Economic Environment Of Apple Inc.

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

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

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