Apple Inc is leading software and hard ware company that was founded in 1976 with over 170 retail stores all over the world. It ventures in design, manufacture and selling of wide range of products from operating systems, personal computers, network provisions and distribution of digital entertainment products through their use of I-tunes services. The company is focused towards bringing good and efficient personal computers, portable digital music, mobile communication and video experience to its customers.
The company has ability to come up with new design and develop its own innovative system to satisfy the needs of consumers. To add on that, with the high demand of personal computers, mobile communication device and other digital consumer electronics, the company is creating and refining production like iPod, iPhone, iPad and iTunes. These products are made available to the consumers at affordable prices (Hills, 1994 p 110-112).
The company is dedicated to production of high products since it believes in high quality buying experience with persons who has knowledge on the value of products they are buying. There services offer them potential to attract and retain consumers. The company has influenced market because it sells its products to third party products directly in major markets in U.S, Canada, Europe, Asia, Africa, Middle East and South America through its established retail and online store.
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The AAPL Company has invested heavily in programs in order to promote reseller sales comprising apple sales consultant program that puts employees of Apple Inc at its various selected third party reseller locations and other programs that enhance business platform of the company and gives out high level of customer services and products expertise. Direct provision of products to consumer is the principle behind the company's success because this method provides direct contact with consumer thus giving the company advantage of the products it produces over its rivals like Nokia, Microsoft and AT&T.
The company has established strong customer base to which it sells its products ranging from individual, creative professional, educational institutions to mid level and small business. To add on that, apple Inc different products of this company are sold to customers through their own established online store and third party vendors globally. The hard ware products that Apple Inc. produce includes; iPod, iPod, and Macintosh personal computers. While the software includes the Mac OS X operating system, the iLife creativity for multimedia, iWork of software productivity, mobile operating system, logic studio, Aperture professional photography package and final cut studio for film industry.
Economic environment implies all the factors both internal and external involved in operation of a business. These economic factors will include; income, employment inflation, interest rates and wealth that have an influence on buying behaviors of consumers and the firms.
The economic environment was challenging to the apple company but the company managed to cope up with the challenges in that one of its products Mac managed to survive in the market after receiving competition from other products in from other companies. Any business that needs to be successful must access the economic environment by forecasting the national income, by scrutinizing the economic factors that reveals predictable patterns and trends and how they influence one another. For instance, payment position of the company and the prices (inflation and deflation).
Apple Inc managers are in the field in order to understand the foreign economic environment and markets that can help predict the trends and events in those environments that may affect the performance of their products in foreign countries. It is healthy for mangers and top managers of a company to understand the changes in environment which influence the decisions they take. For instance, when apple came up with the 2010 iPad it performed differently on markets both at home and international, it kept on rising and falling because of its high price. The managers understood the up and down changes and how it could have been possible for them to import component from a particular country.
The company is focusing on recovery economy. The economy in the United States and Europe has improved thus there are hopes of full recovery looming although the outlook is not certain. The uncertainty in the markets will always leave the consumers weary of hike in price or big ticket purchase like mobile communication devices and computers.
The pricing position of Apple Inc has left the company to disadvantage because of less expensive competing products on market. When the consumers feel that the economy is on the verge of improvement, the spending will increase thus Apple products will be well positioned. Consumers have a tendency of seeking to treat themselves following the economic improvement may be attracted to Apple premium portables by seeing them as modern and luxurious and for its quality, excellent customer service and dependable machine. This may be seen as presenting the best value of products than its competitors with fewer prices.
On the same note, the demographic environment of Apple Inc is vital and need to be assessed because this environment is necessary for company survival. The company has flattened wages and leveled affluence. For many years, Americans experienced increase in costs including the healthcare and CPI costs but the wages have been constant and remained stagnant this may send consumers to the hands of their competitors when they are not in a position to justify their high prices. The company's counter intuitive view of value directly benefited them at the time of economic crisis, for this reason, they have continued to grow while their immediate competitors suffer.
The company has studied enough the economic dimension of the environment in which it operates. The structural make up of the economy to the economic policies of the government of the organizational capital market, business cycles, the socio-economic infrastructure and the nature of factor of endowment. These factors have been assessed keenly by the researchers of apple Inc company. They have been able to visualize the external factors that have been affecting their business and anticipating prosperous market situations and to make maximum output out of minimum costs.
The social environment or dimension of a nation will determine the system of society which affects the working of the business. Sociological determinants such as customs and conventions, costs structure, cultural heritage, income of the local people and scientific method, mobility of labor, people's perception towards wealth and respect for our seniors have impact on the performance of the company business. For example, the nature of products and goods that Apple Inc produces depends upon people's demands of the product in turn affecting the attitudes, norms and customs of the people.
Socio-cultural surrounding will also determine the rules or code of conduct that the business should follow. This has influenced the operation of Apple Inc in that they produce products that are compatible to people in different social environment. The socio-cultural environment whereby there is desire to increase on-the go gadgets.
The usefulness and importance of internet and connectivity is on high demand for access everywhere and anywhere using modern technology like high speed wireless. Ultra portable and smart phones devices are used by consumers to access internet anywhere they go as compared to traditional computers. Apple Inc is facing loss of relevance in the landscape of modern technology that is driven by consumer preference. Also, the amount of investment on research and development in high technological gadgets like the iPad, the company is ahead of its competitors in this transition.
Social groups like consumer forum, worker societies and trade unions will intervene if the business operates contrary to the expectations of the people. In2006, it was reported that the sweatshop conditions prevailed in firms in china where the firms that produce iPod operates. One firm that produces iPod had more than 15,000 workers that worked and lived in the factory, with each worker working at least 50 hours of labor in a week. To add on that, workers earned $ 100 per month were to live on the factory premises were required to pay for food and rent. This amounted to little motivation to workers and it almost affected the company negatively.
When the management of apple inc heard of this allegations, they started to investigate the claims and ensured that the manufacturers provided conducive remuneration to workers that were acceptable to Apple inc. the company started to rebrand its image by stating the annual audits of all its reliable suppliers on matters concerning workers rights, slow growth and pruning and laying off supplies that did not comply with the company's new strategies.
The apple Inc is the largest digital media in the world and it has dominated the market since the introduction of ipod. The introduction of iPod has contributed to greater demand from apple Inc products all over the world. With this success, the company is also anticipating major growth in the brand awareness form the incorporation of iphone product that experienced fast sales since its inception on global market.
The company is keen in improving and offering quality electronics products to the consumers with the success of one line of product having the ability and potential to reinforce the success of the other products. The company has worked hard in familiarizing its products to consumers and improving its products every year with new items being released in to keep track of the changing technology.
The company has a competitive landscape where it gets its competitive advantage from its vision and the success with innovations. For instance, in the mid of 2007, AAPL came with iPhone and in June it introduced iPhone 3G. To add on that, AAPLs computers are known for their own operating system which provide an extra avenue for them to innovate. The computers that AAPL produce are based on Mac OS an operating system from Microsoft.
The company believes that the Mac OS taken into consideration the geographical area and thus eases is use. With this method of product control, AAPL is viewed as a unique industry because of its control of the developments of its operating system and software applications. Similarly, the company also differentiated iPod from its other digital media player's products by making the iTunes digital music a device that is used to download music. This retail strategy enabled it to stand out as the most efficient company in iPod production. The motive behind this retail strategy was to attract foot traffic so as to increase the customer base for all its products lines by showing its products as user friendly environment.
The financial trends of the AAPL is multifaceted in that it had been successful to achieve massive profits this decade because of its high quality products, reliable sales strategies and relative pricing of its products. The company's has direct sales that require capital outlays but it has aided margins. For instance, gross margins recorded improvement to 34% from 29%. The company main vision is the shift towards consumer products in its production.
The political dimension of any nation is influence by the political organization like the ideology of the party in power or government, nature of bureaucracy influence of groups, and political party philosophy. Political stability, image of the country to global market, foreign policy, military and defense policy and the leaders in and outside the country influence the growth of business in a country.
The introduction of iPad in 2010 was a major in the AAPL industry as it changed forever. The product an evolutionary game changer was in the hands of consumers for the first time in history. This is one of the groundbreaking and coolest technological devices. The AAPL has already familiarized the product to its customers worldwide in attempt to beat competition from AT&T.
The revolutionary change from the iPod to iPad has shown the determination of AAPL to produce and disseminate new innovation products to consumers. The iPad is a device that everyone wants to posses because it is the new hot tech device on market. The company has decided to promote the product using various methods. For instance, the product is being marketed for free whereby if you sign up for enter the service here you stand a chance of winning a free iPad.
The global economic crisis depicted same signs of relenting but it was a harsh time for the technological company. At this time, many firms like yahoo decided to lay off some of its staff so as to survive the economic crisis by reducing the costs, even Microsoft announced loss and drop in its revenue after a very long time.
This economic environment was the most difficult time for the companies in this century. For apple inc. the greatest competitor to Microsoft suffered as a result of global economic crisis at a time when the company was at the peak of its remarkable growth. The economic turmoil continued to defy economic gravity in the sense that during the first quarter 2009, apple got a profit of $1.2 billion on its overall sales of over $8 million.
The company is facing high competition in all areas of its production. The markets for digital devices are highly competitive because they are characterized by high and rapid technological changes in soft ware and hard ware that have for increased the potentiality and substantial use of computers, mobile communication gadgets and digital electronics that has led to introduction of new products with highly competitive and friendly pricing, features and performance behavior.
The main economic challenge to the company is that its competitors who sell operating system and digital electronics have for long time cut prices on their products and lowered their product margins in order to maintain market share. This has affected the company's financial condition and its operation can be adversely affected by this market pressures on gross margins(Lewis, 2000 p 55-67). The company has a vision of extending its markets opportunity related to iPhone and communication devices.
The mobile communication is very competitive since it has other large and well financed and experienced rivals. The company has been expecting competition in mobile communication firm as its competitors try to imitate some of its products like iPhone and apply them within their smart phones. This is the rough economic environment that the company is operating through. The company products are in competing immensely with products from other company (McCall, 2004 p 65-74). In order to curb and address this challenge, the company is promoting its digital products and content. For instance, this is done through offering of peer to peer video and music services.
The company believes that it is the one to watch because it wants to retain offering highly innovative product of this generation. This is done through the entire integration of its hard ware and soft ware products because they are well aware that their competitors have resources and can produce such products. The company is keen in developing the Chinese economy because it is one of the strongest world economies. When there is economic contraction, the Chinese economy continues to grow. When this economy thrives, increased wages to people nationwide will lead to increase in costs of production for Apple Inc and its OEMs partners. The increase in quality of life will give room for strong customer base for Apple to tap into.
There is the concern about the climate regulation. The talks that took place in Copenhagen focused on committing international societies to look keenly on the emission caps and taxes. There strict carbon emissions rules which demanded considerable financial commitment on production of Apples products pushing the costs up and making the margins to shrink. The company came up with an initiative to implement the green practices; this move excluded them from their competitors who will not escape to feel the burden of regulation.