Preliminary research on Apple Company
Phase 2 Research Strategic Plan Project Preparation Work –
You should now have selected the company for your strategic plan, either, Ford Motor Company, Apple
or iRobot. Continue your preliminary research on the company by beginning to analyze the external
forces that affect the organization: economic, social, cultural, demographic, environmental, political,
governmental, legal, technological and competitive. Use the tools for external audit and benchmarking on
the company in your strategic plan. � Due in Week 3
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Phase 2: Research Strategic Plan on Apple Company
An analysis of Apple Company’s Inc. can be facilitated by the use of a PESTEL analysis.
This term is an abbreviation for Political, Economic, Social, Technological, Ethical and Legal
factors. It describes a strategic framework which can be used by a company to analyze its macro-
environmental factors by scanning the environment. This analysis will be helpful in
understanding market growth factors and thus contribute towards formulating a viable research
strategic plan.
Political factors determine the degree of government intervention in the growth and
development of the economy. The government through its policies and regulations have
impacted on decisions made by the management at Apple. For instance, since 2005, the company
has expanded its market segments outside the United States thus selling most of its products
outside the USA. The countries that account for most of its sales include China, Ireland, Czech
Republic and Korea. The global market place is diverse with developing and developed
countries. These governments impact on the sales volume of products through taxation, tariffs
and quotas so as to achieve a Balance of Payment (BOP) (David, 2007). In the event that Apple
disregards these international rules and those set by the US government, then it will have a hard
time marketing its products.
Economic factors have impacted on the decision making process at Apple Inc. This is
because global factors such as economic growth, inflation rate, exchange rates and interest rates
impact how a business operates. Economic situations such as recession and bloom could impact
on the sales made on Apple as a company. The products produced by Apple are mostly viewed
as luxuries thus an increase inflation could result into low sales volumes. This is because of the
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increase in unemployment rates which will reduce disposable income thus lowering the buyer’s
propensity to purchase. Economic factors can affect Apple either negatively or positively.
Social-cultural factors describe the living patterns and values of the global consumers of
Apple electronic products and services. Social factors impact on customer preferences, income
groups, and perception and life priorities towards purchasing Apple products. Whereas other
social factors such as fashion, social class and peer pressure could drive people into purchasing
Apple products, the same forces could make people value other products instead of Apple’s
(David, 2007). The company has managed to associate itself with quality, reliability and
innovation. The consumers are also aware that Apple Inc. is an expensive brand. Social factors
are synonymous with cultural aspects such as population growth rate, age, demographics and
distribution of people. These factors collectively impact the company’s positioning of its
products and creation of niches.
Technological factors are determined by the ability of Apple to manufacture and design
highly innovative and differentiated products through research and development. So far, Apple
Inc. has managed to win over more customers because of its unique products. The IT industry is
competitive based on the ability for a firm to be innovative in creating appeal through
appearance and product features (David, 2007). Ethical factors are related to the ability for the
company to ensure that its products are original, safe, secure and not counterfeited. Ethics has
helped in protecting innovations made by Apple thus reducing chances of imitation by other
companies. Legal factors describe the global laws governing the manufacture of electronic
products by companies such as Apple Inc. The company has benefited from laws allowing for
sub-contracting of countries with cheap labor such as Korea, and China. As a result, the company
has managed to create a competitive advantage due to its low costs of production.
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Reference
David, E. H. (2007). Strategic Management: From Theory to Implementation. New York:
Routledge.
