non economic environment of apple inc.

1. Non Economic Environment
of
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171 - 180

2. Meaning Of Business Environment
 The term ‘business environment’ connotes external forces, factors
and institution that are beyond the control of the business and they
affect the functioning of a business enterprise.
 Business environment is the sum total of all the factors external to
the business firm that greatly influence their functioning.
 The business environment are dynamic in nature, that means, it
keep on changing.

3. Elements of Non-Economic
Environment
 Political
 Economic
 Social
 Technological
 Legal
 Environmental

4. Company Introduction
 Apple Inc. is an American multinational technology company headquartered in Cupertino,
California that designs, develops, and sells consumer electronics, computer software, and
online services.
 Apple was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne in April 1976 to
develop and sell personal computers. It was incorporated as Apple Computer, Inc. in
January 1977, and sales of its computers saw significant momentum and revenue growth for
the company.
 Apple Inc. is one of the world’s most visible and recognizable consumer electronics brands.
Apple has long been an investor favorite because of its strong revenue growth and high return
on investment.
 Despite its uniqueness, Apple’s business model has been very successful. It reported revenues
of $224.34 billion on June 30, 2015. Apple also reported sales of $50.77 billion for the
second quarter of 2015 and estimated sales of $233.02 billion for the current fiscal year.

5. Impact of Political Factors on Apple
 Apple is heavily dependent on lower cost manufacturing in China. Social and
political unrest in China could disrupt manufacturing or increase manufacturing
costs in that country.
 There have been also been calls to restrict Chinese imports in the United States in
an effort to boost American manufacturing.
 The cost of finding alternatives to Chinese manufacturing could be high for
Apple. This could lead to increased prices for Apple products.
 Apple could become the target of growing nationalism and anti-Americanism in
China, which could reduce its market share.

6. Cont.…
 Apple is one of a number of American technology companies that has
accumulated a large amount of cash. It had $34.7 billion in the bank on June 30,
2015. This is generating calls for higher corporate taxation in the United States,
where income inequality has become a major political issue.
 Apple’s battle with US Federal Bureau of Investigations (FBI).

7. Impact of Economic Factors on Apple
 Increased labor costs in China could take away the cost advantage
of some Apple products.
 Stagnating middle-class incomes in some developed countries,
including the United States, could shrink the potential market for
higher-end consumer goods such as those marketed by Apple.
 A strong U.S. dollar could increase exchange rates, making it more
expensive for Apple to do business in key markets like Europe and
China.

8. Impact of Social Factors on Apple
 The biggest growth in consumer spending in coming decades will
be in areas of the world such as Africa where people are unfamiliar
with Apple products.
 Consumers in those markets and younger people in Apple’s
established markets, such as the United States, lack the strong
emotional attachment to Apple products that drive sales.
 Apple’s close association with China could offend some potential
customers in other regions, such as North America and Europe,
particularly if tensions with China rise

9. Cont...
 Apple’s music marketing strategy has created resentment and led to
public criticism from major recording stars that could tarnish the
brand’s image.
 There is a backlash against expensive and stylish products among
some customers in the United States and Europe.

10. Impact of Technological Factors on
Apple
 Competitors such as Google and Samsung have
demonstrated a strong ability to duplicate Apple’s products
and services.
 It took less than a year for Google to roll out a payment
app; Android Pay, with the same capabilities as Apple Pay.
This means that many of Apple’s signature services and
products are no longer unique
 The number of new consumer products Apple can bring out
is limited. Many of its new offerings, such as Apple TV,
will have a limited market.

11. Cont.…
 Growing use of smartphones and tablets will lower demand for Apple’s popular personal
computers.
 Apple’s proprietary operating system can limit the variety of applications available to
smartphone users.
 The growing capabilities of cyber criminals make Apple’s systems less secure and take
away one of its strongest competitive advantages: its reputation for high levels of security
and safety

12. Impact of Legal Factors on Apple
 Apple has recently entered the highly regulated financial services sector via Apple Pay.
This could increase the level of regulation and government oversight it faces.
 News reports indicate that Apple is planning to enter another highly-regulated sector:
automobile manufacturing.[3] Entering the auto business could increase regulatory,
insurance and litigation costs at Apple.
 Apple depends on a variety of products covered by intellectual property laws, such as
software and music, for much of its income. This leaves the company highly vulnerable to
both piracy and litigation.

13. Cont.…
 Qualcomm filed a complaint with the US International Trade Commission (ITC) that
Apple has engaged in the unlawful importation and sale of iPhones that infringe one or
more claims of six Qualcomm patents covering key technologies that enable important
features and functions in iPhones

14. Impact of Environmental Factors on
Apple
 The biggest environmental issue facing Apple is the disposal of used or nonworking
electronic devices. The expense of disposing of devices, particularly those containing
lithium batteries, could be high.
 Pollution and other environmental side effects from manufacturing facilities in China are a
growing concern. This could lead to increased regulation and higher manufacturing costs
at some point in the future.
 China’s efforts to cut greenhouse gases and limit fossil fuel use could increase electricity
rates and manufacturing costs for Apple in that country.

15. Cont.…
 Climate change created by global warming could disrupt transoceanic shipping and
Apple’s supply chain.
 Concern about energy use and other side effects from data centers could lead to increased
regulation and costs.
 Apple is highly vulnerable to increases in electricity costs because of its dependence on
data centers and other Internet infrastructure.