Introduction
This report reveals the study of economic environment of Apple Inc. Apple Inc. is a well- known manufacturing company in U.S.A. The study will help to know briefly about Apple Inc. and its products as well as the production factors and the cost structure, reveals the market structure and performance of the company. MACRO analysis provides information about the political, economic, legal and technological factors which helps to know the economic condition of USA and Apple Inc. Finally, it reported the sustainability of the business and positive and negative externalities from the production and consumption of Apple.
The Business and Competitive Environment
2.1: Company
Apple Inc. is a manufacturer Multinational Corporation also
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Segmentation of target market can be categorised in four parts: geographic, demographic, psychographic and behavioural (Kotler, Roberto & Lee 2002). Target market of Apple is teenagers, college and university students, business people, young children, kids, adults, enterprise and government customers (Apple Inc, 2014). Apple Inc. manufactures products according to the demand and choice of their customer which meets with latest technology..
The main competitors are Microsoft, Hewlett-Packard, Dell and smart phone companies such as HTC, Sony, Samsung, Motorola, RIMM and Nokia. Sony has created a portable music player known Walkman is a direct competitor of iPod. The other external threat is related to security which may be exploited by hackers. Security is a main competitive advantage of Apple products. Apple and Samsung are most dominant in smartphone industry. It is very difficult for new firm to enter in the smart phone market because of control over market and main raw material and the loyalty of customers on the Apple
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Apple has both fixed and variable costs. Depreciation on the buildings and equipment’s are some fixed costs. These would be constant each year. The admin cost, rent and salaries would also be fixed.
Variable Cost- Total cost is a sum of fixed cost and variable cost. The expensive that are fluctuated with the output quantity called variable cost. (book references). The variable cost of Apple is labour that is depended on production of new product, meet the needs of existing orders, the need of labour can be fluctuated. All costs on material used in production, wages, and utilities of Apple Company are variable costs.
Retail Costs-Retail margin and retail operating costs (ROC) are key element of retail costs. ROC costs are linked with IT system, billing and revenue collection.
Macro business environment
Apple is investor’s favourite brand because of high return on investments and strong revenue growth. It is reported that the total revenue was $ 224.34 billion on 30th of June, 2015. In second quarter of 2015, sales were $50.77 billion and predicted sales are 233.02 billion in the current fiscal year. The profit margin was 21.52 in the second quarter of 2015 (Makos, 2015). To gain a deep understanding about the stability of political, social and technological system and economic situation of Apple, PEST analysis is a best
Variable costs, for a manufacturing company, are those costs that increase or decrease as production increases or decreases. If production increases, then variable costs will increase; if production decreases, variable costs will decrease. For Claire’s Antiques, examples of their variable costs would be manufacturing labor, raw materials, and manufacturing overhead. Examples of manufacturing overhead would be the utilities that are used in the production facility, and the oils and lubricants used in the machinery. Fixed costs in a manufacturing company are those costs that remain constant regardless of the level of production. Examples of fixed costs for Claire’s Antiques are: sales and administrative costs, rent and/or mortgage on the production facility, and depreciation. Semi-variable, or mixed, costs are costs that have both fixed and variable costs. An example of a semi-variable cost could be if Claire’s leases their delivery trucks, and the lease includes a mileage fee. The monthly lease would be considered a fixed costs, but the mileage fee would be a variable cost. (Hofstrand, 2007). In most cases, fixed costs are usually higher than variable costs, and can absorb a great deal of profits. Because of this, some companies may consider converting their fixed costs to variable costs.
Apple has garnered a competitive advantage through all aspects of the supply chain. On the production front, Apple has made many high-priced
1) Total Variable Costs are 60% of Total Costs; While the other 40% are from fixed costs.
Apple has its competitors, as it is expected, and they do not fall behind by much. One of its biggest competitors is the company Samsung. For years, those two companies have been head to head in the electronical world. All over the web one can find all sorts of articles talking about the conflicts of those two companies and about how they each claim that the other one took their products and just changed its name. But thankfully, those two companies are still strong (no matter how much people complain about the other one) and they both have a lot of people supporting them. There are two sides when talking about phone and electronics: the Apple side and the Samsung side. Now, what those two companies need to be careful about is to not let their guards down and allow the competition to take over, but then again, Apple is well... Apple and they would never let that happen (they have not done it for almost 50 years, they would not do it
Over the last decade, Apple, Inc. has been one of the most successful company in the world. Apple is a multinational corporation that designs the electronic, manufactures, sell a several of related software. It provides many products for example iPhone, iPod, iPad, Mac, Apple TV. The important factors that Apple, Inc. use is technology. Technology with new innovation has the advantage that help an organization to beat with another company. And bring more competitors to the market. Most of the product in electronic industries are based on innovation. Thus, in order to achieve the goal and keep up with their competitors, Apple must frequently introduce new products or services
This report will analyze and discuss the most important elements of the marketing environment for the launch of the iPhone, that is to say the main three levels of the marketing environment: the micro-environment through the customers, competitors and distributors, the macro-environment through technological, economical, social, political and environmental forces and finally the internal environment through the relation of Apple with its employees and its marketing philosophy. The analysis for the micro-environment is based on Porter’s 5 forces model and the one on the macro-environment is based on PEST analysis. The report will also give an interpretation for each of these aspects, a conclusion with a rating of the attractiveness of the UK current marketing environment in which the iPhone is launched.
is yet to reach its maximum potential. Truly a unique entity in its accomplishments and organization, apple through the conviction and leadership of Steve Jobs its founder and then CEO; have pioneered the revolution of mobile technology. When it comes to strength, apple Inc, has a great marketing team with great marketing and advertisement capabilities, strong brand awareness, a strong and extensive distribution channel, and most of all a vertical integration and the most obvious which is customer loyalty. With the acquisition of valuable companies such as Beats, WhatsApp, mobile payment systems with the IPhone 6, wearable gadgets like the IWatch, apple uses these opportunities to satisfy its loyal
The company not only produces the number of highly technological devices, but also has a great brand ideology lying behind. The following chapters would review each of factors determining Apple`s success.
Apple Inc. works by using the particular Apple brand name to be able to be competitive across many very aggressive market segments, including the computer system market having its Macintosh distinctive line of personal computers and linked computer software, the customer gadgets market using products such as the mp3, electronic audio supply through it is iTunes New music Retailer, the particular smart phone market place while using the New iphone, magazine, publication, video game titles and applications submitting through the particular Apps Store intended for new iphone 4 plus the apple ipad tablet processing gadget, and motion picture and TV SET written content supply using Apple TV SET. Regarding internet marketers, the organization is usually creating an extremely solid existence to be able to compete with The search engines from the promotion market place, through it is Programs company and iAd community.
Firms have many costs associated with their production output levels. These include fixed, variable costs and total costs, which is a summation of the former two. As the names suggest, a fixed cost does not alter with the output level, whereas the variable cost does. The equation linking these three are;
Through its offerings Apple has been able to create a unique position for itself in the technology market. By operating on healthy margins it has been able to create phenomenal value for its shareholders. Apple, recently became the most profitable company in the world on the back of spectacular iPhone sales (34000 phones an hour) with around $180 billion in cash in its bank account. This is definitely a defining moment for Apple. As per the chart below showing the geographic distribution of Apple’s revenues, the Europe and the American markets are saturating
has a competitive advantage over their competitors. One of the methods that Apple uses to maintain a competitive advantage in international markets is tying their hardware and applications together with an integrated operating system. This means that one of their devices, such as the iPad works very much like the iPhone and many of the apps run one device just as they do on the other. The only difference would be the size of the product. Apples laptop is larger than the iPad which is larger than the iPhone. Otherwise these products share the same functionality and information through connectivity. They share functionality and information seamlessly through connectivity, constantly updating customer’s lives through simple plug-in. I think this is the number one reason why Apple has an edge over their
The Apple brand name is a household name, the brand value of Apple, Inc. improved to $13,724 million in 2008 from $11,037 million in 2007 (Datamonitor PLC, 2009). Apple is different from its competitors because it produces high quality products, its products are also unique and attractive and this has helped to increase its market shares. Since Apple is known globally, 54% profits come from foreign markets (Datamonitor PLC, 2009). Apple products are easy to use and carry around, majority of its products are light, small and very easy to carry around and it has a major advantage of product diversity, there is something for every one of all ages.
A “Fixed cost” can be defined as “a cost that does not change with an increase or decrease in the amount of goods or services produced or sold”. It is time related.