Running head: INTRODUCTION TO BUSINESS MANAGEMENT 1

Introduction to Business Management

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INTRODUCTION TO BUSINESS MANAGEMENT

Introduction

The business operations of an organization can be influenced by a wide range of factors

that are both internal and external. Internal factors are those factors within an organization while

external factors are those outside factors that affect a business. The external factors include

technological changes, legal, economic, social, environmental and political factors that can be

analyzed through conducting a PESTLE analysis of the organization. The purpose of this essay is

to conduct the PESTLE analysis of Apple Inc. with the aim of identifying the external factors

that have the most implications for the organization and how the organization’s policy has taken

account of these factors.

Apple Inc.’s PESTLE Analysis

The first factors which affect Apple’s business are the political factors both in the

organization’s macro and remote environment. One of Apple’s significant political factors is the

political stability in developed economies. This factor presents an opportunity for Apple to grow

its business operations. The second political factor is the improving free trade politics which also

presents an opportunity for Apple’s to grow its operations. The third political factor is the trade

dispute between the US and China. This factor is a threat to Apple’s growth because of the high

tariffs which China can impose on Apple products.

The second factors that affect Apple’s business are economic factors on the company’s

micro and macro environments. Some of the economic factors include the fast growth of markets

in developing countries, stability of the economies in developed countries and increased

disposable incomes among target customers. All these factors have a positive influence on the
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growth of this company. However, higher disposable incomes among target customers and the

rapid growth markets in developing countries are the most significant external factor because

they present Apple with an opportunity to increase revenues through its sales in these markets. 

Third, are the social factors which include the social trends that affect business operations

on the market. The social factors play a significant role in influencing customer expectations and

behaviors. Some of the social trends that influence the organization’s operations include the high

dependence on digital devices and the increasing access to mobile services. These forces provide

opportunities for the company to grow while international sentiments against the organization are

a threat to the company’s growth.

Technological factors also affect the company’s business in macro and remote

environments. Some of the technological external factors include growing the mobile market,

rising demand for cloud computing, increasing technological capabilities for other organizations

and increasing adoption of technology in business. The increasing technology organizations such

as Amazon threaten Apple. Inc. because new entrants are likely to flood the market and cause

stiff competition. However, the firm gets an opportunity to grow through the growing mobile

market, growing cloud computing demand and high demand for technological integration in

business. 

Environmental factors also affect the micro and macro-environment of Apple Inc. Some

of the environmental trends which affect the business are energy efficiency trends and business

sustainability trend. These factors offer an opportunity for the growing company to grow because

they push the company towards strengthening its corporate image.

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Apple’s micro and macro business environment are also affected by legal factors. Legal

factors refer to the laws and regulations that affect the operations of an organization in a given

market. Some of the most significant legal factors that affect Apple Inc. include the legal

challenges that the company has faced with regard to its policies and practices related to different

areas of the business such as after-sales services. These legal challenges pose a great threat to the

growth of Apple’s business. Increasing privacy regulations are also legal factors that affect the

business. This legal factor is a threat and an opportunity for the business to expand its operations.

Organizational Policy and the External Forces

Apple Inc. has a policy that has significantly taken account of some of these external

forces to ensure that it does not experience threats to the growth of a business. For instance, the

policy of this organization focuses on trading policies, changes in the law, laws regarding health

and safety, employment as well as regulatory bodies. The company’s policy requires the

company to understand the new legal laws and amend its policy according to the new

regulations. The policy of the company also addresses the technological factors that affect the

business of the company (Khan, Alam & Alam, 2015). For instance, the organization seeks to

attain a competitive advantage through improving its technology and introducing new

technology to its business. 

Other than technological and legal factors, Apple’s policy has taken account of the

environmental factors that affect its business operation both in its macro and remote

environment. For instance, the organization is taking strategic measures to ensure that its

technological products and operations respond to ecological trends. The policy of this giant

organization also supports business efforts to utilize the opportunities on these trends. Lastly, the
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company’s policy takes account of the social factors. For instance, once the company’s product

is ready, the company makes sure to generate awareness among customers by advertising the

rich features of its products. However, the company’s policy has not taken an account of the

political and economic factors that affect its operation because the company has not set any

strategies that would help it handle the political and economic forces on its external environment.

Choosing External Factors to Attend to

Conducting a PESTLE analysis is important for any organization because it provides a

clear picture of the kind of environment that a business is operating in. The external factors

affect a business both positively and negatively (Gupta, 2013). However, managers should attend

to external factors that offer great opportunities to the company as well as those which offer

threats (Dockalikova & Klozikova, 2014). This means that managers should attend to all the

external factors that the company faces on the market. 

Managers should attend to factors that offer opportunities for growth so that the company

can take advantage of these opportunities before their competitors. For instance, Apple Inc. has

to take the advantage of the rapid growth of developing countries and ensure that its products

reach these markets before those of their competitor (Shabanova, et al., 2015; Yuksel, 2012).

This way, the company will have to attend to the economic external factor which provides an

opportunity for the company’s growth. 

The managers should also attend to factors that pose great threats to their organizations

because if they do not attend to these factors, the threats can become significant problems that

would affect the reputation of their companies and eventually lead to the fall of the companies.

For instance, Apple has faced several legal challenges including legal challenges associated with
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the company’s practices related to different areas of the business such as after-sales services. The

company has also faced a number of legal suits related to salary and job mobility. The

organizational managers do not have to be selective on attending to the external factors that

affect a business (Rastogi & Trivedi, 2016). They should attend to these factors in equal

measure; hence conducting PESTLE analysis is very important for organizational growth.

Conclusion

Conducting a PESTLE analysis is an important procedure that every organization should

consider during its operations. This analysis can help a company to identify the external factors

that affect its business environment and the opportunities and threats that come along with these

factors. Understanding the external factors can help an organization to take advantage of

opportunities on the market ahead of its competitors and address the threats before they become

significant.
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References

Dockalikova, I., & Klozikova, J. (2014). MCDM Methods in Practice: Determining the

Significance of PESTEL Analysis Criteria. In European Conference on Management,

Leadership & Governance (p. 418). Academic Conferences International Limited.

Gupta, A. (2013). Environment & PEST analysis: an approach to the external business

environment. International Journal of Modern Social Sciences, 2(1), 34-43.

Khan, U. A., Alam, M. N., & Alam, S. (2015). A critical analysis of internal and external

environment of Apple Inc. International Journal of Economics, Commerce and

Management, 3(6), 955-961.

Rastogi, N. I. T. A. N. K., & Trivedi, M. K. (2016). PESTLE technique–a tool to identify

external risks in construction projects. International Research Journal of Engineering

and Technology (IRJET), 3(1), 384-388.

Shabanova, L. B., Ismagilova, G. N., Salimov, L. N., & Akhmadeev, M. G. (2015). PEST-

Analysis and SWOT-Analysis as the most important tools to strengthen the competitive

advantages of commercial enterprises. Mediterranean Journal of Social Sciences, 6(3),

705.

Yuksel, I. (2012). Developing a multi-criteria decision making model for PESTEL

analysis. International Journal of Business and Management, 7(24), 52.