Pestel: Inflation and Apple Political Factors

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PESTEL analysis
The forces in the external environment affect the way a business operates and the choices it makes to improve its performance. PESTEL Analysis for Apple

Political factors
• It is reported that in 2007 52% of sales were from countries outside America. Bad international relations might influence apple in a negative manner.
• Apple produces its products outside America such as in China, political conflicts between America and such a country could lead to serious problems for Apple. Despite these difficult confrontations apple has been successful to continue their offshore business to date as a result of their professional management system. Economic Factors
• Due to economic downturns, unemployment increases which leads to lower consumption of goods such as Apple’s products. This is one of the reasons why Apple had to manufacture their products off shore in order to maintain the product cost competitive.
• High inflation rates make apples products more expensive, even though the income of consumers remains the same. This is the primary reason why Apple could not surpass their annual turnover in the last few years.

Social Factors
• Possessing devices such as the iPhone and iPads are now considered as status symbols in many societies, this has increased the sales of Apple.
• The growth of the music industry has benefited apple greatly as iTunes is the main virtual music store. This achievement is undoubtedly the Apple’s endeavor to improve their technology and research. Technological factors
• Apple invests largely on research and development which has led to apple being one of the most innovative companies.
• Technology has been changing rapidly, apple needs to spend more on R&D and come up with better products if it wants to keep up with competitors. Apple spends substantial amount on their researches and operational cost in order to deliver the most recent technologies

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