PESTEL Analysis Overview
PESTEL analysis is a strategic tool used to examine the different factors within a macro environment likely to have some type of an impact on a business enterprise.
In business school, such an assignments usually focus on industry leaders. Common case studies could therefore include PESTEL analysis for Apple, PESTEL analysis for Amazon, and PESTEL analysis for Coca Cola.
Apple Company Profile
Conducting a PESTEL analysis for Apple requires a good understanding of the company.
Per se, Apple Inc. is a company that deals with the designing, manufacturing, and marketing of smartphone devices, personal computers, tablets, and portable music players.
It also deals with the manufacturing and sale of numerous related services, software, networking solutions, accessories, and third-party applications and content.
Apple Company profile can be summarized as below.
APPLE INC. PROFILE
|Company name||Apple Inc.|
|Founder||Steve Jobs and Steve Wozniak|
|Products||iPhones, Macs, iPads, and iPods|
|Geographical reach||Americas, Europe, and Asia|
PESTEL Analysis for Apple
The PESTEL analysis would entail a close examination of the different external environmental factors affecting Apple Inc.
This analysis is usually important in identifying the different opportunities and threats facing the company.
That said, business factors to be included in an Apple macro environment analysis case study or a PESTLE analysis of Apple essay are as discussed below.
Political factors are quite critical in the analysis of Apple Inc.’s external macro environment. This is because all businesses operate within an environment defined by the government of the day.
For that reason, some of the factors to consider in the case of Apple macro environment analysis case study include:
1. Political stability in developed countries
2. Trade policies
3. Government policies
4. Trade disputes
Political stability in developed countries presents Apple Inc. with business opportunities. This is particularly the case in the Americas, Europe, and some parts of Asia.
Such stability can be considered as one of the external environmental factors affecting Apple Inc.’s operations in a positive manner.
This is because political stability minimizes the negative business impacts associated with political instability risks such as civil unrest, sanctions, and embargoes.
As well, trade policies are an important political factor to consider in the PESTEL analysis for Apple. These policies encompass agreements and regulations controlling exports and imports within a country.
A good PESTEL analysis should therefore look into the nature of trade policies in Apple Inc.’s existing and potential markets with the intention of identifying prospective opportunities.
Government policies are also key external environmental factors affecting Apple Inc. They include the different regulations and measures put in place by the government that affect the company’s operations.
In the case of Apple Inc., the US government has in the past contemplated developing policies against accumulation of huge sums of cash, assets, and wealth.
Note that large cash amounts in the bank have over the years become a prominent part of Apple company profile identity.
In addition, trade disputes are a major factors to examine in an Apple macro environment analysis case study.
This is particularly in the case of China, which is a major market for Apple Inc. products.
It is important to note that the rising trade disputes between the US and China arising from espionage allegations and accusations on COVID 19 pandemic have serious implications on Apple Inc.’s operations in China.
Economic factors as well feature significantly in the PESTEL analysis for Apple. Some of the key economic factors to examine include:
1. Economic stability
2. Economic growth
3. Disposable income
4. Cost of production
Economic stability entails factors like GDP over a period, unemployment rates, and inflation levels. Accordingly, a PESTLE analysis of Apple essay would examine such factors from a global market perspective.
These factors have serious implications on Apple Inc.’s operations since they influence the company’s ability to offer products at stable prices as well as achieve stable and sustainable growth.
For economic growth, you need to analyze the short-term and long-term impacts of emerging economies like China and other economic tigers on Apple Inc.’s market growth and share.
A good Apple macro environment analysis case study should as such evaluate how these economies present the company with an opportunity for growth.
Disposable income is also an intricate factor to consider in the PESTEL analysis for Apple. This factor is closely related to economic growth mainly in the emerging economies.
In this, you should explore how the rise in household and individual incomes is likely to impact Apple Inc.’s operations.
This should be in consideration of the company’s premium priced products.
Additionally, cost of production has to be deliberated as one of the external environmental factors affecting Apple Inc.
This is more so with the cost of labor as it is a major factor in the production of Apple Inc.’s line of products.
Note that the cost of labor in Apple’s key regions of production such as China has been on a constant rise over the past several years.
Social factors are equally central to the PESTEL analysis for Apple. Key social factors affecting Apple Inc. include:
1. Digital trend
2. Overreliance on the digital world
3. Ethical concerns
4. User perceptions
The prevalence of the digital adoption trend mostly among the younger generation across the globe is one of the major external environmental factors affecting Apple Inc.
Analysis of the digital trend requires you to examine how the emergence of smartphones as social and status gadgets effects Apple Inc. market operations.
This trend could be an opportunity for the company.
Closely related to prevalence of the digital trend, overreliance on the digital world for the execution of day-to-day business is a critical factor in PESTEL analysis for Apple.
This factor should look at the extensive use of smartphones in activities like learning, workplace tasks execution, and personal entertainment and their influence on Apple’s market decisions.
This factor could provide the company with an opportunity for growth.
On the other hand, ethical concerns as a PESTEL analysis factor could entail the different social issues arising from Apple’s operations in China, including human rights violations and cheap labor.
You could therefore explore the impact of Apple Inc.’s manufacturing operations on the social appeal of its products among potential customers.
Also, the general perceptions about the company are an important social factor to consider in the PESTEL analysis for Apple.
This could be approached from the dimension of increasing tensions between the company and other players in the industry.
Such tensions could be in the form of legal disputes that can be interpreted to be a result of uncompetitive practices by Apple Inc.
Technological factors also feature prominently in the PESTEL analysis for Apple. These factors include:
1. Integration of technology in business
2. Cloud computing demands
3. Technological limitations
4. Capabilities of competitors
Integration of technology in almost all business operations is a major factor to explore in your PESTLE analysis of Apple essay.
This would require you to evaluate how the adoption of technology in business processes like networking, inventory control, accounting, and communication impacts Apple Inc.’s operations.
The integration is likely to be an opportunity for the company.
Similarly, you should look into rising cloud computing demands as a critical factor in the PESTEL analysis for Apple.
This analysis would examine the impact of rising need for cloud services like network storage, application hosting, and virtual IT on Apple Inc.’s operations.
The rising demand is also an opportunity for the company.
Further, you can study technological limitations as external environmental factors affecting Apple Inc.’s operations in different ways.
This would entail examining the impact of the company’s operating system used by its smartphones. The iOS usually bars the installation of some application in iPhone.
Such limitations could be considered as some of the weaknesses of Apple.
Also, the ability of Apple Inc.’s competitors to rapidly come up with programs, systems, and applications that match its own is a key factor to consider the analysis of the company.
This includes all apps in the App Store and other innovations like mobile payments.
Your PESTEL analysis for Apple also has to include the different environmental factors that have an impact on the company.
Some of such factors include:
1. Disposal of electronic waste
2. Environmental pollution
3. Energy conservation
Disposal of electronic waste is an important factor to include in an Apple macro environment analysis case study.
This is because the company is associated with huge volumes of e-waste from its disposed gadgets.
In this analysis, you should evaluate the impact of renewed CSR campaigns agitating for proper waste management on Apple Inc.
Environmental pollution is another environmental factor to consider in the Apple’s PESTEL analysis. Although it is closely related to e-waste management, it focuses on the manufacturing stage.
Usually, you should look at how environmental management policies in different countries affect the company’s operations.
This could focus on huge manufacturing plants in countries like China.
As well, a PESTEL analysis for Apple should study the impacts of energy conservation drives on the company.
As an environmental factor, energy conservation raises numerous issues like adoption of energy efficient systems such as solar run plants, use of natural lighting, and energy-conscious procurement processes.
Lastly, the PESTEL analysis for Apple has to examine the various legal factors likely to affect the company.
Some of these factors include:
1. Legal battles
2. Third-party products legal liability
3. Data privacy regulations
Apple Inc. have had numerous legal battles with different entities where in some cases the company has incurred significant costs.
Accordingly, you could explore the impacts of the serious legal battles the company has had with the US government and competitors like Samsung, Qualcomm, and Shanghai Zhizhen Network Technology Co.
Close to the legal battles, a PESTEL analysis for Apple should look at the legal liability the company bears from third-party applications.
This includes legal cases like the iTunes gift card scheme or the Apple Inc. v. Pepper et al. case that focused on Apple’s app store conduct.
As well, data privacy regulations is another legal factor examine in your PESTLE analysis of Apple essay.
This may look at the regulatory compliance requirements imposed on Apple Inc. and other technological companies concerning data management.