Effect of External and Internal Environment
Introduction
Organizations have both an internal and external environment. To begin with, the forces or circumstances within the borderline of the organization are the components of the internal environment. Notably, the internal environment comprises for the most part of the owners, employees, board of directors, stakeholders, and the corporate culture. On the other hand, factors that are extrinsic to the organization are the components of the external environment. It is imperative to note that these are elements that the organization bears no control of as they impact the entire the industry and therefore the organization cannot influence how such aspects will shape up (Nieuwenhuizen, Badenhorst-Weiss, and Rossouw, 2008). On the other hand, factors within the internal environment are those that the organization can control and have an effect on how they will turn out to be. The external environment is categorized into the general environment and the task environment. On the one hand, the general environment encompasses factors that may have an instantaneous direct impact on operations but nonetheless impact the organization’s activities. On the other hand, the task environment comprises of factors that have a direct impact and are also impacted by the operations of the firm (Nieuwenhuizen, Badenhorst-Weiss, and Rossouw, 2008). The main objective of this paper is to extensively analyze the effect of the internal and external environment on Apple Inc.
Brief Background of the Company
Apple, Inc. is one of the most renowned and successful companies in the markets. The prevalent company with a market capitalization of $656 billion is pervasive. Since its advancement by Steve Jobs, Apple has come to be one of the largest companies in the market and barely needs an introduction. Apple Inc.’s business operations encompasses the manufacturing and retailing of iPhones, iPads, and a sequence of unveiled laptops and desktops such as the Mac and the MacBook and MacAir. In addition, the company also manufactures the software that is employed in the running of these devices and its business also takes into account a variety of media such as movies, music, e-books, in addition to software applications. Most of all, the company has also integrated a cloud storage service in recent ties and an electronic apple payment processing system (Yahoo Finance, 2018).
PESTLE Analysis
Pestle analysis is delineated as a tool employed in the analysis and monitoring of the external environment of an organization. It is a framework that facilitates the comprehension of the external influences on an organization. These external factors or influences comprise of political, economic, social, technological, environmental, and legal aspects. Pestle analysis is beneficial in the appraisal practice of the dynamic and competitive business setting. It encompasses an evaluation of each of the fundamental factors, which directly and indirectly have an impact on the business performance (Zanoni, 2011).
Political
The political environment is linked with government policies and engagements. The magnitude to which Apple Inc. is capable of accomplishing its key objective of profit maximization is reliant on a variety of political factors comprising of government stability, corruption, extent of bureaucracy and also freedom. In the contemporary, the most significant political aspect that has influenced Apple’s operations is the company’s encounter with the United States Federal Bureau of Investigations (FBI). In particular, the company’s disagreement with the agency took into account the aspect of whether Apple should have been obligated to hack an iPhone account that has been utilized by one of the terrorists during the 2015 San Bernardino mass shooting. Subsequently, this emanated into a political deliberation splitting the general public into advocates and antagonists of the company (Tibken, 2017). This significantly impacted the company in that it had to incur costs as high as $5.46 million in the last financial year and also the revenue generated by the company declined from $58 billion to $50 billion owing to the decreased number of iPhone sales from $61.2 million to $51.2 million in the similar financial period (BBC News, 2016).
Economic
The economic environment takes into account financial performance, the level of demand and supply within the marketplace, levels of employment, and also consumer base levels. It is imperative for organizations to be economically sound in order to prosper. There is an extensive variety of economic factors that impact Apple Inc. both directly and indirectly. One of the key economic factors is the exchange rate in the market. It is imperative to note...
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