Apple Case Study

                 CDBM

                      Content

Background of apple....................................................................3

PESTEL

Political........................................................................................4

Legal............................................................................................4

Legal............................................................................................5

Technological..............................................................................6

Eco-environmental......................................................................6

Eco-environmental......................................................................7

Economic.....................................................................................7

Social-culture...............................................................................7

Social-culture...............................................................................8

Porter’s five forces

Competition rivalry......................................................................8

Supplier Power............................................................................9

Buyer power................................................................................9

Buyer power...............................................................................10

Threat of new entrants...............................................................10

Threat of new entrants...............................................................11

Threat of substitutes...................................................................11

Summary....................................................................................11Reference...................................................................................12

Reference...................................................................................13

Reference...................................................................................14

Reference...................................................................................15

Background of Apple

Apple is an American electronic company funded by Steve Jobs and Steve Wozniak on April 1st 1976, they sell mac computers, Ipod media players, Ipad tablet computers and also started to sell Iphone smart phone in 2007. Since it’s a technical company, Apple sells a variety of related software, services, peripherals, networking solutions, and third-party digital content and applications.

Within 40 years, Apple has become the number one of the world’s most valuable technical company on Forbes list which valued at $741.8 billion. They created 92,600 jobs for people and 199.38 billion of sales.  It must be very hard for them to achieve such a success. (Forbes, 2015)

Today this student will talk about Iphone as Apple doing their business in China.

Iphone is a smart phone consists of an Ipod, a tablet PC, a digital camera and a cellular phone. It includes internet browsing and networking capabilities. It can meets most things that consumers want in a smart phone, we can use it to do lots of thing in our daily life. (Rouse, 2007)

As most of customers are satisfied with iphone, Apple made a large amount of profit by iphone. They sold 6.1 million first generation iPhone units over five quarters, and by the end of fiscal year 2010, a total of 73.5 million iPhones were sold. And also a nice score for iphone 4, 4S, 5, 5S, 5C, 6 and 6Plus. It’s due to Apple is doing worldwide business but not only America.

As China has the world’s biggest market, and China has 1.282 billion mobile phone users which 520 million users are using smart phone. A lot of companies want to do business in China, of course including Apple. But it’s not that easy to enter a foreign country to do business.

So now, this study will analysis the advantages and disadvantages that Apple might meet while doing business in China by PESTLE. Which means Political, Economic, Social-culture, Technological, Legal and Eco-environment. Because it’s a simple and useful tool to analysis the key factors that might affect Apple.

After that, Porter’s five forces will be used to identify the main forces that Apple might meet. Through identify the bargaining power of buyer and supplier, threat of new entrants and substitutes, and the competition rivalry, the managers can easily understand what’s their goodness and weakness. By comparing all the information, they can make right decisions to help company make more profit.

PESTEL analysis Apple in China

1. Political

The relationship between USA and other countries.

There is an announcement from U.S Department of State (2015) mentioned that The U.S seeks to build a positive, cooperative and comprehensive relationship with China. It’s always good for the business man if two countries have a good relationship, then they can do business between these two countries. In this case, Apple really benefit from it.

The finalization of a deal between Apple and China Mobile, the world's largest mobile network, was announced on 22 December 2013. The multi-year agreement provides iPhone access to over 760 million China Mobile subscribers. (Associated Press, 2013)

China is playing an important role in this world now, and it’s an increasing power for China while an established power for U.S. Since China is a growing country, there are some provinces still have a lot of development of space. So companies from foreign countries might make profit in some area. And Apple made a good number of profit in technical market in China.（Wei , 2014）

Tariffs

Since tariffs are the main revenue of the country, different countries have different tax in different field. China charge 17% value added tax of each iphone if they come into China market, it means China government take 17% of profit from Apple, so Apple have to increase price in China market. The price of iphone 6 plus in USA was $949 but it’s $1,191 in China, we can see Apple increased 25.5% of price to meet their profit. Iphone sales got affected because of the different prices between China and U.S,