is favorable and unfavorable in achieving an objective.

Political analysis: Apple is known for its numerous service lines and products that it designs, develops and markets. This display of numerous products and business of numerous kinds with education institutions, professional bodies and governments it is not absurd to wonder what Apple is really good at since there are diverse products from Apple.

The other political concern is the issue of varying taxation that is found in the various countries where Apple has diversified into. The difference in the tax rates means that the management has to keep varying the prices of the products with the country it invests in. unfortunately, some taxation laws are very stringent on imported goods hence Apple would suffer in such countries where goods from outside the country are subjected to heavier taxes.

There are also some countries with very strict labor laws and laws or remunerations. This means that it will be a challenge for the top management to be conversant with the laws of these countries, and at times these laws may mean loss of profits for the organization.

Economic Analysis: Apple has been on the trend of opening numerous retail stores in the U.S.A. Management Paradise (2010) estimates that in 2005 they opened 102 retail stores in the U.S.A. These stores could be potentially beneficial the Apple could be hurting the resellers to the extent of killing some of them. Taking into account that the resellers still constitute more than 50% of the domestic sales, this means that their closures may mean the decline of the sales of Apple products as well.

Apple was also affected by the recession just like all the other businesses. There were layoffs that happened mostly in the overseas stores. There was also a decline in the demand for the goods that they produce hence negatively affecting the incomes.

Apple has several opportunities that it can still exploit to enhance its existence in the communication and IT market. There is opportunity by the Apple of developing its music player as well as iTunes technology into the format of the mobile phone. The developed Rokr mobile phone which was developed by Motorola, has advance camera system, stereo speakers and colored screen. Apple iTunes music store version has been developed in the phone to enable users of the phone to manage the track they store on it. There is availability of downloads via USB cable, whereas software within the handset pauses music in any case there was a coming in phone call. Strategic alliances and new technologies offer Apple with opportunities.

There are Podcasts which are downloadable radio shows that are capable of being downloaded from the Internet after that they are capable of being played back on iPods as well as the rest of MP3 devices whenever they want to. There is free subscription to Podcasts for the listeners, as ultimate revenue is generated from subscription which has been paid or from generated sales revenue of the rest of downloads. Rise up in viruses as well as worms on PCs makes Apple to develop the antivirus solution.

There is large population (Gen X&Y) that is highly individualistic as well as brand conscious. Apple's ties with the rest of the companies are weak; it is capable of developing a relationship which is good for joint ventures. The sales of computer through online are rising with quick speed. The growth of market for the laptop is high; Apple Computers are supposed to focus in developing new models to cater for the need of the customers.

Apple has pressure of increasing their music download file's price from the industry of music itself. Most of such companies make more money out of iTunes such as downloadable music files as compared to their sales of original CD. There has been sale of up to 22 million of iPod digital music players in Apple as well as over 500 million songs from its iTunes music store. This accounts for U.S. 82% of the entire downloaded music legally. It could be observed as a commercial weakness if the company gives in to the music producers, though the company is resolute.

Apple has had one of the most amazing marketing strategies ever put in place. They have been in a position to perpetually expand their market base despite the highly priced products that they usually introduce in the market. Some of the marketing strategies that are used by Apple are as below as noted by Steve M. Chazin (2007) who is a former Apple marketing executive and a consumer market expert.

Social analysis: In the World, Apple is among the healthiest and established IT brands and it contain a highly loyal set of customers who are enthusiastic and advocate the brand. This loyalty which is powerful imply that Apple recruits new customers as well as retaining them, for instance they return to get more products as well as services that offered by Apple, and the company as well get the privilege of their new product extension to them, iPod being an example, (Adam, 2009).

Many individuals and Companies tend not to look at Apple as being compatible with most software. It is common to download free music from the rest of the online sources without fee a thing that is not possible with the iTunes which may impact the sales iTunes. Software of Apple, hardware and Cell phone are always expensive than the rest of the competitors like Dell. The recession which is long lasting is capable of impacting the sales of the company because of product and service's prices. Technology switch is quite fast.

Technological analysis: Apple has been known to be one of the best organizations when it comes to technological advancements. It is known to be on the leading edge of technology and doe improve the existing technology so as to ensure that they come up with the best possible design and functionalities.

Apple Computers have the capability of developing their own hardware plus software. It can give a face-lift to notebook lines and desktop. The web technology is capable of being utilized in improving awareness of the product as well as sales. It has low debt which is more manoeuvrable. In 2006 it made a partnership with Intel Computers that made it more stable and it has Strong Research & Development, Department (Hill, T. & R. Westbrook, 1997).

Like any other company, Apple is also susceptible to faults and drawbacks. There had been reports that there could be a faulty screen in Apple iPod Nano. To this effect, there has been a comment by the company that the batch of its products contains screens that when under impact they break, and that faulty items were to be recalled and replaced by the company. To add to this was an earlier problem where faulty iPods batteries were detected, a situation that forced the company to give customers free battery cases.

Legal analysis: like any other organization, Apple faces a number legal cases and legal situations that it has to at times fight it out in court with the aggressors. One classic example is Apple won a legal case in 2005 that made the Bloggers to name the information's source that pre-empted the launch of products of Apple. There was a suspicion that the own employees of the Apple happened to leak confidential information on their new product of Asteroid. All the three persons who were prosecuted owned Apple tribute sites, and they were big funs of products of the company, (SWOT analysis - Mac Forums, 2010). There was appearance of blogs on the sites and they had no choice but to reveal their source. From that ruling, commercial confidentiality was seen as more essential as the right to speech to individuals. Apple tends to be exposed to leaks that are capable of costing those profits.

Apple announced in early 2005 that it was to stop its relationship which has been longstanding as a chip supplier with IBM, and it was suppose to turn to Intel. A section of industry specialist gave their comments that the swap was capable of confusing consumers of the Apple. The life cycle of products of the Apple's products tend to be very small therefore revenues are relying on the launch of services and products which are new. It has weak presence within market plus publishing and education. There is also slow turn around to the high demand of the products. Market share of the Apples tend to be far behind from main competitor Microsoft. Their relationship between employee and Steve jobs in the past seem not to be good hence there was loss of reputation.

Environmental analysis: there are several external factors that Apple has to look into so as to keep itself relevant in the industry. Amidst the stiff competition that there is in the market, Apple has ensured that their marketing department is well organized and well equipped with the right people who will ensure that the marketing process is well executed. The marketing team has the marketing personnel, the sales executives, marketing manage with the senior director of marketing heading the team to a successful marketing of the Apple products.

IT companies like Apple is facing, is the high level of competition within the technology market taking into account the highly dynamic technological world. When a company is successful it attracts competition, therefore Apple works so hard in their research and development and marketing for them to maintain their competitive position. Apple Mac and iPod's popularity tend to be subjected to demand, and is going to be affected in any case economies starts to falter and demand falls for their products.

A high product substitution effect exists within innovative as well as fast moving IT consumables market. Like now MP3 and iPod are ruling today, while just yesterday it was DAT, CD as well as Vinyl. The technology of tomorrow may be totally different. Wireless technologies are capable of replacing the need for physical music player, hence this presents a very stiff environment under which the company operates hence very it is very essential to have the right approach to the prevailing business environment (Wendel Clark, 1999).

Marketing Mix

Apple has one of the soundest marketing mixes that there can be. It has taken care of the 4ps of marketing mix appropriately (Marketing Teacher, 2011).

Products- there are various products that the company deals in, these include Macintosh Computer, iPhone and iPod, while the software products are itunes, Mac operating system among others. Apple has always taken the initiative think for the client. Stephen Jobs always said that the client does not know what they wants hence it is the responsibility of the organization to think for them instead of asking them what they would want in an item. Initially this approach was criticized by competitors and at last it worked very well for the company.

Apple usually uses the aspect of going an extra mile. Apple always tries to give the clients something more to talk about apart from just the product alone. The packaging is one such thing that Apple has always focused on. The packaging for an iPhone is so elegant that one would not want to discard it, velvet touch, exquisite design and a dusting cloth add to its value hence making the client say something more about the phone.

Apple is also known for its quality products-this is one of the areas that Apple has never compromised on and all their products are as a result of keen manufacturing and extensive research. This helps them to keep the customer base that they have formed.

Price- is yet another aspect that Apple has managed to set and ensure that their clients fit into the price range. Their prices are premium prices since they are setting a standard and a class. It has been widely observed by individual observers and analysts that the Apple as a whole targets premium and high end markets only. This is seen from their pricing and the advertising of some of their products (as they are known not to advertise their products much). This can be further proven by the premium entry price that it sets for each product that they introduce into the market.

However, another observation of the target market that is equally viable is the aspect of considering Apple as one company that does not target masses but individuals hence build exceptional products for them and also gives these individuals the room to decide the manner in which they want to use the products (Matt Assay, 2010). This is the reason why Apple forms and develops a brand community as seen above.

Place- Apple has ensured that they have Apple only shops across the globe since it is and international brand. It has more than 200 retail stores across Asia/Pacific, Africa, the Middle East Europe and Latin America making their products easily accessible through the smaller dealers and smaller retailers. Apple has also ventured into the idea of Exclusive Apple stores- these have eradicated the problem of misinformation about their products in a situation where the products are mixed with other brands. The Apple only shops also create the customer class and make them feel proud to belong to the class of those with Apple.