Business Economic Analysis of Apple Inc.

A BUSINESS REPORT OF BUSINESS ORGANISATIONS
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Introduction
Apple is an American technology company that designs, produces, and sells consumer electronics, computer software, and online services. The firm ranks as the second-largest mobile phone producer, the largest information technology company, and the third-largest in mobile device shipment volume worldwide. It maintained about 496 stores in 24 countries by 2020 and had 1.5 billion Apple devices in use worldwide. Regarding apple's revenue for the last decade, the company's revenue was $275 billion, doubling its income in the year 2010, which was $108.249 billion (Statista, 2022).
Social Forces that Shape Apple's inc. Products Demand
Apple Inc. is a corporation that operates in an oligopoly market structure where there are a limited number of firms holding the majority of the market share. Social factors such as consumer behaviour, lifestyle changes, shifts in cultural trends, and demographic affect the demand for its products. The consumer is the primary demand driver for most of Apple's goods. Customers perceive the company's products as a status symbol. Therefore, they are always willing to pay a premium for them, increasing the demand for the firm's goods. According to Veblen and GALBRAITH (1973), individuals of lower social status feel they are of high class when they buy goods associated with wealthy people.
In addition, Apple has built itself a vibrant brand that associates with innovation and quality, leading to a loyal customer base. The social change in demographics also affects Demand for Apple's products. A general shift in the population towards the young generation leads to increased demand for the company's products. This is because the group is always receptive to new technology. Veblen (2005) argues that the rules that govern what is standard, good, right, accurate, and beautiful vary across ages in response to changing conditions of life. Lifestyle shifts also influence the demand for a particular product. Thus, the number of individuals working from home can increase the demand for Apple laptops because they enable remote working.
A shift in cultural trends can also affect the demand for goods. For instance, there is a move from conventional forms of entertainment like television towards digital varieties like streaming. The social change could increase demand for the company's products like Apple T.V.
Apple employs strategies, such as social positioning, planned obsolescence, and want creation techniques, to increase its product demand. Social positioning involves influencing the perception of products in the market. Apple's items are often positioned as being high-quality and innovative. Therefore, this increases the demand for its products as people can get a complete user experience from quality creations. On the other hand, planned obsolescence entails practices that ensure the product design leads to the item becoming outdated within a particular time frame. Veblen (1904) argues that businesses are motivated by profit and will engage in activities that increase their profits even if those activities that harm society. Therefore, creating artificial obsolescence leads to purchasing new products, increasing the demand for the company's goods. Apple has been accused of staging obsolescence to make its products outdated so that consumers will have to buy new ones (Forbes, 2022).
Firms also increase demand through want creation, which triggers a desire for new products. Thus, Apple is best at employing various approaches to develop a passion for its products, leading to increased demand in the market. The company majors less in attracting new customers through discounted prices and more on cementing their loyalty to its products via good customer service.
Additionally, Apple mostly announces the release of its products and does not engage in intensive marketing. In the process, it ensures all market locations, whether a retail store, website or AppStore give a reliable Apple experience. Thus, the availability of Apple products and the after-sales service and support available for these products can be seen as influencing people's decision to purchase Apple products.
Analysis of the Market Forces that Shape the Demand for Apple's Products
There are many forces in the market where Apple Inc. operates. The company must deal with competition, the availability of substitutes, barriers or threats to entry, market concentration, and the extent of differentiation affecting demand for its products. Regarding the number of competitors, there are several rivals in the market, the most notable being Samsung, Microsoft, and Google. Therefore, the market is consolidated, and the loss of one firm benefits the other. Given few formidable competitors, the company can use an already established brand and strong customer base to remain competitive. Doing so will increase its product demand. However, it must continue innovating to differentiate its products as it maintains customer service.
Apple Inc. must also deal with the issue of substitute availability. Such items do not necessarily mean the same product offered by competitors but rather goods that satisfy similar needs (Lewbel and Nesheim, 2019). Multiple items in the market serve the same purpose as those provided by Apple, like the application of digital cameras to take photos. However, the existing substitutes have poor features compared to those offered by Apple. Therefore, Apple has a chance of maintaining and increasing demand for its products. Consumers would instead buy its products due to their convenience and quality functions than seek alternatives (Lewbel and Nesheim, 2019). Generally, the threat of substitutes for the company is low. People can use their phones to take quality pictures than digital cameras and other smartphones.
The company has to face a threat or barrier to entry while operating in the market. The threat of new entrants relies on the availability of obstacles to the market and the ability of incumbent firms to react to newcomers (Porter, 2008). The possibility of new firms making their way into the market that Apple operates remains minimal. The barrier to entry is relatively high because the cost of starting a new technology company that equals Apple's brand and the quality of goods is high. According to Porter (2008), Demand-related benefits of scale by big companies present difficulty for potential new firms to establish themselves in the market. They reduce customers' enthusiasm to purchase the latter's products. Thus, new companies must build a commendable customer base to realise meaningful profits, making Apple maintain demand size for its products.
The market concentration for Apple Inc. has increased over the years. The primary reason behind the situation, among various factors, entails the growing popularity of its major brands like the iPhone and the iPad, Apple Watch, and the App Store (Vinokurova, 2019). Consequently, Apple Inc. has increased its market share in the electronic devices industry due to increased market concentration. This has made it dominant in the sector (Im et al., 2019). Therefore, Apple Inc. has increased the demand for its product because consumers prefer to associate with and buy from market leaders.
There is a high level of product differentiation in the market in which Apple operates. This is because the company offers a unique combination of hardware, softwar...