External and Internal Factors of an Organisation

INTERNAL AUDIT

The productivity of any company depends highly on the industry and market in which it operates and the productivity overall refers to the ability of an organization to convert the raw materials of that company with respect to the goods and services that the company plans to sell. Smart work leads to increased productivity and this ultimately helps in improving performance. In order to improve productivity, an organization needs to formulate excellent strategies that can help them in achieving the intended objectives of the company.

EXTERNAL AUDIT

PESTLE Analysis:

Pestle analysis helps in analysing the external environment of the company and the industry analysis is done through which relevant conclusions are drawn (Deasy and et.al, 2016). Pestle Analysis helps in analysing every key aspect and then determining what are the strategies that can be adopted in the external environment and how these could help in bridging up the existing gaps. Apple is already an extremely well established company that is ruling the world with it’s merchandise of consumer electronic brands. The following factors help in analysing the external environment in which the company operates:

• Political Factors:

  This American super brand is earning huge profits and the resulting income inequality has been a major political issue in many countries including UK (Cardoso, 2017). Additionally the company is heavily dependent for its reduced manufacturing cost in China and therefore, the ongoing tiff between the two economies might lead to reduced sales of the company affecting their operating in other countries as well where the unrest in the political environment leads to potential loss. Additionally, after Brexit, the political stability in the UK is also questionable but Apple being a reliable international brand might not get affected by this unrest in British economy.

• Economic Factors:

  The economic position of UK’s economy is fairly strong and well settled i.e. there are no major fluctuations and the income earning is also fairly well (Gardere, Sharir and Maman, 2018). However, the middle class which is the main targeted consumer segment of the company in various economies is not experiencing much increase in their earning capacity and therefore, the stagnating income earning capacity is leading to reduction in the sales volume of the company in various markets and economies spread all over the world. However, the best strategy that the company can adopt in the present context is to delve into the markets with newer strategies and the marketing campaign needs to be restructured making the brand attractive again.

• Social Factors:

  The society of the people living in United Kingdom represent lavishness and class where the residents consider themselves a part of aristocracy and the lifestyle choices are frequently attached with the kind of class that they belong to. Apple Inc. is an extremely well established luxurious company that has easy control over the trust and preference of these class of consumers. They refer to Apple as the most superior brand especially in the mobile phone segment and no other company has been able to beat the image that they have created in the minds of their consumers (SHTAL and et.al., 2018). Therefore, the company needs to ensure that the strategies that they have adopted in the past are complied with in future as well so that the image they have created in the society is not compromised with.

• Technological Factors:

  In terms of technological development and innovation, the company cannot be questioned since it is leading the world with its unique and highly user friendly technologies regarding the consumer electronics that the company manufactures. Similarly, the UK has a great taste and scope for the advanced technology and they themselves are very ahead in the field of technological growth. Therefore, the company does not needs to formulate separate strategy in this context since they are well ahead and established in this aspect and the goodwill that they have earned is also a huge contributor.

• Legal Factors:

  Legal compliance is a necessary part which every company must comply with and when the company is operating on a global level such as Apple, they need to ensure that while operating in different countries and economies they comply with the legal system of different economies (Khan, Alam and Alam, 2015). Therefore the regulation compliance is an important aspect and therefore, the company is familiar with the different rules to which they have to comply sine they have been trading in the economy of UK for a long time period.

• Environmental Factors:

  The Company has been long engaged in the CSR activities that they perform which are extensive and expensive and addresses different aspects at a single time. The different aspects like carbon footprints, energy exploitation, and electricity consumption are some of the added features that the company has to comply with and therefore, it is vulnerable as well to the costs that increase due to heavy electricity consumption. However, in U, the processes have remained stable and the company has earned huge goodwill in respect to the CSR activities that they perform.

SWOT ANALYSIS

• Strengths-

Apple has always been innovative in its product line and had presented hit products which is counted as the main strength of the company. It is considered as the leading company across the globe in relation to the generation of revenue. It is counted as the second largest manufacturer of the smart phone and positioned as first in US by crossing the value of 700 billion dollars. The brand value of Apple is also seen as the number 1 among all companies in the world. It provides for a unique design and the technology and is always seen as a fantastic brand name with respect to its design and features. Apple mainly has over 470 stores around the 17 countries (SammutBonnici and Galea, 2015). Along with these stores , the company sold through trade partners, retail stores and online channels. In addition to this, Apple had launched genius bar hat directly resolve for the customer issues in its retail stores. Thus, the concentration of Apple on their service and the sales distribution is been seen as legendary. The core benefit of the Apple as an organization is that it earns higher profit margins through selling of its products. Being as the technological leader with its top brand, Apple keeps for the hefty margin

• Weaknesses-

Company seems to be weak in respect of meeting with the customer expectation as people are expecting great things from the Apple as the passage of the year and in maintaining such level of expectation is tended to be a challenging task for Apple. The main issue in the Apple company relates to its products that are incompatible with the third person accessories or software. In comparison to its competitors that is Google and Microsoft, Apple is having very less number of the product range. Thus, dependency of the Apple on each and every product seems to be very high.

• Opportunities-

Apple Inc. is having an opportunity for expanding its distribution network and exploring towards the new product range. Apple company could look into more and more technological advancements by developing advanced MacBooks, Ipads, Iphones and the Iwatches. The corporation is running its business operations in the growing market and attained a high growth. This plays an important role in rising the GDP of the developing countries and by increasing the consumption of such a premium brand. Apple needs to focus on its two main products that could increases its presence worldwide aiming at future for creating a well known digital presence at the global level.

• Threats-

The company is facing high level of competition from the other brands which in turn acted as the key threat for the firm in respect of downfall in its prices and the market share. The major threat of Apple company is it faces market penetration by the other companies in the overall smartphone market (Swot analysis of Apple, 2018). In the field of Laptop also, it faces increased competition over years as Dell had also introduced for some of the beautiful models involving an Alienware model. Although Apple is the brand that is been loved by each and everyone but MacBook contains stiff competition from other competitors.

MICROECONOMICS

Microeconomics is a branch of the economics which used to defines the behaviour of individual and firms in making the different decision regarding the allocation of scarce resources and the interaction among these individual and firms. In simple words it can be said that microeconomics used to study the choice which can people can made and the different factor which used to influence the impact of decision making in company (Sakuma and et.al., 2019).

Demand and Supply

Demand:

The demand of the product generally means that the amount or the quantity of the product which consumer in the market willing to purchase on the price level on which the product of the company is being offered. It simply means that if the demand of the organizational product is high in the market then the consumer is generally liking the product of the company in the market. Price and demand is inversely related to each other in the market (Azevedo and Leshno, 2016). The reason behind the same is that when the price of the product is high in the market the demand of the product generally goes down as consumer look not to purchase the product where as when the price of the product is low the demand of the product go high as consumer look to purchase the product

Supply:

Supply of the product refers to the amount of the good available in the market to be offered to the consumer for the purpose of the consumption. Supply and Price of the product is positively related to each other (Tao and et.al., 2017). As when the price of the product used to increase producer in the market used to produce the larger amount of the product in the market so that the consumer can purchase the same. This is better understand with the help of the same diagram.(Tao and et.al., 2017)

Elasticity

Elasticity is the measurement of the change in one economic variable due to the change in the other economic variable in the market. Generally, it shows that how easy it is for the supplier and the consumer to change their behaviour and substitute the another good. The elasticity of variable has been defined in three different variable that are as follows:

Price Elasticity of demand:

It is defined as the responsiveness of the quantity of demand of the goods and services due to the change in the price of the product used to increase and decrease in the market (Guerrero-López, Unar-Munguía and Colchero, 2017). Price elasticity of the demand is also defined as a percentage change in the quantity of the demand when there is a percentage change in the price of the product. Price elasticity of demand can be calculated with the help of the following formula:

% change in quantity

% change in price

Income elasticity of demand:

Income elasticity of the demand is measured as a relation which is shared in the quantity demand of the good and services and the change in the income of the consumer in the market (Larivière, Haustein and Mongeon, 2015). Income elasticity of demand is calculated with the help of the following formulas:

Cross Elasticity of Demand:

Cross elasticity of the demand is the measurement of the relationship between the quantity demand for a good to a change in the price of the another good. (Head and Spencer, 2017). Cross Elasticity of Demand can be calculated with the help of the following formula:

% change in quantity

% change in income

Oligopoly

Oligopoly is the form of the market in which the amount of the competition in the market is very limited. As there are only few producer in the market which used to rule the market as they are the one who used to enjoy the majority of the market share and produces the homogeneous good. This is the market which used to open up the good scope of the partnership and collaboration in the market as all the organization used to produce the same and similar product in the market. There are many few new comers who used to come into the market as the entry is restricted due to the maintenance of strong network of distribution by well establish organization (Tao and et.al., 2017).

The reason behind the same is always examine that the oligopoly organization used to earn the super normal profit which help them in building the variety of the obstacles for the organization who is entering into the market. Most commonly created barrier by the company operating in the oligopoly market are used to exert the power of monopoly over the raw material, patents and many others. Some of the biggest example of the oligopoly market is the Apple iOS as company is the only organization who used to sell the phone with the iOS software in the market. Also windows and apple are the two firms which used to rule the market of the computer operating system.

Also Read -Managerial Economics With Business Strategy

LIMITATIONS OF MICROECONOMICS

Microeconomics is referred as the branch of economics which studies behavior of an individual and the company in making decisions in relation to allocation of the scarce resources and interactions among the firms and individuals. It covers exchange, prices, demand, profits, competition and the losses that arises when a person voluntarily associates them with other persons for achieving separate ends (Iossa and Martimort, 2015). In this sense, microeconomics is counted as the best thought as of the branch of the deductive logics, curves and the models are simply counted as manifestations of the such deductive insights. It reflects the ways in which the people makes decisions at the small scale level and at their individual part in terms of demand and supply decisions.

Individual analysis-

It explains only the small units of an individual of economic activity. This is considered a partial and incomplete analysis as for making the national economic assessment, aggregate output and income is required, and aggregate expenditure and the production level shows the economic level of the country. All these subjects are not been counted in microeconomics so it is been regarded as an incomplete matter.

Impractical assumptions-

Many of the models and the theories of the microeconomics are been derived on the basis of some assumptions. For instance- all the other things remains constant, full employment, rationality concept etc. On a real base scenario, it is impossible to fulfil such assumptions. In the routine activity, there are several variable factors along with the time and the changes in the variables results to the changes in behaviour of an individual which impacts a microeconomic activity. In similar way, it is impossible to be as full employment in the economy.

Wrong concept-

Microeconomics belief on the concept of the Laissez fair economy reflects that there need not be any interference in the market economy by the government (Provencher and Ramnarain, 2019). It is been stated that in the market condition or life, the government should have its interference for their smooth activities. In the event of great depression, economy had made the failure towards this concept of the Laissez-faire.

Ignores Macro-level activity-

The real economic mirror of the country are considered as income, price level, policy impact, employment, output, implementation and the foreign trade. However, microeconomic do not analyses all these subjects.

Thus, theories of microeconomics are seen as abstract and static that runs on the basis of unrealistically assumptions and analyses only the part and not an entire economic system. It couldn't explain the functioning of an economy at the large. Microeconomics misleads at the time when an individual tries for generalizing from individual behaviour and unrealistically deals with the macroeconomic system by assuming for the full employment level.

CONCLUSION

After going through the report it has been summarized that the external position of Apple is at good and the sound side as the SWOT analysis shows that the strength and the opportunities of the company is good enough to overcome the threat and weakness present for the organization. After that the report has summarized that the internal audit of the company is also in the favour of the company as PESTLE analysis shows that the company is able to survive the different factor. After that the report has summarized the Micro economics and different element of the same. In the end the report has summarized the limitation of Microeconomics in the market.To get more details about online assignment help ask our experts.

UPTO50%

Avail The Benefit Today!

To View this & another 50000+ Free Sample

Enter Email

Submit