In this essay I’m going to use Apple Inc. as an example of a company that gets effected by external environmental elements, I’m going to use the PESTLE framework to analyze this. The marketing environment is a combination of factors that effects how the business is running and its relationship with its customers and other businesses. There are both internal and external factors, internal factors can be analyzed using The Boston Box which tells the business whether a product is worth investing in or whether they should stop investing in it, another way analysis that can be done is the SWOT analysis which talks about the strengths, weaknesses, opportunities, and threats of and to the business” a series of decisions that help the organization to develop and formulate strategy’s and goals” (Baines, Fill, Rosengren and Antonetti, 2017), there’s also Ansoff’s Matrix which allows businesses to decide which strategy the business should take, Porter’s Five Forces allows businesses to understand the competitiveness in their market “helps us to assess their impact on an organization present and future competitive positions” (Baines, Fill, Rosengren and Antonetti, 2017). The external factors can be analyzed using the PESTLE framework, as it allows the business to make sense of what environment around them, it stands for Political, Economic, Socio-culture, Technological, Legal and Ecological.
“On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which significantly changed U.S. tax law. The Act lowered the company’s U.S. statutory federal income tax rate from 35% to 21% effective January 1, 2018” (Document, 2020), this is mostly because of the foreign earnings that offset the total earnings in the U.S., due to the amount of foreign investment Apple Inc. does it changes the amount of tax that they pay but also changes the way that they pay for this “By operation of law, the Company applied a blended U.S. statutory federal income tax rate of 24.5% for 2018” (Document, 2020). “In 2011 Apple launched a ‘Global Volunteer program’ that encouraged its employees to volunteer in local communities” (Dudovskiy, 2020), ‘in 2018 more than 250,000 hours were volunteered and more than $125 million donated’ (Dudovskiy, 2020), the company also helps with natural disasters, especially victims of hurricanes. This shows that Apple is socially responsible however some could argue that they only do this to gain a good reputation.
“Despite Huge Unemployment Rate, Apple’s $1 Billion Data Super Centre only Created 50 New Jobs” (Despite Huge Unemployment Rate, Apple’s $1 Billion Data Super Centre Only Created 50 New Jobs | Cult of Mac, 2020), although this center was built it didn’t create a lot of jobs for the people that live there because people that need to run the place need to be highly skilled workers that know what they are doing. Therefore, this also means that Apple’s unemployment rate is usually low as it needs highly skilled workers, and “most employees have the required skill sets” (Hiring and Unemployment over five years Apple Inc is a leading multinational | Course Hero, 2020)
to do their job therefore employees are likely to stay there for longer. However, as technology improves this might changes and Apple’s unemployment might start to increase.
Apple provides “new skills, degrees, and pathways” (apple.com, p.13, 2020) for their employees as well as their suppliers’ employees, there are “over 3.6 million participants” (apple.com, p.13, 2020), they provide different environmental and life skills and well as vocational skills, but also the education and career advancements, having these means that they are helping their employees live better lives but also get better opportunities in the future, that could either be in the Apple itself or another company. Apple also looks at ‘Empowering women through health education” (apple.com, p.7, 2018) this began in “several supplier facilities in China and India, Our goal is to enable women in factories to take charge of their health and well-being by becoming well-informed of risks to women” (apple.com, p.7, 2018). Apple also has “more than 3 million people trained on workplace protections in 2017 and 14.7 million people trained on workplace protection since 2007” (apple.com, p.14, 2018). Views on social culture, and how its changing means that Apple follows these and changes its policies accordingly to this, which is hard to do as it means that the business has to be very flexible.
Apple new technology innovations could be classed as ahead of other businesses in the market because they release a new product at least once a year, they also improve on the products that they create, an example of this is the iPhone and how there are many versions of each better than the other, one problem of this fast innovation is that the price of the final product is usually high compared to other brands. Apple also improves their security skills as technology improves, they have “hardware security” (Welcome, 2020) that protects all apple software they also have system securities “to maximize the security of the operating systems on Apple devices without compromising usability” (Welcome, 2020), they also have “encryption features to safeguard user data and enable remote wipe in the case of device theft to loss” (Welcome, 2020), they also have app security and service securities. Although innovation means that the company improves itself, it also means that they have to make sure that their securities are on the best level so that there are no complaints from consumers.
The legal part of the framework causes businesses like Apple to make sure that they are doing everything within the law and that they provide the best of its consumers. One matter that Apple tries to take care of it their effort to combat Human trafficking and slavery in their own business as well as their supply chains, “Apple conducts business, ethically, honestly, and in full compliance with applicable laws and regulations” (Apple, Human Trafficking, 2018), Apple mentions that if there is a “failure to comply with Apple’s Business Conduct policy, or failure to report a violation, may result in disciplinary action and include termination of employment or an individual’s working relationship with Apple” (Apple, Human Trafficking, 2018), in 2018 Apple had announced that they would be employing victims of human trafficking, however, “the individuals will not be identified to Apple and bull be employed by its suppliers rather than directly.” (Kelion, 2018). Apple has also launched an “Apple Supplier EHS Academy, an 18-month program that aims to improve employee health and safety in the industry throughout the globe” (Dudovskiy, 2020). These legal policies that they have meant that Apple looks after its employees but also that they can help their employees under any circumstances.
Apple has taken a lot of thought about its contribution to the environment and how they can improve it and over the past years, Apple has made many changes to how the business is running and how much pollution its causes but also the amount of material it uses. “100% of all iPhone final assembly facilities worldwide diverted 100 percent of waste from landfills” (apple.com, p.4, 2018), furthermore “320 thousand annualized metric tonnes of carbon emissions reduced in 2017, enough to remove every car off the road in Hong Kong for 62 days.” (apple.com, p.4, 2018). Apple has also reduced the amount of water it uses. In 2018 Apple also stated in their progress report “we worked to divert waste from landfills reuse and recycle materials and conserve our planets precious resources and we continued our efforts on fighting climate change” showing that they are trying to become a greener business. Furthermore in 2018 Apple had created a Zero Waste program which they are working with their suppliers to implement through all of their products.
In conclusion, the impact that the PESTLE Framework has on Apple Inc. is that based on what is happening outside of the business, it has to learn to adapt and change accordingly to those changes, some events may be predictable so Apple Inc. will be able to deal with them, however, there are some changes in, for example, the economy that isn’t so predictable that Apple will have to deal with, therefore having and analysis of what is happening around the business can lessen the impact of those sudden changes. Some changes that the business takes to solve their problem might be taken positively by the public, however, some of its consumers might not agree with it.
2020-3-25-1585164146