Sample environmental analysis: PEST analysis of Apple Inc.

Apple Inc. is an American multinational technology company known for a range of iconic consumer electronic devices as well as software and online services. Apple is the first $700 billion company in the history of corporate America (Kopytoff, 2015). This momentous achievement is a result of introducing innovative products to include the iPod that has dominated the portable music device category, and the iPhone and iPad that have conquered the mobile device category.

Considering the competition in the environment as well as the changing preference of consumers, the company still needs to continuously progress in order to maintain its market position and overall reputation. This paper provides a sample environmental analysis of Apple using PEST or political, economic, social, and technological analysis to evaluate its current competitiveness against external factors that might affect its current or future business interest.

Political analysis

The long tenure of Apple in the business would mean an established and thorough understanding of the political landscape of its environment. In other words, it is safe to assume that the company is fully aware of its political or legal and social responsibilities concerning tax compliance, trade restrictions and tariffs, labor laws, and environmental laws, among others. However, because it operates as a multinational company, it needs to maintain consider the global political landscape and the respective political landscapes of countries where it has considerable business interest.

There have been several allegations that the suppliers of Apple in China have been committing several labor violations. From poor working conditions that disregard worker safety (Gough and Chen, 2014) to employing individuals under the legal working age (Garside, 2013), critics and concerned organizations have accused Apple of neglecting its oversight responsibilities. Accordingly, Apple should not disregard its responsibilities across its supply and value chain just because its contractors are in other jurisdictions and outside the actual workforce of the company.

Progress in digital communication technology has also raised novel concerns about privacy rights across the globe. The European Union has introduced a draft called the General Data Protection Regulation that would compel companies and organization to maintain measures and systems needed to protect the privacy rights of individuals, especially in this era of digital communication, cloud computing, and social networking (European Commission, 2014).

Other political hurdles that could affect the performance of Apple include property rights. Note that the company has several hits and misses concerning its patent case against Samsung. Simply put, there are jurisdictions that favored Apple while there those that favored Samsung (Tibken, 2014). There is also the need for the company to recognize regulatory policies in other countries. For example, in China, the distribution and sale of iPhone was delayed due to regulatory issues concerning the use of mobile frequencies and network access (Clover, 2014).

Economic analysis

Because Apple is a multinational company, it has business interest in several regional markets. The economic conditions in these regions have direct impact on its performance.

Currently, China and Indonesia are viable regional markets for Apple. The economic conditions in these two countries are favorable for the company. Apart from the fact that these two have sizeable population, income is growing alongside the rise of the middle class (Singh, 2010; Bajarin, 2015). The growth income would definitely mean that consumers would have more buying capabilities. Remember that Apple products are relatively expensive, especially when compared to their counterparts. However, the company has a strong and reputable brand image that has been instrumental in selling these expensive products to non-luxury market, especially in regions with considerable income levels.

Another pressing challenge involving economic factor would be supplies and suppliers. Technology companies, including consumer electronic companies are competing for these supplies and suppliers. There are also instances when a particular supply or material is unable or expensive due to economic constraints and scarcity. Apple, for example, had failed making its devices cheaper because of expensive supplies. It is also important to note that when companies compete for such, they often try to corner a particular supply or supplier to gain competitive advantage over competitors (Arthur, 2014). These supplies and suppliers are limited and in several cases, companies including Apple are competing for scarce resources.

Social analysis

Digital communication through the Internet and social networking has become a critical part of everyday life. This is evident from the growing usage of digital communication devices and related technology.

A report from Nielsen (2014) revealed that 171.5 million people in the U.S. or 71 percent of the total American population alone own a smartphone device. The younger members of the population are majority owners. To be specific, 71.4 percent of population under the age of 18 owns such a device while 85 percent and 86.2 percent of respective age population groups 18-24 and 25-34 owns such a device. These figures illustrate that younger individuals, from teenagers to young adults, have higher rate technology adaptation.

Older populations are also starting to embrace smartphones. The same report from Nielsen revealed that 70.8 percent, 61.1 percent, and 46.3 percent of the age population groups 45-54, 55-64, and 65 and above respectively own such a device.

Digital communication and related technologies are also becoming popular elsewhere in the world. Accordingly, due to level of economic development as demonstrated by improvements in the income in other countries such as India and China, the rate of technology adaptation has become higher (Singh, 2010; Bajarin, 2015).

The growing consumers of digital communication devices, the Internet, and social networking have stirred the digital revolution and have further promoted the digital information age across the globe. This phenomenon is the reason why innovative technological companies such as Apple have become highly valuable—even more valuable than companies in other established industries.

Technological analysis

There are several technological developments that could change the environment of consumer electronics and computer industries. For example, wearable technologies are becoming more popular and integrated within the digital revolution as companies are introducing several devices that have practical day-to-day functions (Sung, 2015).

Several companies are also advancing Internet access across the world. Both Google and Facebook, for example, have launched several initiatives to provide affordable Internet access to remote parts of the word. Upon completion, these initiatives would add more Internet users that would represent expansion to the market for digital products and online services.

Without a doubt, the ongoing digital revolution remains a key driver in several technology-related industries. It is also worth mentioning that the emergence of smart and connected devices from home appliances and wearable to automotive vehicles and infrastructures creates an ecosystem for supporting the consumer electronics industry and Internet service industry.

Reference

Arthur, Charles. (2014, November 14). “The desperate struggle at the heart of the brutal Apple supply chain.” The Guardian. Retrieved on 30 April 2015 from http://www.theguardian.com/technology/2014/nov/14/sapphire-gt-advanced–brutal-apple-supply-chain

Bajarin, Ben. (2014, December 2). “Why India will be the world’s second biggest smartphone market.” Time. Retrieved on 30 April 2015 from http://time.com/3611863/india-smartphones/

Clover, Charles. (2014, September 18). Apple’s iPhone 6 debut in China delayed by regulators. Financial Times. Retrieved on 30 April 2015 from http://www.ft.com/cms/s/0/be699b66-3f47-11e4-a5f5-00144feabdc0.html#axzz3YnUa1o2z

European Commission. (2014). Protection of personal data. Justice. European Commission. Retrieved on 30 April 2015 from http://ec.europa.eu/justice/data-protection/index_en.htm

Garside, Juliette. (2013, January 25). Child labor uncovered in Apple’s supply chain. The Guardian. Retrieved on 30 April 2015 from http://www.theguardian.com/technology/2013/jan/25/apple-child-labour-supply

Gough, Neil and Brian X. Chen. (2014, September 4). Groups accuse Apple supplier in China of labor violations. The New York Times. Retrieved on 30 April 2015 from http://www.nytimes.com/2014/09/05/business/Apple-Supplier-Is-Accused-of-Labor-Violations.html?_r=0

Kopytoff, Verne. (2015, February 10). Apple: The first $700 billion company. Fortune. Retrieved on 30 April 2015 from http://fortune.com/2015/02/10/apple-the-first-700-billion-company/

Nielsen. (2014, September 5). “Mobile millennial: Over 85% of Generation Y owns smartphones.” Nielsen. Retrieved on 30 April 2015 from http://www.nielsen.com/us/en/insights/news/2014/mobile-millennials-over-85-percent-of-generation-y-owns-smartphones.html

Singh, Sameer. (2013, January 17). How many iPhones will sell around the world. Business Insider. Retrieved on 30 April 2015 from http://www.businessinsider.com/iphone-5-sales-by-area-around-the-world-2012-9

Sung, Dan. (2015, January 26). What is wearable tech? Everything you need to know explained. Wearable. Retrieved on 30 April 2015 from http://www.wareable.com/wearable-tech/what-is-wearable-tech-753

Tibken, Shara. (2014, March 27). Apple v. Samsung: All you need to know about latest patent trial. cNet. Retrieved on 30 April 2015 from http://www.cnet.com/news/lg-mobile-ceo-says-he-expects-to-sell-8m-g4-units-this-year/

Note: The content above is a sample environmental analysis for a particular company. Extensive details are omitted for the sake of brevity. If you need help writing an academic paper about environmental analysis or any essay and paper relating to business, please visit our website and talk to our 24/7 customer service representatives. Online essay writing tutors from WeDoYourEssay.com help students come up with high quality essays and academic papers. These professionals have proven records of accomplishments in providing guidance in business-related topics.

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