BUSINESS ENVIRONMENT

Business Environment

Introduction2

PESTEL Analysis of Apple Inc2

Political and Legal Factors3

Economic Factors3

Socio-Cultural Forces4

Technological Factors4

Porter's Five Forces Analysis for Apple Inc5

Threat of New Entrants5

Bargaining Power of Buyers5

Threat of Substitute Products or Services6

Bargaining Power of Suppliers6

Rivalry among Existing Firms6

Porter's Value Network Analysis for Apple Inc7

PESTEL Analysis of Tesco Plc8

Political and Legal Factors8

Economic Factors8

Socio-Cultural Forces9

Technological Factors10

Porter's Five Forces Analysis for Tesco Plc10

Threat of New Entrants10

Bargaining Power of Buyers10

Threat of Substitute Products or Services11

Bargaining Power of Suppliers11

Rivalry among Existing Firms11

Porter's Value Network analysis for Tesco Plc12

Conclusion13

References15

Business Environment

Introduction

This assignment is based on the PESTEL Analysis, Porter 5 forces and Porter's Value Network analysis of one large organization out of the manufacturing industry and one large organization out of the retail industry. I have selected the 'Apple Inc.' as a company from the manufacturing industry and 'Tesco Plc.' as a company from retail industry.

PESTEL analysis is used for describing a structure of macro-environmental factors of scanning the environmental components of the business sector. It stands for “Political, Economic, Social, Technological, Environmental, and Legal analysis”.

Porter Generic Strategy was first introduced by Michael Porter in 1980 in which approach towards competitive advantage is in a significant way. The term generically means universally applicable. According to Porter (2008), there are three generic strategies to gain or improve the competitive edge of the business over other rivals. These three generic strategies are cost leadership, differentiation and focus.

PESTEL Analysis of Apple Inc

Apple Company is known as the largest manufacturer and sellers of computer and mobile technology across the globe. Since its incorporation, company has achieved tremendous success and growth primarily because of its quality products and innovative leadership. Apple is using the differentiation strategy as it is focusing on being more innovative rather than saving the costs.

Political and Legal Factors

Apple has been the victim of political factor which have impacted on the performance of the company in the market. HTC has been sued earlier by Apple to the International Trade Commission (ITC). Likewise, apple is also sued by Samsung over the recent IPhone 5 patents rights issues. Patents rights, designs, and other rights issues were among these law suits. Apple is also seemed to have continuous serious political battles with Nokia over right issues. So, the significant political factors including import & export issues, government intervenes in the economy, labor laws, foreign exchange, tax laws, cash repatriation restrictions etc affects the operation and success of the business (William, 2006).

Apple faces legal issues in countries like China. China doesn't have perfect laws for the copied products; this problem impacts the sale of Apple's product in Chinese market.

Economic Factors

The ongoing effects of 2007 financial credit crunch have affected Apple's profits because of the rising costs in the international markets. Economic factors do affect Apple as they affect even the smallest of the country. The increasing population may signal the potential of demand; increase in GDP signals the increase in purchasing power and vice versa. So in company's success the global economic situation plays an influential ...