PESTEL Analysis for Apple

PESTEL Analysis for Apple

A PESTEL analysis for Apple indicates the political, economic, social, technological, environmental and legal factors that affect this company. PESTEL analysis is a tool or framework that marketers use in analyzing and monitoring factors of the external or macro-environment that can affect an organization. Apple Inc. is a recognizable and visible brand of consumer electronics. The company specializes in designing, manufacturing and marketing media and mobile communication devices, portable music players, personal computers, and related software, peripherals, services, third party applications and digital content as well as networking solutions. Its products include Apple TV, iPod, iPad, iPhone Mac and OS X as well as iOS operating systems, and iCloud among others.

Detailed PESTEL analysis for Apple

  • Political factors

The performance of Apple in every market where it has its operations is subject to various political factors that include political stability. For instance, the call made by Dmitry Gorotsove, a Russian Parliamentarian, in stopping the lawmakers from using iPads and iPhones in protecting foreign services’ eavesdropping is an example of how political factors can affect the performance of this company. Another Russian lawmaker took a harsh approach in regards to gay propaganda suggesting publicly that Tim Cook, the Apple CEO, should be banned from entering the country because he acknowledged that he is a homosexual on 30th October 2014. These cases illustrate clearly how political factors can affect the sales of Apple within Russia. Both of these cases are related to politics and they affect Apple directly. Other political factors include government-level trade, pressure groups, tariffs and industry-specific initiatives by the government that can affect the performance of Apple or those of competitors. Additionally, the kind of relationship that USA, the mother country of Apple, has with other countries can affect its performance in relevant countries because substantial revenues share are generated outside the US.

  • Economic factors

The revenues of Apple can be affected by economic crisis and recessions to a larger extent when compared to the other businesses because of the strategy of premium pricing. For instance, the revenues of this company decreased by 16 percent in Europe during the third quarter of 2012 as compared to those of the same quarter in the previous year. Increased inflation rate also affected the company in the United States because of the large cash reserves amount. On a global scale, the company is a receiver of the currencies from other countries. This means that the exchange rates’ changes can affect the company especially strengthening of the dollar in the US can affect the net sales as well as gross margins of the company negatively.

  • Social factors

Apple is affected by social factors like consumer spending changes in places like Africa where people might be unfamiliar with some of its products. Some consumers of Apple products are young and are not attached to Apple products emotionally. There is also a backlash against the stylish and expensive products among some consumers in Europe and the United States. Additionally, there are ethical concerns in the manufacture of Apple products in China which can limit the company sales.

  • Technological factors

Some of the technological factors affecting Apple performance include competition from other technology companies like Samsung and Google. Some of these companies are duplicating its products. The growth in the use of tablets and Smartphone can lower the demand for popular computers from Apple.

  • Environmental factors

The disposal of nonworking or used electronic devices is the major environmental factor facing Apple. Concerns are also being raised about the side effects of its manufacturing plants in China which include pollution that leads to climate change.

  • Legal factors

Apple relies on several products that are under the laws that govern intellectual property. The company has also entered the financial sector that is highly regulated. This is likely to increase government oversight and regulation.

Why this PESTEL analysis for Apple is important

The outcome of this analysis is used in identifying weaknesses and threats that are used in the SWOT analysis of the company. This gives the management a detailed picture or overview of the environment where Apple operates making effective decision making and strategic planning possible.

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