Apple Inc. PESTEL/PESTLE Analysis & Recommendations

Apple PESTEL PESTLE analysis, political economic social sociocultural technological ecological environmental legal external factors case study
Apple’s iPhone, one of the company’s bestselling products. Apple’s PESTEL/PESTLE analysis indicates that most of the external factors in the company’s remote or macro-environment present opportunities for the business. (Photo: Public Domain)

Apple’s high performance is linked to the company’s effectiveness in addressing external factors in its remote or macro-environment. The firm’s success is a result of various strategies created to exploit opportunities and protect the business from threats. This PESTEL/PESTLE analysis identifies the most significant external factors that Apple must include in addressing its remote or macro-environment. These factors present opportunities or threats that impact the business. While Apple is already in a leadership position in the industry, this PESTEL/PESTLE analysis shows that the company must continue evolving to keep its leadership position. Effectiveness in addressing these external factors ensures that Apple remains strong despite tough competition in the global market.

The external factors in Apple’s remote or macro-environment indicate the value of various strategic options for the company. This PESTEL/PESTLE analysis is a guide for Apple in is strategic formulation process.

Political Factors Affecting Apple’s Business

The most significant political external factors in Apple’s remote/macro-environment present opportunities. This aspect of the PESTEL/PESTLE analysis model indicates the influence of organizations, such as the government, on business. In Apple’s case, the following are the most important political external factors:

  1. Improving free trade policies (opportunity)
  2. Stable politics in developed countries (opportunity)

More free trade policies are created over time, especially with developing countries. Additional free trade policies increase the opportunities for Apple to distribute more of its products to various markets around the world. On the other hand, the stability of the political landscape in many developed countries presents opportunities because Apple can expect minimal political issues affecting its business. Based on this part of the PESTEL/PESTLE analysis model, Apple can improve its performance by taking advantage of these political opportunities in its remote/macro-environment.

Economic Factors Important to Apple

Most of the economic external factors in Apple’s remote or macro-environment create opportunities. This aspect of the PESTEL/PESTLE analysis model indicates market and industry conditions that impact firms. In Apple’s case, the following economic external factors are the most significant:

  1. Rapid growth of developing countries (opportunity)
  2. Stable economies of developed countries (opportunity)

The economic stability of most developed countries creates opportunities for companies like Apple to expand their businesses. However, the rapid growth of developing countries is more significant. For instance, the high economic growth rates of Asian countries are major opportunities for Apple to increase revenues through sales in these foreign markets. Based on this part of the PESTEL/PESTLE analysis model, Apple must ensure that it effectively exploits these economic opportunities. Speed and effectiveness are important because competitors are also targeting these high-growth economies.

Social/Sociocultural Factors Influencing Apple’s Business Environment

Apple’s business is subject to the effects of social or sociocultural factors. This aspect of the PESTEL/PESTLE analysis model points to the social influences on consumer behaviors and expectations. In Apple’s case, the following social or sociocultural external factors are the most significant in the firm’s remote/macro-environment:

  1. Rising use of mobile access (opportunity)
  2. Rising use of social media (opportunity)

The main social/sociocultural factors identified in this section present opportunities for Apple. The trend of the increasing popularity of mobile access is an opportunity for Apple to continue providing easy-to-use mobile devices. The firm has already taken steps to exploit this opportunity, such as through the iPhone, iPad, and Apple Watch. The rising use of social media is also an opportunity because it increases demand for digital devices like Apple products. Based on this part of the PESTEL/PESTLE analysis model, Apple has major opportunities in the social/sociocultural dimension of its business environment.

Technological Factors in Apple’s Business

The technological external factors in Apple’s remote/macro-environment generally provide opportunities for the company. In this aspect of the PESTEL/PESTLE analysis model, current technologies and technological changes affect business conditions. In Apple’s case, the following technological external factors are the most significant:

  1. Cloud computing trend (opportunity)
  2. Technological integration (opportunity)
  3. Growing apps market (opportunity)

Cloud computing is becoming popular among individuals and organizations. Apple can exploit this opportunity by offering cloud-friendly devices and apps. On the other hand, technological integration of devices is a major trend. Apple can take advantage of this opportunity by continuing its strategy of providing products that can be seamlessly connected to each other. In addition, the apps market is growing. Apple has the opportunity to grow its App Store. Based on this part of the PESTEL/PESTLE analysis model, Apple is in a positive position to exploit such major opportunities in the technological dimension of its business environment.

Ecological/Environmental Factors

Most of the ecological/environmental factors in Apple’s remote/macro-environment provide opportunities. This aspect of the PESTEL/PESTLE analysis model highlights ecological concerns and their impacts on business. In Apple’s case, the following ecological/environmental external factors are the most important:

  1. Business sustainability trend (opportunity)
  2. Product energy efficiency trend (opportunity)
  3. Labor rights trend (opportunity)

Apple is already addressing the opportunity to maintain business sustainability through recycling and related programs. In addition, the company continually seeks for new technological solutions to improve the energy efficiency of Apple products, such as through improved batteries, processors, and components that emit less heat. On the other hand, the labor rights trend is impacting the global business arena. Apple has already taken steps to address the opportunity to improve customer perception about its products by improving employment practices throughout its supply chain. Based on this part of the PESTEL/PESTLE analysis model, Apple is already on the right track in addressing the opportunities based on ecological/environmental factors in its remote/macro-environment.

Legal Factors that Limit Apple

The legal external factors in Apple’s remote/macro-environment create threats to the business. This aspect of the PESTEL/PESTLE analysis model indicates the impact of laws or regulations on business. In Apple’s case, the following are the most significant legal external factors:

  1. Increasing privacy regulations (opportunity & threat)
  2. Increasing telecommunications regulations (threat)

Governments are realizing the privacy issues connected to digital technology use. As a result, more privacy regulations are imposed on businesses like Apple. This factor is a threat because it creates new challenges for Apple in developing products that involve transmission of private information. However, this factor is also an opportunity for the company to improve product features that protect privacy. On the other hand, governments are also imposing stricter telecommunications regulations, which are a threat because they could potentially limit the usability of Apple products. Based on this part of the PESTEL/PESTLE analysis model, Apple must emphasize privacy protection and regulatory compliance in all of its products to maintain the company’s leadership in various markets worldwide.

Recommendations based on Apple’s PESTEL/PESTLE Analysis

This PESTEL/PESTLE analysis shows that the majority of external factors in Apple’s remote/macro-environment provide opportunities. Given the company’s current leadership in the industry, Apple is positioned to exploit these opportunities. However, the firm must develop suitable strategies to effectively address the threats identified in the legal dimension of its remote/macro-environment. Based on this PESTEL/PESTLE analysis, it is expected that Apple will remain in its leadership position for at least five years into the future.

References
Tags:


COPYRIGHT NOTICE:
This article may not be reproduced, distributed, or mirrored without written permission from Panmore Institute and its author/s. Copyright by Panmore Institute - All rights reserved. Small parts of this article may be quoted or paraphrased for research purposes, as long as the article is properly cited and referenced together with its URL/link.