Exploring the Six Components of Apple's Macro-Environment

“Always be prepared,” so the boy scout’s motto goes, but always being prepared for the curve balls thrown by the macro-environment is not as easy as it might sound. The macro-environment is made up of “six principal components: political factors, economic conditions in the firm’s general environment (local, country, regional, worldwide), sociocultural forces, technological factors, environmental factors (concerning the natural environment), and legal/regulatory conditions” (Thompson 2016). Every business or company out there, including Apple, must prepare for, as much as possible, and respond to the pressure of the six components of the macro-environment.

Recently Apple has experienced an interesting rift in the political climate in a case against the FBI. “As the debate between the FBI and Apple rages on over the unlocking of a terrorist's iPhone, many in the government have provided their viewpoints on the issue, and now at long last, so too has President Obama” (Kerner 2016). It really would seem that Apple would have done anything in their power to aid in the effort of helping uncover any information that may have given insight into the terrorism incident. Would this not fall under the category of being an exception to their core value of privacy? It would seem that Tim Cook may have unwisely overreacted by turning this issue into a constitutional one when in reality, it was not in the least. “… The company is taking on a posture as the great protector of everyone's rights when it claims that its refusal to help the FBI extract information from an iPhone used by a terrorist is really a First Amendment issue” (Rash 2016). In the future, Apple should consider not overreacting as much in order to maintain a calmer political climate. The safety of individual’s rights is important and not to be discredited. However, the safety and rights of an entire country is much more important.

Despite some fluctuations in the last couple of years, Apple stock appears to be doing well, “Tech stocks with 1 percent gain soared the highest amongst the ten S&P 500 sectors. Among the tech majors, Apple was up over 3 percent...” (Agarwal 2016). Another important economic condition to take note of is the changes brought on by our new president. “Next comes the Trump bump, as the President-elect has been talking about lowering taxes on corporations overall and on cash U.S. companies have stashed overseas. Cutting the corporate rate to 15 percent from the current 35 percent level could boost Apple's earnings per share (EPS) by 6 percent” (Pressman 2016). If corporation taxes do, in fact, end up being lowered as promised by Trump, then this could certainly prove to be highly beneficial for companies such as Apple.

Sociocultural forces include changes and differences in the emerging generations. The millennial generation currently makes up the majority of the workforce. Millennial's and post-millennial are more technically savvy than any of the older generations combined; this bids well for companies such as Apple and the demand for their products. Not only do Apple products appeal to the younger generations because of their lifestyles, but technology is becoming more and more ingrained in every type of career and the industries in which they are categorized. “As technology continues to become more prevalent in all areas of the job market, higher education institutions also place a heavy emphasis on incorporating technological skills into curricula and classroom delivery” (Gibson 2014). Technology is more prevalent in education, the workforce, and for recreational use more than ever before. It would then seem that most of the societal values, attitudes, and lifestyles that make up the sociocultural forces are all in favor of aiding in the continuous success of Apple.

Quite frankly, Apple has proven throughout its existence that it sets the pace when it comes to trends in technological factors and advances. Apple is one of the most innovative companies in the world and their reputation has been apparent for some time now. “The Boston Consulting Group ranks Apple as the world's most innovative company in a report it issued last week. Apple has topped BCG's list of 50 companies every year since 2005 when it inaugurated the ranking” (Adams 2015). The company has always had topnotch employees who are constantly coming up with new ideas such as the delivery of the drone industry. “Drones and indoor mapping may offer Apple an inroad to augmented-reality technology” (Gurman 2016). Apple almost possesses this weird psychic kind of mentality where it has the ability to not only foresee the future of technological advances, but they know how to manipulate those advances to the best of their advantage in the market.

In the past, Apple has apparently not received the best reputation in regards to environmental issues. “Despite Apple's big push last year on environmental issues, it seems that the green community still isn't impressed” (Moren 2008). In more recent years, Apple has taken some greater efforts at helping preserve the planet’s limited resources by using solar panels and by trying to reduce their impact on climate change. “Apple's carbon footprint for energy usage declined 31 percent from fiscal 2011 to fiscal 2013, even as its overall power consumption increased 42 percent. And half the vehicles in Apple's corporate fleet are hybrids” (Moren 2014). The industry that Apple is a part of certainly has some interesting challenges in regards to initiatives to be more "green" and environmentally friendly. Clearly, Apple has made good progress in this area in the last couple of years, although there is surely plenty of room for even more improvement in the future.

Though there is a wide array of subcategories which may fall under the legal and regulatory factors, one interesting one that Apple encountered in the state of California had to do with a dispute about how “the state’s Apple Store workers remain under their boss' control during their time waiting for security checks” (Eidelson 2015). This case was important for Apple to address appropriately because it had to do with labor laws. Any legal and regulatory factors are extremely important for companies to address and pay close attention to because otherwise, it could blow up in the media and result in bad public relations or news coverage.

In conclusion, Apple proves that it is capable of responding to all six elements of the macro-environment and in some ways showing shrewd preparation strategies as well. Though Apple has had some rocky political issues (addressing the FBI case), the company has a promising economic future, an overall positive sociocultural attitude, an impressive technological leader in their industry, has some challenging environmental concerns, and has a wide array of legal/regulatory factors to keep close tabs on.

References

Adams, S. (2015). Is Apple The World's Most Innovative Company?. Forbes.Com, 22.

Agarwal, S. (2016). Stocks Jump Amid Lackluster Economic Data, Apple Soars 3%. Forbes.Com, 1.

Eidelson, J. (2015). Apple Store Workers Take Up the Wage Fight. Bloomberg Businessweek, (4410), 34-35.

Gibson, L. A., & Sodeman, W. A. (2014). Millennials and Technology: Addressing the Communication Gap in Education and Practice. Organization Development Journal, 32(4), 63-75.

Gurman, M., & Levin, A. (2016). Apple Is Bringing Drones to a Map Fight. Bloomberg Businessweek, (4503), 29-30.

Michael Kerner, S. (2016). Obama Offers Warnings on Encryption at SXSW. Eweek, 9.

Moren, D. (2008). Apple Dinged on the Environment Again. Macworld, 25(8), 26.

Moren, D. (2014). Apple Updates Environmental Progress for 2014. Macworld, 31(11), 11.

Pressman, A. (2016). Here Are 5 Reasons Why Apple's Stock Might Rise in 2017. Fortune.Com, 1.

Rash, W. (2016). Apple-FBI Wrangle Over Unlocking iPhone Strays Into Political Polemic. Eweek, 1.

Thompson, A., Peteraf, M., Gamble, J., & Strickland, A.J. (2016) Crafting and executing Strategy. The quest for competitive advantage.( Twentieth edition). New York, NY: McGraw Hill