1) Identify at least one factor from each of the six PESTEL factors affecting Ap
ID: 398904 • Letter: 1
Question
1) Identify at least one factor from each of the six PESTEL factors affecting Apple, and explain how each factor affects or is likely to affect Apple. For example, if you think that “lifestyle changes” of people is one of the Sociocultural factors likely to affect Apple, please explain how in detail. 2) Create a list of all other players (companies) in Apple’s strategic group, and explain why you chose to consider them a part of this strategic group. For example, you may consider Samsung to be a part of Apple’s strategic group because they both compete directly, in the same markets, and target the same type of customer segments. Support your claims using examples and evidences. 3) Explain how each of the six factors identified by you in step 1) affects or is likely to affect each of the companies in your list from step 2), and whether that is beneficial or detrimental for Apple. For example, is “lifestyle changes” a relevant Sociocultural factor for Samsung? How? Is that good news or bad news for Apple? Taken together, these three answers will provide evidence of your level of critical thinking in the areas of external analysis. There is a minimum limit of 500-words to your response. However, you don’t need to post a reply to your classmates’ posts. Your responses are due by September 16 at 11:59 PM. Your responses will be graded based on the following criteria: Logic and reasoning in arguments Supplementary evidence and supporting examples Detailed and clear explanation Insightfulness Creativity/novelty in the information provided Please make sure to support your answers with examples, evidence, and detailed, well-articulated explanation. Answers that do the "bare minimum" (e.g., one or two sentences total) or "state the obvious" (e.g. "a business must be aware of global changes because they are important for success") will not earn any points.
Explanation / Answer
PESTEL analysis of APPLE
Political factors: Apple is dependent on China for manufacturing the products. The recent increase in labor cost due to the political parties’ decision has affected badly Apple. The political pressures from countries having disputes with the USA are also affecting. Even in Europe decline in Pound prices has resulted in heavy losses.
Environmental factors: Disposing of the damaged or non-working electronic pieces in China is a big threat. It has traces of increasing global warming according to China Government reports.
Socio-cultural factors: Demographic factors along with urbanization has made India favorable for the launch of Apple brands. The craze of having Apple laptops, iPhones or iPads have increased drastically. The sales revenue in 2016 was 214.23 Billion and in 2017 it has increased to 228.57 Billion Dollars.
Technological factors: New iPhone 7 and 7 Plus has taken over the Indian market as Samsung’s Galaxy was withdrawn from the market due to technical issues. With M10 motion as the coprocessor and PowerVR GT7600 Plus graphics, BSI Sensor, and advanced technology it has received maximum 5 ratings by users.
Economic factors: Entrance of Apple in India with the low pricing strategy is due to economic conditions. There is a market for Apple in India but for entering into India’s market it requires strategies like low cost, affordable and stylish phones. The Apple iPhone SE version starts with Rs 17,997 as of September 2018 which was before Rs 40,000.
Legal factors: Apple had faced child labor claims as it has been using children to assemble iPhone 10. According to BBC News and New York Post, Amnesty has accused Apple of not adhering to zero tolerance policy where children cannot be working in dangerous conditions in China.
Competitors or strategic players of Apple are Samsung, Google, Lenovo etc.
Apple must give a tough fight to Samsung in India as Samsung has 28% of the market share and Chinese brands like Xiaomi, Vivo, Oppo have around 57% of smartphones. It is not more than 2-3% for Apple. So, it must struggle a lot to gain a competitive position.
Apple must compete in advanced technology with Google Pixel and Samsung Galaxy, iPhone X is made of stainless steel and glass whereas Google Pixel is made of Aluminium and Galaxy is made of Aluminium and glass. The display resolution of Apple iPhone is 458 ppi whereas the other two have 538 and 570 ppi respectively.
With the increase in Indian political pressure, Apple is bound to use raw materials from India and if not available in India, it can import from other countries. The Indian students and Indian employees would be employed in the first company in Bengaluru, India.
Samsung has already taken over the Indian Market, so Apple has to bring in new offers and iPhones at an affordable price as per the economy. The target should be youth along with the business person and like Samsung, it should have ventures/tie-ups with corporate houses. The advertisements should have emotional touch as Indians are sentimental.
As Apple had claims for child labor and India has the highest number of child laborers, the competitors like Samsung and Google will eye for the opportunity.
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