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Apple Inc., which has been previously referred to as Apple Computer Inc., is a technology company, which specializes in designing computers, mobile phones and other music electronics. This company has strongly differentiated its products by means of the use of brand perception and identification, which has helped to create a strong and loyal customer base, not only in America, but also in the whole world. The company’s current short-term objective is to increase the sales of its new iPad, which is browser-enabled. Its aim is to become the best in the industry in the long-run (Wangjing, 2011).
One of the fundamental principles of the corporation is to lead the customers rather than follow them. This implies that instead of waiting for customers to tell you what they want, it is better for you to tell them what they need. Apple Inc. surprises its customers by giving them new and unique features in gadgets and making its products more superior than those of competitors. The company also focuses its resources on a few models so that it can be the best in what it does. This way Apple manages to increase its sales.
This paper seeks to analyze the corporation’s market, as well as political, economical, social and technological issues that affect it. The analysis of these environmental factors can also be referred to as the PEST, PESTLE or STEP analysis. These factors can promote or hinder organizations success, and companies should not just be aware of them, but manipulate them in their operations in order to exploit their full potential.
Apple Inc. has established a strong market for its products globally thanks to the level of innovation, which surprises kits customers. The company’s targeted markets can be categorized according to age, whereby people between 12 and 35 years are referred to as music fans. The company develops for them iPods and music-enabled phones to match their requirements. However, people between the age of 18 and 60 comprise a general market for all company’s products. The market segmentation is not based on gender, but on economic and social classes that greatly determine what individuals purchase (Plunkett, 2008).
This market can be also be segmented technologically into smaller industries, such as the computer industry, to which Apple has contributed a lot, especially through its laptops and TV, the Smart Phone industry provided with iPhone being a key player, the cyberspace music industry dominated by iTunes and the music device industry dominated by iPods. This company has tried to satisfy all classes of people by offering simple and highly sophisticated products in the market.
Different lifestyles have also been served differently by providing technology for both pleasure and business. The company also tries to reach different levels of people professionally by availing products for as low as fifth graders and as high as professional filmmakers. This ability to reach and satisfy particular markets has resulted in the company’s success.
Apple Inc. competes directly with such companies as Dell, HP, Compaq and Gateway, just to mention a few. The survey conducted in 2009 showed that Apple was at the top in the market with an average rating of 80%, while HP, Gateway and Dell scored 63%, 66% and 58% respectively. These results depicted that without any doubt, Apple customers were the most satisfied because of the company’s efforts to meet and surpass customer expectations. It has also been the reason for its market growth.
Market growth curves show that the company’s customer base has been expanding with significant growth since 1997 slightly decreasing in 2000. Ever since the company has been experiencing steep market growth, especially in foreign markets, connected with its outsourcing strategy. This strategy gives the company an advantage of the low-cost production of certain components, as well as winning the local market. This strategy had very unique impacts on the nature of the company’s market, where the United States was ranked the smallest market for iPhones and iPods in the survey that involved the top ten leading users of these products.
The analysis of organization’s strengths, weaknesses, opportunities and threats is very important as it can tell us where it is coming from, as well as where it is going, (QuickMBA, 2010). Some of this company’s strengths include a diverse experience in both the hardware and software industries, a low-debt financial structure, which gives it a plenty of room to expand, a good brand loyal market that keeps on growing and a sophisticated research and development department. However, this company has not exploited the benefits that could have come out of a strong relationship with Microsoft, which is a market leader in the production of computer software. Its products also seem to be short-lived because of the dynamic nature of the industry.
This company has a plenty of opportunities to take advantage of, namely the booming computer antivirus market, Internet selling, partnering with other companies for synergy creation, as well the increasing demand for portable computers. However, the company should be well prepared for situations that threaten its success. They include the competition from laptop and software manufacturers, low-priced products in other countries, and the speedy development of the computer technology.
This PEST analysis helps us understand environmental factors surrounding the corporation, which can result in corporation’s significant success in the future. These environmental factors can be both internal and external. The company has very little do with external factors, apart from just adopting itself to them, while internal factors can be for the benefit of the organization. These factors are categorized into:
As we all know, Apple relies extensively on the foreign market. For instance, the company reported a 52% sales volume in foreign markets in 2007, while in the United States it only accounted 48%. This means that the company depends a lot on the international relations. For example, unfavorable incidences of war and terrorism have a great influence on its overall performance. The company also outsources many components from such countries as China, the Czech Republic, Korea and Ireland. Political conflicts can impede its ability to react to massive changes in the market (Ramosaj, A. et. Al. , 2011).
The Apple’s global nature forces the company to bear huge foreign exchange risks. The fluctuating strength of the dollar can lead to very devastating consequences. This has forced Apple to take hedging measures, such as the purchase of foreign currency, which keeps a lot of company’s funds tied up (Linzmayer, 2011). In addition, the global economic depression seems to have a larger impact on the company, as commodities are now viewed globally as expensive, and buyers find it hard to spend on the company’s products, which are generally luxurious.
Globalization is connected with social issues because of differences in cultures all over the world. Apple studies and adapts to these cultures, wherever it expands. Globalization also requires the extensive use of technology, which puts the company at a strategic point of being viewed as the world’s leader of technology.
The company has also reshaped the music industry for the last decade to the virtual industry, which we have today, the market of which is the cyberspace. Therefore, its products are well-accepted globally, since the company has the largest virtual media store. Most people want to be associated with the company in order to portray a modern lifestyle.
People are embracing technology in all parts of the world. This has been the reason for the growing market of computers and mobile phones. Apple takes advantage of this by giving consumers what they need through vigorous creativity and innovation. The life of technology also seems to be very short, which creates a wide market for the company threatening its performance.
Apple is forced to invest largely in the research and development of products to ensure its survival in the future. Creativity and innovation determines an organization’s success in this industry. By improving its technological products, companies do not need huge marketing budgets to sell. Apple believes in doing work and letting the competition follow, which has always been the reason behind its success.
Apple Inc. has come a long way, and the company’s success should be associated with the former Chief Executive Officer, Steve Jobs, for his exceptional talent in technology development, as well as leadership skills. His death was thought to mark the end of the organization, but its latest results proved otherwise. This company thrives in the current environmental conditions by exclusively analyzing them and using them to its advantage, as well as adapting to them, where necessary. The future of the organization seems to be secured by its very active research and development department. Apple has been also pursuing its opportunities to ensure that it gains the competitive edge in the market. The company has been aiming at establishing good relationships and partnerships with key market players to ensure that it gives its customers nothing but the best. The company has also very powerful strategies suggested to implemented in the future, especially concerning iPhone and iPad technologies with the 4p’s model that comprises price, product, promotion and place.