Political, Economic, Social, and Technological factor (PEST) are four general environment factors that place a big role in a company’s decision-making process. By undergoing general environmental factors analysis of PEST Apple Inc we will easily handle many assumptions and will also adapt quickly and effectively to the change of external conditions. It will also help Apple to understand their business performance. After understanding their business process their business will be more effective, efficient and developed. Therefore, we will explain these four general environment factors that placed an impact on Apple Inc business process and also how they handle problems that comes out from these PEST factors.
1. Political factor analysis
Political factor gives a heavy influence to Apple Inc decision-making process as they have established many companies all over the world.
However, Apple Inc could not control the political factor. Since 2007 until 2009 it is reported that more than a half of sales of their products comes from countries other than America. To reduce their operating cost Apple also spread their product manufacturing to different companies outside America. Cork, Ireland, Korea, China and Czech Republic are some of the other states where Apple placed their company. Bad international relations, wars, terrorism, and public health issues between U.S. and these states might give a negative impact that may damage the Apple Inc reputation as well as their business process.
For example, when there is political instability between US to states where Apple operates their business, a business delay could be occur and as a result the image of Apple Inc could become bad to its customers and retailers.
According to that information we can see that political relationship between U.S. and other states where Apple Inc placed will be very important as it affects the Apple Inc decision-making process.
2. Economic factor analysis
World economic condition is also becoming one of the factors that influence Apple Inc business process as this company is recognized internationally.
Inflation, recession and currency are three important economic factors that Apple noticed. For example, during inflation period in the U.S. the purchasing power of all the people will decrease and sales of Apple’s product in U.S. will also decrease. As U.S. dollar has lost in value, to minimize the effect of inflation Apple Corporation has purchased itself foreign currency. By doing so the revenue of their product in international market will increase.
As Apple Inc. already go international the U.S. bad economy condition, which take a longer time to recover compare with other country will not be a problem anymore.
3. Social factor analysis
Globalization, Virtual World, and Lifestyle are a social factor that gives a huge impact to Apple Inc business development.
Technology had become the most important media that makes this globalization developed faster and wider. The Virtual world that we can access to nowadays technology is used by Apple as a big business opportunity by developing many virtual media. Music market to cyberspace has big roles that influences people to use this virtual world.
Apple is globally seen as the King of technology caused by their virtual media development and design improvement. The reputation of Apple also goes up and many people had started using it and have become a lifestyle.
Now Apple is noticed as an image of today’s modern individual’s life. Therefore social factor have positive effect on Apple Inc.
4. Technological factor analysis
Nowadays technology’s market becomes wider, thus meaning the competitors of Apple Inc will also rise.
The competition also gets harder as technology changes and innovation developed much faster. As a result all of technology has a short lifetime. That is why Apple needs to upgrade their product more often so they will outdo their competitors easily. In this case Apple will invest a lot of their capital to the Research and Product Development. One of the examples is that Apple installs its own brand operating system, which increases its production cost, and on the other hand Dell as its competitor uses Microsoft’s operating system in all of its products.
That is why external technological factor will also help apple to plan their new goals to compete with their competitors.