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Socio-Economic and Legal Assessment Report: Apple Inc.
Executive Summary
This report examined the impact of socio-economic and legal factors on the market activity of the Apple Corporation, one of the flagships of the digital technology industry. With a relatively short history of development, Apple has ensured that today, the companys products are in high demand among the target audience globally. As a method of evaluating the drivers affecting the corporations business, a literature review was conducted in which credible academic sources were utilized. Based on the findings, Apple was described as a company that adhered to flexible management and business organization principles and followed any shifts in both the economy and the social sphere. Several political factors were identified, which influenced the work of the corporation, among which were harsh tax laws and dependence on the production of components in China whose manufacturers operated at more loyal prices. As the recommendations, a sales adaptation was proposed with a focus on market segmentation to expand the share of target consumers, as well as an increase in the product line to satisfy the interest of as many buyers as possible.
Introduction
External market criteria that influence demand are crucial aspects that often determine the success of enterprises and shape the corresponding competitive trends. As a target business to consider, the Apple Corporation is used, the globally renowned company and one of the most successful organizations in the field of innovative technologies. Starting its history in 1977, by now, Apple is one of the leaders in sales of digital equipment, and smartphones of this model are the leading product. This is confirmed by the report for 2020, when the corporation had $137 billion in sales of iPhones, thereby generating half of its total profit (Chen, Liu, and Gong, 2021, p. 3053). In this regard, one can say that Apple is an established company with a strong consumer demand. At the same time, individual factors related to socio-economic trends are important to take into account to provide target consumers with in-demand products.
Various socio-economic criteria are determinants that influence the business model that Apple adheres to in its global activities. Jamalova and Constantinovits (2019) consider social and economic development factors individually to identify specific variables that shape overall market trends collectively. The researchers mention the accessibility and innovative nature of the companys business as the key characteristics related to the financial component, while they regard the education of the population, the level of healthcare, and the readiness for technological disruptions as significant social factors (Jamalova and Constantinovits, 2019). Any shifts in these criteria directly affect the demand for the corporations products, and therefore, the companys management needs to continuously monitor these indicators not to lose profits maintain a competitive advantage. Political factors associated with legislative norms and legal regulations are additional nuances to take into account when promoting the brand in the market. As a result, Apples business model is directly dependent on socio-economic and legal aspects.
Changes in these areas are essential criteria influencing the development of the business in a competitive environment and numerous requirements related to financial reporting. Moreover, according to Chen, Liu, and Gong (2021), changing social, economic, and legal environments have a direct impact on the corporations internal operational principles, such as supply chain organization or hiring policies. In other words, the more intense such shifts are, the more attention should be paid to their consequences due to the need to adapt demand to production and marketing capacities. The analysis of the aforementioned shifts, along with technology drivers, through a review of current literature and study of legislation can help highlight the key features of the Apple Corporations global marketplace and identify which political and legal factors influence the companys business to the greatest extent.
Literature Review
The analysis of relevant academic sources helps reveal various trends and concepts associated with Apples business, particularly with the determinants that affect its development model in the global market. For instance, in her study, Meissner (2019) notes that Apple products are never in excess, indicating that the companys management pays close attention to the demand parameter. At the same time, while adhering to this approach, this is important for the corporation to take into account a wide range of criteria that affect the interest of target consumers in the companys goods. Lin (2022) cites the example of Apple smartphone sales in China and notes that, despite assessing social factors, including demand, the corporation lacks data related to macroeconomic dimensions, particularly inflation effects. Such an omission can lead to inefficient planning and, in turn, cause losses due to discrepancies in anticipated and actual profits. As Lin (2022) states, cash flows and marketing initiatives are critical to analyze by focusing on a wide range of economic criteria to exclude emergency measures and coordinate pricing and other policies. Therefore, macroeconomic performance should be planned carefully, especially in the context of Apples global business.
In assessing the factors influencing the market promotion of Apple, many researchers mention the concept of knowledge economy. Bratianu (2018) pays particular attention to the types of risks many firms face and notes the crisis in the corporation after the departure of Steve Jobs, its founder and main inspirer. According to Bratianu (2018), Jobs compelling vision was one of the main drivers of customer engagement, and the author assesses the risks of losing knowledge drivers are rated as high. While focusing on innovation, Apple has always needed qualified employees. As a result, as Bassell and Lambert (2018) argue, intellectual capital is one of the most important assets to generate for successful market practices. The researchers highlight Apples intangible assets as essential attributes of success, and the brands credibility with customers is largely a consequence of the active work to strengthen the intellectual base of the corporation (Bassell and Lambert, 2018). Knowledge is seen as a strategic resource for achieving a competitive advantage and building productive capacity (Bratianu, 2018). Thus, by promoting this idea in its business, Apple has managed to implement successful sales channels globally and earn customer loyalty worldwide.
By adapting to current realities, Apple demonstrates flexibility and offers users relevant services. Kurita et al. (2021) analyze the use of corporate products in Japan during the COVID-19 pandemic and note that massive restrictions on social contacts spurred Apple to create conditions for helping the population. The researchers note the value of the Apple Maps, a user activity tracking application, in alerting citizens to the necessary protective measures and helping them choose the best travel routes (Kurita et al., 2021). Initiatives like these show that the company is responding to demographic and socio-economic shifts. In healthcare, Apple is also an innovative organization; the company offers people post-surgery rehabilitation opportunities by popularizing VR glasses and other equipment that can transform the usual functions of visual perception (Lohre et al., 2020). At the same time, the corporation cannot influence global problems. According to Wu (2022), recent geopolitical events, namely the military aggression against Ukraine by Russia, have become the reason for the decline in sales of Apple products in the Eastern Europe region, which is inevitable in such a crisis. However, the company is doing its best to improve its sales figures.
As the worlds flagship in digital portable equipment, Apple is constantly optimizing its technological capabilities to respond to market needs. Coccia (2018) examines the development path of the corporation from its inception until recently and notes a significant breakthrough in the company achieved through continuous innovative development. The author notes the global industrial changes that have affected Apples business model and mentions the production of wireless headphones, keyboards for smartphones, and other devices that reflect the willingness of the corporation to meet the interests of the target market (Coccia, 2018). Another study by Son et al. (2018) evaluates Apples strategic growth in the context of maintaining brand sustainability through innovation. The researchers point out that technological drivers of change are one of the few ways to maintain continuous growth in capacity, which is important for organizations like Apple (Son et al., 2018). The success of the company suggests that by choosing this path of development, the corporation has secured the image of one of the key participants in the digital market, thereby earning credibility in this niche. Therefore, technological drivers in many ways help Apple maintain a high competitive position.
When summarizing the findings from the literature review, one can see that Apple aims to respond to any changes in the socio-economic environment and takes into account the current demographic shifts to maintain a leadership status in its market environment. Both macroeconomic dimensions and smaller drivers serve as tools for influencing the corporations business model, and the flexibility that Apple demonstrates reflects the companys interest in meeting the demand of indicators of the target audience. Thus, from the perspective of socio-economic trends, the company in question is sustainable, which is largely realized through technological disruptions.
Impact of Legal Framework and Political Factors
In addition to socio-economic drivers, several political and legal factors play a role in the development of the Apple Corporation and the companys management dynamics. One of the essential aspects that need to be taken into account in the course of the financial activities of the organization is tax legislation. According to Elbra and Mikler (2017), Apple is one of the worlds most successful corporations, generating billions of dollars in revenue, and as such, the company is under close fiscal scrutiny. Income inequality is a policy-level issue that the government has been wrestling with for a long time, and high reporting requirements create conditions for Apples management in which financial activities must be conducted carefully. Another factor related to politics is the corporations dependence on the Chinese manufacturing market. As Tien (2019) argues, the cost of manufacturing components in the US is significantly higher than that offered by Eastern partners. As a result, when looking for alternative assembly sources, Apple is forced to raise prices for its products, which, in turn, directly correlates with demand. Therefore, from a political perspective, managing the business domestically creates difficulties for the company.
Increasing the prices of its products is one of the long-term implications for the digital technology sector in which the company in question operates. Moreover, due to dependence on eastern manufacturing and higher domestic production costs, the organization will have to look for alternative ways to generate profits, for instance, through the optimization of existing marketing principles. Tien (2019) compares the development of Apple and Samsung brands; according to the author, the latter South Korean company offers a broader product line, and target market segmentation is more advanced. Apple is forced to shape its pricing policy based on cost-benefit factors, which makes the company directly dependent on customers with exclusively high purchasing power (Tien, 2019). In addition, to maintain the trend of innovation the corporation has built, in the future, Apple will have to continuously optimize its products to match the image of the leading company in its sector. This means that the digital area will constantly evolve, and new products will be introduced to meet customer needs for improvement. Thus, long-term implications for the field where Apple operates will concern pricing policies and production regimes.
In the context of informal legal systems, Apple is the leader in its market segment. At the same time, when assessing this status from the standpoint of formal legislation, anti-trust laws relate directly to the companys activities. Geradin and Katsifis (2021) give an example of a decade-old lawsuit in which Apple was accused of not respecting the principles of market equality and trying to monopolize the field of digital content by creating tough conditions for partners to enter the Apple App Store, one of the key official services of the corporation. According to the competition law, which Geradin and Katsifis (2021) mention, the corporation was required to be held responsible for policies related to the desire to exclude competitors activities. Such a legal framework is a deterrent to Apples business because the company that positions itself as a leader in high technology cannot count on comprehensive market control. In addition, any attempt to hide real income entails sanctions since the tax laws are harsh. As a result, various regulations are crucial for Apple to comply with to continue conducting its business and follow the rules of the market industry.
Conclusions and Recommendations
While summing up the findings, one can note that the Apple Corporation is a successful modern company that has occupied a specific market niche timely and is one of the flagships in the field of digital technologies. Social trends are significant drivers affecting the business of an organization, and any changes in the global economy are inevitably reflected in demand indicators. Therefore, Apple adheres to the policy of flexibility in its activities. Through constant work to update existing products, the company maintains the interest of buyers and develops sales in numerous world regions. At the same time, with a multibillion-dollar profit, the corporation is forced to keep strict reporting and adhere to anti-trust laws because precedents regarding accusations of trying to eliminate competitors prove that Apple is forced to take into account political and legal factors. Dependence on Chinese production complicates sustainable sales, and due to this constraint, the high-tech market dictates special sales principles for Apple, which relies primarily on customers with high incomes.
As one of the recommendations for the organization, focusing on market segmentation can be a potentially powerful solution to increase customer share and, consequently, sales. By following the experience of Samsung, Apple can work to increase the number of products to meet the interests of different consumers. The desire to maintain leadership in its niche is an important prospect, but not to lose its competitive advantage, the company should work on its pricing policy and production principles to avoid dependence on the Chinese market, thereby strengthening the business. The manufacturing of new products under the Apple brand can increase the number of customers, which is one of the main tasks for any organization. Therefore, the corporation in question can strengthen its position in the market by expanding its product line.
Another recommendation for Apple is to work on creating products for different categories of the population, including those who cannot afford to buy innovative goods made with the latest technology. The companys pricing policy dictates the conditions under which not all buyers can purchase Apple branded smartphones. The sooner the corporation launches the production of budget models of the middle price category, the sooner its position will strengthen in the market, which is particularly important in regions where sales of the companys products are low due to buyers insufficient financial power. The expansion of the product line and the revision of the pricing policy are initiatives that the companys management may implement in the near future. These decisions will help enhance brand value and impact the digital marketplace industry as a whole through an increase in affordable goods.
Reference List
Bassell, M. and Lambert, S. (2018) Marketing leadership in a knowledge economy, Atlantic Marketing Journal, 7(1), pp. 33-46.
Bratianu, C. (2018) A holistic approach to knowledge risk, Management Dynamics in the Knowledge Economy, 6(4), pp. 593-607.
Chen, X., Liu, Y. and Gong, H. (2021) Apple Inc. strategic marketing analysis and evaluation, Advances in Economics, Business and Management Research, 203, pp. 3053-3061.
Coccia, M. (2018) Disruptive firms and industrial change, Journal of Economic and Social Thought, 4(4), pp. 437-450.
Elbra, A. and Mikler, J. (2017) Paying a fair share: multinational corporations perspectives on taxation, Global Policy, 8(2), pp. 181-190.
Geradin, D. and Katsifis, D. (2021) The antitrust case against the Apple App Store, Journal of Competition Law & Economics, 17(3), pp. 503-585.
Jamalova, M. and Constantinovits, M. (2019) The comparative study of the relationship between smartphone choice and socio-economic indicators, International Journal of Marketing Studies, 11(11), pp. 10-25.
Kurita, J. et al. (2021) Evaluating Apple Inc. mobility trend data related to the COVID-19 outbreak in Japan: statistical analysis, JMIR Public Health and Surveillance, 7(2), p. e20335.
Lin, G. (2022) Macroeconomic news, and management forecast, International Journal of Accounting & Finance Review, 10(1), pp. 76-82.
Lohre, R. et al. (2020) Virtual reality in spinal endoscopy: a paradigm shift in education to support spine surgeons, Journal of Spine Surgery, 6(1), pp. S208-S223.
Meissner, M. (2019) Against accumulation: lifestyle minimalism, de-growth and the present post-ecological condition, Journal of Cultural Economy, 12(3), pp. 185-200.
Son, I. et al. (2018) The impact of innovative technology exploration on firm value sustainability: the case of part supplier management, Sustainability, 10(10), p. 3632.
Tien, N. H. (2019) International distribution policy comparative analysis between Samsung and Apple, International Journal of Research in Marketing Management and Sales, 1(2), pp. 24-27.
Wu, D. (2022) Apple to keep iPhone production flat as market grows tougher. Web.
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