The relationship between business and the society is an interactive social system whereby both parties need each other, and the action of one party is likely to affect the other. For example, customers need companies to provide goods and services that meet their demands and preferences. Companies, on the other hand, needs customers to purchase their products to earn profits. Gaining profits and becoming prosperous in the society, therefore, requires business owners to build and maintain strong relationships with all their stakeholders including workers, suppliers and the customers. To main relationships of trust with the customers, for example, a business needs to produce and provide goods and services that meet their demands. Deteriorating such relationships with the main stakeholders jeopardizes the development of the business. In this paper, I will discuss the external factors that may affect the success of Apple and suggest ways in which primary stakeholders in the organization can affect its financial performance.
Apple products and services
Apple is a multinational technology organization which was founded by Ronald Wayne, Steve Jobs, and Steve Wozniak in the year 1976. Headquartered in California, United States, Apple Inc. develops and sells computer software, electronics, and other digital technologies. Some of the hardware products that the company develops include iPod, iPad, Mac computers and iPhone smartphones (Asquith & Weiss. 2016). Some of the computers software produced by the organization includes operating systems (MacOS and iOS), iTunes and the Safari web browser among others. Some of the online services provided by Apple include iCloud, Mac App Store, Apple Music and iTunes Store (Asquith & Weiss. 2016). Apple provides products and services that match the taste and preferences of its customers. As such, the company has managed to build trust and confidence with its customers and has gone beyond its competitors concerning sales of electronics and computer software. For instance, the Apple’s iPhone mobiles are efficient and durable, which is exactly what the customers need.
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Apple’s external environment
The external environment of a business comprises of the outside factors that may affect its operations and success (Ghuman & Aswathappa, 2010). The external environment can be categorized into two: microenvironment and macro environment. The micro external environment comprises of the factors that affect the operations or success of organizations directly. Some of these factors include customers, suppliers, financiers as well as perceptions of the public (Ghuman & Aswathappa, 2010). Customers, for example, affect the success of the business through their willing to purchase products and services offered by a particular company. For instance, if customers are not buying the products produced by a company, the business is likely to incur losses and eventually close down. The macro environment includes economic, political, environmental, legal, technical and socio-cultural factors that may affect the operations and the success of the business (Ghuman & Aswathappa, 2010). Economic factors that may have an impact on the operations of a company include government spending, taxes, and the supply and demand. Political factors include the government policies and regulations that govern the operations of businesses in a certain country. For instance, a rubber manufacturing company is not likely to succeed or prosper in a country whose policies and regulations do not support or allow the operation of such a business.
One of the key factors in Apple’s external environment that is likely to affect its success is competition. Although Apple is the largest producer of electronics and computer software in the world, we cannot ignore the fact that the organization faces competitions from other companies producing electronics and smartphones. Major Apple’s competitors include HTC, Samsung, Google, and Hewlett-Packard Company among others. Another key external factor that is likely to affect the success of Apple is the economic stability of the countries in which it has invested or outsourced some of its business functions. Apple has expanded its business in foreign countries in Asia like China and Korea. The rapid economic stability of such developed countries has created an opportunity for Apple to expand its businesses. More specifically, it has created an opportunity for the company to increase its revenues through the sale of computer software, mobile phones, and other electronics. In my view, the fact that Apple has expanded its business in many countries around the world is the reason why the two external factors discussed above are the most important for its success. The company has formulated strategies for addressing the issue of competition and exploiting the economic opportunities provided by foreign markets. The success and high performance of Apple can be attributed to its effectiveness in identifying and addressing the major external factors that are likely to affect its business operations (Lombardo, 2017).
Influence of primary stakeholders
A stakeholder refers to any individual with interests in a certain organization. Primary stakeholders are the people who are likely to benefit from a business activity directly. Examples primary stakeholders include creditors, shareholders, suppliers, customers and the workers. The most important stakeholders in any business are the customers and workers. Most employers hire personnel that is educated and qualified to perform the various business functions in the company. For instance, employers look for qualified IT specialists to work in the Information and Technology department in the organization. Customers, on the other hand, are important because they influence the business outcomes of a company. More specifically, the customers determine the profits that a company is likely to make from the sale of products and services. For instance, if the customers are satisfied with the products provided by the company, the business is likely to make more products sales and make huge profits.
Primary stakeholders have a high potential of influencing the financial performance of an organization. One way in which the employees at Apple can influence the company’s financial performance is through their empowerment and satisfaction in the workplace. Apple Company has created a corporate culture and on-going training programs meant to empower the workers and enhance their competence and satisfaction in the job. This is a clear indication that the company values all its employees. The employee satisfaction has, in turn, led to increased customer satisfaction, which has resulted in increased financial performance as more customers purchase Apple products. Another way in which employees can influence the financial performance of Apple is through their involvement in making strategic decisions for improving the sales of its products and services. Since the workers at Apple understand the taste and preferences of the company’s customers, they can participate in making decisions and formulating strategies of how the company can improve financially by selling more products to more customers across the world.
Customers are primary stakeholders with a critical role to play in the prosperity of a company. Customers of Apple can influence the financial performance of the company through their demand for their products. For instance, if the customer demand for iPhone mobiles let’s say in China, is high, the company will sell more of this product in the foreign country and make huge profits. On the flipside, the financial performance of the company is likely to deteriorate if the customer demand for smartphones in China is low.
Other important stakeholders whose roles are critical to the success of the company include partners and the board of directors. Partners can influence the financial performance of Apple through the production of specialized products. For instance, Apple can partner with an entrepreneurial company to create a specialized product that meets the needs of the customers. In this case, Apple can provide capital, product development, and manufacturing capabilities while the small company may provide technical support for developing the proposed product. Apple can then allocate a reasonable price to this product and sell it to many customers to make profits, hence improve its financial performance. The board of directors can improve the financial performance of Apple by establishing objectives and formulating strategies for improving the sales and distribution of the company’s products.
Controversial corporate social responsibility issue
One controversial CSR issue linked to Apple is the issue of workers at Foxconn Technology Groups, a firm that assembles Apple products like iPhones. A report from Forbes indicates that the working conditions for workers at the firm are poor and that most workers are underpaid. The living quarters of the workers are not clean, and their bed sheets and closets are dirty. The issue also involves the case of teachers forcing student interns to work at the firm for longer hours than usual (Adams, 2012).
References
Asquith, P., & Weiss, L. A. (2016). Lessons in corporate finance: A case studies approach to financial tools, financial policies, and valuation .
Adams, S. (2012, September 12). Apple's New Foxconn Embarrassment. Retrieved from https://www.forbes.com/sites/susanadams/2012/09/12/apples-new-foxconn- embarrassment/#541a8d5cd479
Ghuman, K., & Aswathappa, K. (2010). Management: Concept, practice and cases . New Delhi: Tata McGraw Hill .
Lombardo, J. (2017, January 29). Apple Inc. PESTEL/PESTLE Analysis & Recommendations. Retrieved from http://panmore.com/apple-inc-pestel-pestle-analysis-recommendations
