Bcb

1. General and Industry Environments

Pick up from the case only specific examples to include under general environment and

Porter Five Forces

Regarding the general external environment, Apple must consider the political/legal,

economic and global, sociocultural and demographic, and technological forces that

might affect the ability of the firm to get its product to market and sustain sales.

Demographic: Certainly the demographics had changed. Baby-boomers were getting

older, while the youngest generation was much more "wired".

Sociocultural: Customers were growing increasingly sophisticated. They knew what they

wanted and didn't want to pay a lot for it, but could be seduced by a "sexy" design.

Increasing globalization meant borders didn't matter so much any more – American

products did not have any particular edge. As long as products were high performance

and high service, the customer didn't know or care where they came from.

Technological: Technology, especially the growth of the Internet, had created new

opportunities for delivery of content and for promotion. Companies like Intel and

Samsung were making many advances in memory and display technology. The pace

and direction of change required considerable monitoring and possibly risk-taking.

Political-Legal: Political-legal issues, especially the issues around copyrights, monitoring

of content distribution (digital rights management), environmental waste, and the

possibility of global trade monopolies. U.S. regulators from Federal Trade Commission,

Securities and Exchange Commission continued scrutiny of trade and stockholder

issues.

General Observation:

Based on the external environmental factor analysis, the consumer electronics business

has