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Contemporary Business Environment of Apple

University: LSC London

  • Unit No: N/A
  • Level: High school
  • Pages: 13 / Words 3218
  • Paper Type: Assignment
  • Course Code:

    N/A

  • Downloads: 520
Organization Selected : Apple Iphone
Question :

In this report, students are required to answer some questions for completing the task.

  • Illustrate an analysis of the key factors of the internal environment and the interaction with the external surrounding.
  • Determine how a market economy functions and the role of authority within it.
  • Explain the economic surroundings within which business operates in the UK.
  • Analyse why nations advantages from trade with each other.
Answer :

INTRODUCTION

Business environment is the integration of different factors which help the business to grow and increase its effectiveness. The business environment help to understand the behavior of the market customers, demand and supply of the market and all the related businesses which hep the business increase its productivity. There are some factors which are external in the business environment and the business have no control over I so that business have to analyze these factors in order to formulate the effective strategic planning. There are internal factors which the business have to assess as the business have the partial control over it and it can be changed to grow the business and achieve the objectives of the business to increase the profit margins. Samsung have also analyzed the business environment which help the company to increase the sales and also increase the market customers by providing satisfaction. Apple is an electronic giant in the world and is dealing in many home electronics. The company also innovated many mobile phones which helped to increase the sales. The company was established 1976 in USA, California and have an annual revenue of around 260 billion Dollars. In this report there is a brief study about the macro and micro environment analysis so that the company can determine the challenges and issues faced and what methods will help them to solve the problems. 

INTERNAL AUDIT

Supply and Demand

As apple company is multinational company which produces different types of electronic products it is very essential for the company to analyze the market demand and supply to understand the behavior of the market and formulate the suitable strategies which will help the company to increase the sales. (Shelton and Shopley, 2017)

Apple company is determined that according to the law of demand and supply is the demand of the products should be equal to the supply which will create tan equilibrium and hence giving the company the maximum output in the revenue generation. Demand is the need and the desire of the customers in which they are willing to the buy the product on the given price so that they can satisfy their needs. The company have to determine the different In which they can increase the demand of their mobile phone product. The company have to make the customers understand all the features and technology which the phone has and also educate their customers about the importance of new technology in their life style.(Sangari and Razmi, 2015) The marketing of the new mobile phones with the attractive depiction will also increase the demand of the company's mobile phone. Due to the high competition in the mobile phones in the world the company have to innovate their products so that they can achieve the competitive advantage. The demand of the company will also help to increase the information base so that they can improve the product according to the need of the customers so that they can be satisfied.

The law of supply states that increase in demand will result in the increase in the price if the supply is at the constant. But the company have successfully changes the law for their own good. Apple has the high priced products even though the demand id high and demand of the product is high this only happened due to the quality of product and the brand image for which the customers are willing to pay extra to satisfy their self actualization needs in the society. In many societies owning an Apple Phone is considered to be rich and also wealthy the company is using this reason to increase the sales of the company. Apple also have to focus on the supply of the products by improving the distribution channel and also opening online stores so that the customers can directly purchase from the company.(Rostamkalaei and Freel, 2017) The company have to increase the production pf their product to meet the demand. 

Elasticity of Demand and Supply

Elasticity of demand states that a change of the price of the phone will affect the demand of the mobile phone. The change in the demand will be analyzed in the form of Percent change and also the change will be associated with the quantity demanded by the customers. The elasticity of demand vary on many factors which are price of the product, price of the substitutes, customers, behavior, income level of customer. For example the price of I phone 7 drops which increases the demand. The price of I phone 11 in higher which will increases the demand of the older I phone and increases the profit of the company. The demand can also be effected by the governmental policies and economic factors of the market. (Liu and et.al., 2016)

Elasticity of Supply states that the demand of the products and price of the product have the direct relation with the supply of the products. The supply of the products will vary in the different market due the geographical locations and the type of strategy adopted to increase the market demand of the company. Apple also have analyzed the market demand so that they can establish a production house near the market which can meet to demand and also lower the cost of the company.

Oligopoly

Oligopoly is the market structure in which the there are certain big players which lead the market and are also capable to change the prices of the market according to their will. In the oligopoly due to limited number of players all the marketing strategies affect one another and also the sales of the competitors. Apple have to make the effective strategies to lead in the market and make the effective price policies which help the company to attract the maximum number of customers. The increase in the innovation in the technology of the mobile phones will also help to increase the competition in the market so that Apple company can achieve the competitive advantage in the market. The company have to analyses all the legal, economical, technological factors which will help to increase the efficiency of the company increase the customer base. Apple can also form an alliance of all the market leaders In the same market so that they lower the competition and find some alternative solution in which every company can get the equal proportionate in the profit generation. The Cartel discourages the company to follow the rules and also forces them to illegally increases the market share by breaking the rules of the alliance this will also disrupt with the balance in the market and will create a cut-throat competition in the market. (Ifinedo, Pyke and Anwar, 2018) 

Key Diagrams

Price elasticity is the criteria which is very important in economics to analyze the market demand and supply of the product according the given price to the customers so that they can increase their satisfaction according to their needs and desires. Apple need to evaluate the price elasticity due to high competition in the mobile phone sectors and increase in the technology which can make the technology obsolete very fast and also decrease the efficiency of the products. The company have also analyzed that the change in the price also changes the quality demanded of the product which help the company to sell their products more easily and flexible manner.(Um, 2017)

Income Elasticity

Income elasticity states that the services of the company and quality of the products re directly related to the income level of the customers. If the customers have the high income level then he will shift for the high quality products and services and if they have low level of income the customers will opt for poor quality of products and services(Hunter, Saunders and Constance, 2016) . Apple have to analyze the income level of the customer in the market so that they can increase the sales of the company as the company have only focused on the high and upper middle social class of the society which gave them a better sales and created the goodwill of the company. To maintain that goodwill the company also need to invest in the market which is Growing and also having a potential.

Cross Elasticity

The cross elasticity of demand of good and services is analyzed by the change in the price of the substitute goods and the complementary goods. For example The prices of the mobile phone of the competitive company is increased which will impact the market provide and also increase the demand of the mobile phones of Apple company and provide a better sales to the company(Hong and et.al., 2016) . The substitutes products are those goods and services which have the similar features In the same price range which can vary the level of satisfaction. Apple have to analyze all the substitute products in the market to increase the percentage of customers switching to apple due to changes in the substitute products. The complementary products are the goods and services in the market which can't be used without one another. For example the mobile phone with the battery will be useless and it will not satisfy the customers.

Productivity and Strategies of Apple IPhone

Apple have analyzed the market strategies which will help the company to increase the efficiency of the company and move the sales towards the expected goals and achieve the set objectives of the company. The company have to analyze all the internal factors which can help the company to make an effective strategies and promote I phone productions respectively. Apple have to adopt some effective models and methods through which the customers can be satisfied and increase the sales of the company. (Holotiuk and Beimborn, 2017)

The company have used the generic and intensive growth strategy which helped Apple to provide the better services. These strategies are directly related to the pricing and marketing strategy of the company and which help to attract the maximum customers for the products. The company have also provided the unique service which no other company have provided that is the company will replace their phone if the phone have accidental damage or any reason in the limited period. This helped the company to increase the customer relation and customer loyalty.The productivity of the company is measured by the satisfaction of the customers and the quality the company is proving to the customers.

The generic strategy help the company to achieve the competitive edge in the competitive market as Apple is the market leader in the mobile phones in the world and provides its services without any flaw to the customers. Apple also have the high productivity due to the innovation and product differentiation from the customers as the market competitors provide the android mobiles but Apple have developed its own operation system which is very user-friendly and also help the customer to protect its data from the unknown user(Holden, 2016). The company is also known for its high security data policies which help the customers to provide the premium facilities which only apple User have which make them Unique. This is the reason Apple is able to sell its product in the high price with the high demand and average supply of its mobile phones. 

PESTLE Analysis of Apple 

Political factors

Apple have to analyze this factor as it s very important to understand the political situation of the country and make the effective strategy which will support the company to attract more customers. (Hachicha and et.al., 2016) The company also have to analyze ht taxation policy properly before investing in the new market. The company is also dependent on china as the production of Phones is done in china and that can also impact if the china changes the policies and government.

Economical Factors

Apple have to analyze economic factors so that they can increase the profits and decrease the cost of production of the company. The cost of production in china is cheap but if the rates increases it will impact the prices of the product and also decrease the efficiency of the company. The company also have to analyze the inflation rates, foreign exchange rates, the economic policies of the government which can help the company to increase the productivity in the country. (Green and et.al., 2017)

Social Factors

The company have to analyze the customers as they are the main factor in the growth of the company and also it helps to provide the profit to the company. The company have to determine the attitude, lifestyles, standard of living, behavior patterns, cultures, beliefs of the customers to attract them by making the effective strategies and increasing the efficiency of the products according to the needs of the customers. The income level of the customers will also help tho target the accurate segment of customers to sell the products.(Geissdoerfer, Vladimirova and Evans, 2018)

Technological Factors

The company have to huge competition in the technology as the competitors are changing their technology constantly according to the market trends. The company also have top innovate to increase the efficiency of the products and also provide the best technology so that the customers are satisfied and also promote the company to their friends and family.

Legal Factors

Apple pay have been recently launched by the company which enables the customers to transfer their money at the click a button. Company have to analyze the legal factors which can impact the growth of the new application. As it can also lead to the fraud and the money can be robbed with the help of hacking. The company have to analyze all the legal policies of the government so that they can be in the ethical code of conduct.

Environmental Factors

Apple is also responsible to increase the awareness about the environmental problems and issues which is impacting the health of the population of the world.(Ershova, 2017) The company also have to analyze the ways through which they can socially help the people and provide them better facilities which will indirectly help the company. As there will be more educated people who can increase the sales of the company and also help the country to increase the economy employing themselves.

EXTERNAL AUDIT

SWOT Analysis 

Strengths

The company have the high goodwill of their products as the company provide the best quality phones and also have the best accessibility of technology in the market. Which help the company to make the best services and product. The company also have high profit margins due to the high pricing of the products and the willingness of the customers to pay the prices. The company also invest in the innovation of the products and services to provide the better services and products.(Chungyalpa and Bora, 2015) The company also have the increased relation with the company which also help to collect the data from their customers to upgrade the product.

Weaknesses

There are many weaknesses which Apple have to analyze in order to increase the efficiency n the Market and also increase the profit margins. The company also have the less target market which decreases the opportunity to increase the sale as the company only focus on the high and upper middle social class of the society. The company also have the limitation in the operating system as it can not operate all the applications which the competitors products can. Which also discourages the customers and make them switch the company. Due to the high Prices the customers do not feel worthy to spend on I phone which is very typical to use and also have less connectivity with other operating system phones. (Besley, 2015)

Opportunities

Apple has to constantly determine all the external opportunities before any other competitors to create the competitive advantage in the market and increase the efficiency of the company(Andersson, Forsgren and Holm, 2015). The company also have to increase the distribution channel and increase the production capacity of the products by establishing the production houses other than china. As it also increases the transportation cost and increases the risk of damages in the transportation. The company also have to develop new products which will increase the customers base and provide the better sales to the customers. Apple is very popular in the world due to its unique vision and technology the company have to establish new markets where the technology have not reached.

Threats

The company have many issues and problems in the Market, and they have to analyses all the threats in order to make effective strategies to overcome all the threats and increase the efficiency of the company. (Ambler, Witzel and Xi, 2016) The company have high competition which can decrease the market share and also decrease the sales. Due to popularity of the products of Apple there is a high chance of duplicate and that will also lower the sales and also impact the brand image with the low quality duplicates. The company can also impact the profits if the labor cost of country increases and this will increases the cost of production of the company.

Limitations of Microanalysis

  • As every market researcher have their own way to analyze the factors this can impact in the results of the research and the output of the strategies developed from the research.
  • The researcher will only focus on the micro aspects of the company and will forget about the macro factors which can also interrelate with micro factors which can decrease the efficiency of the analysis of the market making it inefficient. (Akhmetshin and et.al., 2018)
  • Some analysis in the micro level are based on the assumptions which can also lead to the wrong result and also decrease the efficiency to achieve the objectives and make the company loose the company.
  • It only focuses on the end user analysis and the behavioral patterns of the customers which can create contradictory theories after the integration. (Aithal, 2016)

CONCLUSION

This report had a brief information about the micro and macro factors of Apple Company which is dealing in the electronics all over the world. As Apple id multinational it also has to analyze various external and internal factors to increase the efficiency of the company and it would also help the company to increase the customer base and profit margins by adopting the effective models and methods which could help to achieve the competitive advantage in the market. 

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