Short Discourse — Evaluating the macro-environment of Apple Inc.
Using Economic and Sociocultural dimensions of the PESTEL framework
The focus of this discussion is one of Apple’s products — the Apple Watch. The Apple Watch is a consumer product that helps its end users live healthier lifestyles. The supply chain process involves research and development, manufacturing, logistics — supply to retailers, and finally the consumer. The basis of this discussion will be understanding the possible opportunities and threats that affect the retailing arm of the product in the Nigerian market.
The PESTEL framework is a strategic analysis tool that assesses the business environment in which a company operates. This discussion will be focusing on the economic and socio-cultural dimensions, this is because these dimensions largely contribute to the success of products in the Nigerian market.
Let us begin with the economic dimension, this dimension is relevant because it helps to measure elements such as exchange rate, availability of credit, level of disposable income, etc. These elements are used to examine the product pricing of the Apple Watch, the rate of demand, etc. The current exchange rate for a dollar is about 415.12 naira and the black market rate is about 590 naira. The ever-fluctuating exchange rates have been known to affect the volume of Apple Watches that retailers order, this can be caused mainly by a lack of adequate capital against the exchange rate. The exchange rate also affects the rate of demand for these watches, on the retailer and the consumer end. In most cases, demand reduces because the price of the watches continually increases.
Also, we can also look at the availability of credit and the level of disposable income. In Nigeria, there are no standard credit systems for the purchase of these watches that are already considered expensive due to the exchange rate. The watches are mostly bought in cash upfront, which affects the buying or purchasing power of the end-users and also the retailers if they do not have access to good credit systems or do not have disposable income.
The socio-cultural dimension of the PESTEL analysis focuses more on the target customers and their demographics, this dimension helps us examine the potential size of the market. For this specific case, we will be looking at the following socio-cultural factors; wealth distribution, lifestyles, and health consciousness. The higher the income of the target customers, the higher the purchases, because as general income increases, product demand also increases. The well-being of the target end-users is almost always dependent on the amount of wealth currently available and accessible to them, they will only perform specific buying actions if they are medium to high-earning individuals, which directly affects the rate of demand. Lifestyle and health consciousness can also affect the behavior and determine the choices of the target customers in their demand for Apple watches.
In recent years there has been a global rise in the acceptance of healthy lifestyles and being health-conscious, people generally want to live healthier these days. On the other hand, if these target users do not care about tracking important health vitals or staying fit, they may not see the need to purchase an Apple Watch. This in turn affects the potential group of people who will be interested in this product.