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What Are the Key Challenges Apple Is Facing, Both in Terms of the Macro-Environment and Industry Competition?

Essay by   •  August 15, 2019  •  Exam  •  589 Words (3 Pages)  •  123 Views

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Q1. What are the key challenges Apple is facing, both in terms of the macro-environment and industry competition?

Founded over four decades ago, Apple Inc ,formerly Apple Computer Inc, is the industry leading multinational corporation with core products of its IOS range of smart phones, media players and personal computer lines. It was the world's largest publicly traded corporation by market capitalization and has an estimated value of $1 trillion by 2018.Despite of its legendary growing history which its products certainly changed the way of people’s communication and living, Apple is still facing great challenges in terms of macro environment and industry competition.

Political Factors: Apple manufacture most of its products in China relying on the low local labor costs. Therefore, any policy changes between China and US government will have a large impact on the cost of the corporation. The trade war between the two countries has a negative influence on Apple as restrictions on exports and imports together with the rising taxes certainly will not drive up the company revenue.

Economical Factor: Since Apple is a multinational organization, it generates a lot more revenue overseas than in the USA. Hence, the foreign exchange rate must be a key factor of company profits. Due to the increasing exchange rates against other currencies such as Euro and Yuan, the production costs rises and reduces the profits in terms of dollars.

The continuing global recession since 2008 and growing inflation rate also put pressures on the business.

Social Factors: It is the leading name in industry with very high brand loyalty. Apple products’ high prices attracts more customers from the middle or upper class of the society and the carriers of iphones or Mac computers seem to establish a higher social status as not everyone can afford the prices. In one way, it is good to attract more customers who would like to obtain the social status , however, when targeting the third world developing countries customers, this may become a barrier in market as more customers would choose cheaper alternatives.

Technical, environmental and legal factors: the

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