Apple Economic Recession and Company Analysis

Apple Brief Historical Overview

Apple Inc. is a renowned technological firm whose products and services are admired globally. The company’s headquarters is based in California. The firm deals in technological gadgets such as iPods, iPhones, Personal Computers, smart speakers, and smartwatch among other technologies. Besides technological gadgets, it also provides online services and computer software. Steve Wozniak, Steve Jobs, and Ronald Wayne founded the company in the year 1976. Since then, it has gone through several periods of economic recessions and growth. It has since then grown from the production of a single product, Apple I PC, to several products listed above. Today Apple is the largest IT Company and the second, after Samsung, manufacture of Mobile phones. This elevated position occupied by Apple imposes great demands on the CEO and the management generally to improve their competitiveness and keep track of the economic patterns regarding recession and growth.

Apple is not the only producer of technologies and online service providers. Other competitors in the market include Samsung, Nokia, Microsoft Inc., Erickson, Sony, and other worthy competitors. Having numerous competitors in the market and the fluctuation of the market pricing, and other limiting factors resulting from financial recessions affects the performance of business institutions and in this case the performance of the giant Apple Inc.

There is an intricate link between the customers, governments, banks, and technology firms like apple. While the firms produce technologies, they need the consumers. The consumers, on the other hand, need the firms and the government to protect them, which is also true for the firms who need protection in foreign lands. The government also obtains tax from the technological firms thereby making a perfect web of needs. The following study reviews the impact of economic recession on Apple and its competitors. It also shows how recession and growth affect consumers, governments, lending institutions and business corporations and how all these elements interact in the real world in shaping each other.

Economic Environments

            The economy can be understood to mean the present state of a nation or an economic block in terms of the production and consumption of both services and goods (BTEC Business 1). Economies are complex in nature and fluctuate constantly. The fluctuations in the economy are often characterized by recessions and economic growths (BTEC Business 1).  Other factors such as competition also affect the economy.

Apple and competitors have little control over the patterns of the economy as a conglomeration of factors such as politics among others influences economic patterns. However, when these periods set it, Apple and its counterparts are hit by a recession and rejuvenated by economic growth. The only factor where the firms have higher control is the competition aspect. The respective firms determine the level of Competition of each firm. To remain afloat, the firms will have to rethink and reevaluate their marketing strategies, target consumers, and pricing. The firms control of this area and would outdo each other based on the offer packages to the consumers. Therefore, economic recession and growth have a direct impact on competition; it is a motivator or an inhibitor of meaningful competition.

Graphical presentation of economic recession and growth

Economic recession and growth can be presented in a graphical format as presented in the diagram below (BTEC Business 1):

Figure 1 A graphical representation of economic recession and growth

According to the graphical presentation, during the peak seasons, businesses are booming making profits. After the peak season, the curve begins to fall due to a recession and enters the trough phase, which is the lowest point in an economy. These hard times may last shorter or longer depending on the impact of a recession and the economy soon begins to recover back to the peak season.

During the peak season, apple and other companies are at their highest sale. Competition is not stiff; banks offer more loans to empowering consumers purchasing ability. The graph indicates that the process of drift from the peak to the trough period is gradual which means as either of the seasons is setting in it can be predicted and necessary measures are taken to cushion the corporations from falling. The graphs also illustrate an interchanging pattern between recession and peak periods, which make this periods common expected event.

As soon as the peak season vanishes the low seasons represented by the trough sets in characterized by low profit and stiff competition. These two periods, therefore, informs the business decisions and strategies adopted by multibillionaire organizations such as apple.

Economic Recession and Economic Growth

  1. Economic Recession

Money is a driving factor of all economies today. It availability determines the progress of firms such as apple and other technology developers and service providers. As a commodity, money can be scarce leading to the scarcity of other products and services as well that depend on its availability.

Economic recession refers to the economic period when the economy shrinks (BTEC Business 2). The shrinking of the economy will ultimately have an impact on several institutions such as the banks, governments, households, and businesses.

During economic recessions, the banks give or allow a limited amount of loans; generally, demand for loans reduces. Households are largely affected by recessions and these are manifested in reduced consumer confidence, less expenditure, and increased savings. Businesses will be affected by the reduced demands for goods and services and will begin to make losses, minimize investments, and retrench some of the employees in an effort to save (BTEC Business 2-4).

Impact of Economic Recession on Apple

As noted earlier, Apple has several competitors striving for the world market. An economic recession will affect the performance of Apple in several ways. To begin with, the market prices and the quality of technologies produced by Apple and its competitors vary. The technology produced by Apple is quite advanced as compared to the other competitors and this influences its pricing setting it quite higher than those of the competitors. As noted, one of the behavior patterns made by households, who are the consumers during the economic recession, is that they reduce expenditure and tend to save as their consumer confidence is toned down. The consumers who need a technology will go for a cheaper version as long as it can satisfy the needs. This will imply that Apple will lose its clients to other competitors who are offering a cheaper version of the same products offered by Apple unless it modifies its prices and technology to offer a cheaper version. During such high competition, Apple may also be obliged to spend more on advertisement to influence the consumer’s opinion or compelled to do so to compete favorably with its competitors who are making more profit and advertising more to win apple’s consumers.

 Another factor that will influence consumer’s ability to purchase is the low amount of loans offered by the banks during a recession. Apple customers or potential buyers relying on loans will not be able to purchase their products due to insufficient finance.

Apple is not an independent entity; it has an impact on the community in terms of offering employment to members of the society. During the financial recession, apple just as other companies will lay off some of the employees considered redundant to cut off expenditure or replace them on a permanent basis with employees who can offer better packages in terms of skills and experience.

  • Economic growth

Economic growth or the boom period is the happiest period for the businesses and the consumers as well as the government. During this period the banks offer more loans and credits, the government collects sufficient tax, the businesses hire more employees, invests more and are able to sell and most importantly, the consumers’ purchasing power increases. The factor that stimulates all these activities is the presence of sufficient money flowing in the market.

Impact of Economic Growth on Apple

During economic growth, the clients purchase power increases as many people have money to be spent on other luxuries after basic expenditure. The level of competition during this phase of the economy is not heightened as during economic recessions. Customers are more willing to buy and therefore do not require frequent advertisements and promotions as compared to periods of economic recessions. Besides, prices are not impacted negatively but the technology companies can freely set prices, which will not be felt by the consumers. During this phases competition reduces and customers tend to purchase along with their line of the favorite company and therefore the quality of the products and services will determine the number of sales done by each company. It is therefore just to conclude that during this phase of economic growth, Apple will not face major competition, as it is the leading technology creator. It is also important to note that during this period, Apple will hire more employees in order to meet the increasing market demand and increasing sales thereby developing the society in a remarkable way (BTEC Business 7).


Competition can be understood to mean meaningful rivalry between or among companies that offer related services or products (BTEC Business 4). The competition presents a threat to the business but to the consumer, it offers benefits such as availability of options to choose from, influence on prices and quality of products and services (BTEC Business 6). The market enjoyed by Apple and its counterparts is an oligopolistic market in the sense that the products are branded and have little difference (BTEC Business 5).

Apple has several competitors who influence the pricing, hiring, advertisement, and sales done by Apple. The market is very competitive as Apple is competing with other corporations that offer cheaper products serving similar purposes as Apple products. This means that Apple will have to do more advertisements, hire, and train its employees to improve their skills, tailor its prices to range close to those of its counterparts, and improve its technology to be the best in the market. This level of competition is favorable for the consumers who can always go for the cheaper options especially during economic recessions. Therefore, it protects the consumers from exploitation through exorbitant pricing from a leading technology such as Apple Inc.

The Role of Government in Regulating Competition

Governments are important in the regulation of business activities especially during a competition to ensure that competition is fair (BTEC Business 4-5). Apple has branches in other countries like China where its technologies are produced. These countries have laws set by governments to regulate the conduction of business either foreign or local businesses (BTEC Business 4-5). Regulation of businesses is done through licensing, taxation, and establishment of protocols that require compulsory compliance (BTEC Business 4-5). When left alone to decide to price goods and services, businesses tend to exploit consumers by setting unrealistic values. Large companies prefer setting branches and affiliate companies in third world countries where labor is cheap and regulations are less stringent. Governments take care of these are forms of exploitation.

When competition is stiff and companies lay off employees, the few employees can be exploited unjustly in order for the firm to achieve its goals in terms of sales. This action may have two implications for the company in its both sales and public image. Exploitation of a few workers will reduce expenditure and finally save money that would have been spent to pay workers working less, nonetheless, when the workers are exploited extremely and an accident or some forms of revelation happens to expose the firm’s practices; the firm may lose its customers or license to operate the business. Exploitation of workers in any form and degree is unethical and unacceptable. This menace has affected corporations such as Nike in Indonesia and Apple in India where workers complained about unethical working conditions, pay, and environment.

Linking Economic Recessions and Growth, Technology Firms, Consumers and Government

As stated in the introduction, the purpose of this paper in illustrating the link between economic recessions and growth, technology firms, consumers and governments is clearly discussed. All the three entities are interconnected with the activities of one affecting the other in a multidirectional way. This is to mean that one entity can affect more than one entity. For example, when Apple manufactures a technology, the technology will inspire the customers to purchase it, the competitors to take note and reinvent their designs and the government will obtain taxes from the activities. Here we see Apple affecting the consumer, competitor, and the government. In addition, the consumer choice affects more than one entity. When a consumer purchases an item from Apple, he will increase the sales and revenue of apple. These will increases taxes collected by the government and motivate the competitors to redefine their marketing strategies such as advertisements to obtain or take customers who are traditionally known to be Apple’s clients. This is true for all the other entities. The only factor that is independent but influences the technology firms, government, and consumers is the state of the economy.


Understanding economic recessions and growth is inevitable for a giant corporation like Apple, as this will enable it to balance its pricing, employee hiring, and retention, planning of advertisements and promotions and technological designs and retention rate. Market Competition, on the other hand, is good for the business as it inspires innovation. Moreover, active competition will be beneficial to the consumer as it necessitates the production of varieties of the same products from which consumers can choose: it, therefore, means that economic innovations are best made during competition. In addition, competition helps to regulate pricing by ensuring that not one producer exploits the consumers. However slight the difference may be between an Apple product and a Samsung product, were it not for branding consumers would not be able to point out a significant difference. Players in The technology market tend to mimic each other and these may confuse the consumers on the choice of the best gadget. Economic recession periods are characterized by lower expenditure on the part of the consumers. Such inconveniences are better solved by the government, which imposes restrictions on participants in the oligopolistic market. Businesses make low investments and tend to retrench part of the employee to cut the budget on employee payments. Competition becomes stiff as businesses compete to make maximum profit. Such economic times should inform businesses to make good use of peak seasons and collect as much profit as possible for the hard times in case an economic crisis hits.

Works Cited

BTEC Business: Unit 1 The Business Environment- Task 4 (P5)(M2) Notes