Question

What are two variables from P-E-S or T that you believe would drive critical strategy decisions for Apple, Inc. Explain your choices.

Answer 1

The full form of P.E.S.T. is Political, Economic, Social and Technological.

The two most critical factors among the four that would drive critical strategy decisions for Apple, Inc. are. Political and Economic factor. This can be explained as below:

Political Factor: The Apple products are manufactured in China as the manufacturing cost of manufacturing the item in China is very low as compared to that in China. The social and political unrest in China could affect the production of Apple products in China which could harm Apple to a greater extent. Also, US has been planning to restrict the import from China in order to boost the manufacturing of US. This can be a critical threat and can harm the market of Apple. Therefore, Apple must look for the alternate option in the other parts of the world where it can get its products manufactured in low cost.

Economic Factor: Low labour cost of China is a great cost advantage for Apple, but if China increases its labour wage it could harm the cost of producing some of the Apple products. Also, since more than 50 percent of Apple products are sold out of US and the increase in dollar rate i.e. the stronger the dollar becomes, can affect the business of Apple in the growing market where it has a very good share.