Apple Inc. and the Macro Environment
Apple Inc. and the Macro Environment
More or less, every economic factor has an effect on the operations of Apple Inc. These may include; current economic situation (boom, recession, etc.), credit terms, inflation or deflation, strictness of interest rates, unemployment levels, stability of exchange rates, stock exchange trend, etc. Apple’s business can be affected by all these factors either positively or negatively.
For example, during the inflation periods in the United States of America, the purchasing power of the people had decreased and as a result of this, the sales of Apple’s products had decreased with it. To make matters worse, The US dollar had also decreased in value, and so, Apple decided to purchase itself foreign currency to minimize the effect of inflation. This will allow for their revenue from international markets to increase.
Social factors such as consumer preferences, life priorities, income groups, and perceptions about different brands have a huge impact on the sales of Apple’s products. People all over the world are well aware of its brand image. The social environment has a huge positive impact on Apple for their products are seen as an image for today’s modern individual’s life. People see it as highly reliable and innovative, however they are also seen as highly expensive and the software very limited for people who wish to use their iPhones for more than just phone calls and emails. This regrettably influences people to seek a competitor’s products for a lower price or with more features.
Apple currently has the spotlight as the market leader in innovation. However, what Apple fails to realize is that technology can become outdated quite quickly (sometimes over-night) and yet Apple casually cruises through the years releasing new models of products with very little hardware or software changes compared to the previous models. Their refusal to continuously bring innovative products will result in other market leaders stealing their throne. For example, Google’s Open Source Operating System, Android, has resulted in the migration of many Apple users to Android smartphones due to the reduced costs and in some cases such as with the Sony Xperia or the HTC One, their hardware specifications far exceeded that of the latest iPhone model.
Political & Legal Environment:
Apple has to duly adhere to all the rules and regulations for each company that they do business with such as tranquil rules and regulations, tax rates, tariffs. Etc.
If they do not keep an eye on the changing government behaviors and patterns, it may be rather difficult for Apple with regards to marketing and the selling of their products and in severe cases, their products may be banned altogether.
Apple also has to ensure that there is no copyright infringement in their products, or that of competitors. There have been many cases where Apple and Samsung confront each other in a legal battle over copyrighted material/ideas/names such as the rounded launch buttons in Apple’s home screen.
Apple is always finding ways to reduce their carbon footprint and as a result, they have a positive reputation with regards to their care for the environment. Apple has very few disagreements with environmentalists because the manufacturing process of their products usually follows all of the laws and regulations regarding the environment. Furthermore, Apple also encourages its users to dispose of harmful products such as used batteries and fluorescent backlighting systems properly at their nearest iStore. Apple’s packaging is usually made of either plastic or glass, which is easily recycled and only a few products are distributed in cardboard boxes.
Apple’s data centers are also 100% powered by renewable resources!
Globalization describes the mobility of goods, services, labour, technology and capital throughout the world. Apple has increased dramatically as an international business and have harnessed globalization and used it to their advantage. For example, by using their most famous piece of Apple software, iTunes. A large variety of songs are available on iTunes and because the business has offered this on the Internet and as software has increased their sales internationally as it has become accessible internationally. The products that Apple provides are sold internationally.
Stores exist all over the world, allowing the business to become an international company. Not only does the use of stores help Apple to become an international company but the use of the Internet also allows this to occur. However, by going international with their products, they have also broadened their spectrum for competition. Not every country is as passionate about Apple’s products as America is and this as a result, could have a negative effect on their sales. However due to their strong brand image and good reputation, many people around the world seek the glorious Apple Logo for their brilliant, bright, innovative products.