Question
The PEST Analysis framework helps in understanding the influence of political issues like income inequality on Apple's financial performance by providing a structured way to analyze the Political, Economic, Social, and Technological factors that may impact the company. In the case of income inequality, it falls under the political category. If a government decides to increase corporate taxes to address income inequality, Apple, with its large cash reserves, could be heavily impacted. This could lead to a decrease in their financial performance. Similarly, political decisions related to international trade and manufacturing can also impact Apple's financial performance.
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Apple is a leading American technology company that has collected a large amount of cash. As of June 30, 2015, the company had $34.7 billion in the bank. This means higher corporate taxation in the United States, where income inequality has become a major political issue. Apple is heavily dependent on low-cost manufacturing in China. The risk here is that social and political unrest in China may negatively affect manufacturing or increase manufacturing costs for Apple. There has also been a discussion about limiting Chinese imports in the U.S. in an effort to support native manufacturing.
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