Demographical Factors of Uk

Demographic Factors
In the early days of consumer electronics, computers and telecommunication developed as separate, distinct industries. Digitization changed the rules of the game, demolishing walls, blurring the distinction between once separate industries and building a $ 300 billion industry. Changes are driven by wide spread internet usage, “on the go” life styles, cutting edge innovation and digital convergence. This multibillion Industry is run by key players such as Apple, Sony, Dell, RIM, Samsung & LG.
Apple Inc., is an American multinational company that designs and manufactures computer software such as Mac OS x, iTunes and electronic products such as iPhone, iPad and iPods for the consumer market. Apple operates a chain of retail stores, providing goods and services from 35 locations in the UK with 355 employees.
Business Environment
It is strategically important for Apple Inc. to analyse their ‘business environment’ in order to gain competitive intelligence and market superiority. “Business” refers here to the internal activities or internal environment of Apple, performed by people in order to make profit (production, extraction or purchase or sales of goods). The internal/micro environment of an organisation is affected by five controllable factors, Man, Money, Machinery, Material, and Management.
On the other hand the word ‘Environment’ refers to the external aspects of surrounds the business. External/ Macro environment consists of factors (such as tax changes, new laws, trade barriers, demographic change and government policy changes) which are beyond the control of the organisation and create opportunities and threats to business units.
PESTEL
Tremendously complex and dynamic external environments can be analysed by looking at the PESTEL factors. By understanding the changes of Political, Economical, Socio-Cultural, Technological, Environmental and Legal factors organisations can take advantage of the opportunities and minimize the threats.
Socio- cultural
When making strategic decisions, one of the key areas Apple should analyse is the people and groups of people, in the respective geographical area that the business operates and their affect on the business both as consumers and employees. These socio-cultural factors can be mainly divided into two segments: “Cultural changes” (such as values, attributes, manners, customs, languages and educational levels of the population of the United Kingdom) and “Demographical changes”. Demographical factors are socioeconomic characteristics of the population of the UK expressed statistically (age, gender, size of population and ethnicity)
Recent and Predicted Demographical changes in the United Kingdom Size of Population in the United Kingdom
The Office for National Statistics reports the net population of the United Kingdom as follows. The emigration trend of the early 19th century saw the net population drop to 37 million and the world war increased UK’s population to 49 million.
The UK net population increased by 20% by 2000 CE, escalating it to 58.6 million. Since early 1990 UK population has been on a steady growth due to natural change (Birth rate – Death rate) and Net Migration (Emigration – Immigration).
Natural change' has been the main driver of growth for the last three years (2007-10), narrowly overtaking net migration, (the dominant factor for the previous nine years), in 2011 accounted for 52% of the population growth. The increase was driven by the baby boom as fertility rates reached their highest since mid 1990’s. Total fertility rate increased to 1.96 from 1.04 in the year 2004 and is predicted to reach as high as 2.14 by the year 2015. A dramatic fall in the Death rate means higher life expectancy of the UK population increasing from 71 in late 1990 to 80 years (78 years for a male and 82 years for a female).
Age Distribution of the UK population The UK census report of 2011 by ONS showed people joining the work force as 13% of the population, whereas people leaving the workforce were almost 16%. The age distribution indicates more people reaching retirement age in the next 25 years than joining the workforce.
Gender
The census also shows the gender ratio of UK population is 0.93: with the female population of the UK being greater than the male. But the gender ratio of the UK workforce is very close to 1. This illustrates that the male and female work forces contribute equally to the economy of the United Kingdom.
Income level
In terms of global poverty criteria, the United Kingdom is a wealthy country, with virtually no-one living on less than £4 a day and the estimated average income per individual is £26,000. There is both significant income redistribution and income inequality. Although the national minimum wage was raised by the UK government linked to inflation rates, low income threshold is 60% of the median income. This means regardless of the average income more than half of the UK population are feeling the squeeze of recession, with less money to spend due to pay freezes, redundancies and inflation.
Occupation
The UK work force is made up of 58% of the entire population and due to the latest world economic crisis the unemployment rate of UK rose 8% by the end of 2011.
The recession has pushed organisations to cut down jobs and employ more part time workers than full time permanent staff.
The occupations of the UK work force have shifted gradually over the years. The Service sector has grown by 20% whilst the industry sector has declined almost by 20%. Fewer jobs in the industrial sector show the increase of white collar workers over blue collar workers.
Race / Ethnicity

The chart shows the diversity of the UK population in the 2011 census. The overwhelming majority of the UK population are British white and 16% of the population are from other ethnic groups, which can be categorised into four segments: Asian or Asian British, Mixed race, Chinese and Black or British Black. (31 Min)

A) How these Demographic changes affect Apple Inc
Due to shift in the natural change and immigration the net UK population has been gradually increasing. With the current number of outlets, staff and virtual space Apple will not be able to cater for the demand of the UK’s growing population.
Immigration brings people from different ethnic groups and countries that will contribute massively to the popularity of Apple in their respective countries. Countries such as Sri Lanka, Taiwan and India where Apple does not have a direct presence are highly influenced by these immigrants. The current coalition government’s plan of cutting down immigration numbers in the UK from hundreds of thousands to tens of thousands will affect Apple’s popularity negatively.
Higher life expectancy means more elderly people in the consumer markets. Apple will have to invent or redesign their product portfolio in order to cater for the elderly.
Age distribution among the population of the UK shows that 2/3 of Generation Y (28.5% of the population) is growing older and joining Generation X in the next 10 years. This Gap is filled by the 18- 24 group (20% of the population). Even though late generation Y people are currently technocrats this will reduce as they age. Recent studies by the Harvard business school show over 90% of people over 45 tend to close their eyes to new technology feeling it is complicated and out of their league. This population group (almost 1/3 of the UK population) are Apple’s prime consumers. If these people shut their eyes to future upgrades of Apple: revenue could fall dramatically.
The UK’s aging population also has a major effect on Apple’s workforce: recent studies revealed that 39% of the Apple UK workforce will be in this category. Apple will face replacing them and supporting an aging workforce. Moreover aging can mean being less efficient, thus potentially reducing Apple’s productivity.

A balanced gender ratio in the UK means that Apple has to manufacture products to cater for both sexes. Additionally, Equal Opportunities in UK employment law require Apple to treat male and female applicants and employees with parity or face unpopularity or even legal proceedings.
Whilst the annual estimated average household income is £33,000, 60% of the UK households earn below this. Significant income inequality & squeeze by the financial crisis gives people less purchasing power. Prioritising physiological and safety needs (food, shelter, and health) rather than self-actualisation needs, (purchasing i-Pads and iPhones) reduces spending power and alters spending patterns thus affecting future sales of Apple UK.

UK’s 80% of the service sector will need new world technological innovations to bring their service gap to “0”. This will generate both future opportunities and threats for Apple. If Apple can capitalize this market they can sustain the core competency by being the market leader but if one of Apple’s rivals introduces more innovative products, it will be the downfall of the Apple business.
1/3 of the Apple workforce is part timers. Part- timers experiencing lack of motivation or insecurity can be unproductive. Lack of productivity from their staff can significantly affect their business activities.

Apple UK caters for and operates in a multicultural, multi- ethnic society. Ethnic groups have different needs, customs and values; plus they speak many languages. If Apple do not manufacture products and provide services to accommodate them, they will refuse to buy Apple products and services. Apple must also respect the diversity of their UK workforce and ensure no discrimination exists. Managing a diverse workforce means considering many different issues and resolving them ethically. If Apple fails to promote and establish equality they will lose productivity and face legal proceedings.
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B) How Apple has faced these Demographical Changes Effectively
Equal opportunities must be given to everyone irrespective of demographic factors. Apple has defined their code of ethics by considering these demographic factors in order to eradicate discrimination and cater for the entire United Kingdom.
Responding to the rising population, Apple has expanded their presence from 28 retail stores in 2008 to 35 by the end of 2011, intending to increase to 50 by 2015. Expanding the virtual space of their website so more people can efficiently visit their site, Apple has encouraged online ordering by providing all the services online that they provide in stores plus some exclusive deals.
To counter the demise of volunteer brand promoting immigrants, Apple has utilised a global marketing campaign to bring the message of Apple to the countries where Apple Inc has no presence. Designing products to cater for all demographical segments of the UK consumer markets, attracting the eco boomers and aging generation, Apple has reengineered their product portfolio promoting greater simplicity and relevance. Rather than sitting at a desk and a chair with a bad back, Apple products attract the aging population of UK by giving them freedom of movement.
The iPhone and iPad have revolutionised the way computers and phones are used by the UK consumers. Rather than complicated menus these gadgets attract the UK’s aging population by providing everything they need in two clicks and without requiring connection to a PC to sync the data. The sleek design and light weight means consumers can use them anywhere. By promoting simplicity and addressing the needs of the each demographic segment Apple has won the heart of the UK population.
Apple’s creative style of executing their retail business, enabling people to walk in to their stores and learn about their products even before they purchase them, has further attracted all demographic groups in the UK.
Introducing more than 1 million “Apps” in the App store Apple has addressed the needs of all: The aging population market has been penetrated with Apps such as Newsstand and Boots, the Working class with Apps of Supermarkets and Departmental stores, women with Fashion Apps whilst Apps such as weather, sports, events, business and education appeal to all. Making the complex and bulky computer in to a slim and sleek iPad and iPhone with millions of different Apps, has increased Apple’s popularity across the UK.
Apple has effectively faced diversification of the UK work force by workforce planning techniques. The high unemployment rate in the UK has favoured Apple when it comes to looking for suitable replacements for those approaching retirement at Apple. Their brand image has attracted many job seekers enabling them to skim through and employ the best candidates. The recruitment and selection process of Apple is well defined and promotes openness, fairness and equality.
Changes to their pricing strategies have promoted instalment payment plans from their 3rd party resellers enabling consumers to make purchases by paying in instalments. Apple has extended the credit agreements of resellers such as Orange and 3 mobile who agreed to instalments plans for the UK consumers promoting payment plans even for their latest iPad2. This strategy has boosted the sales of iPad and iPhone in the UK. New technological innovations such as slim Mac book air and iPad have revolutionised the service industry of the UK by helping them to lower the service gap to 0. Apple has faced the needs of a diversified UK population by assessing the ethnic backgrounds, developing an App store and an iTunes store to satisfy the needs of all the demographical segments in the UK.
Apple Inc has successfully addressed the demographical factors affecting their business by carefully segmenting them and by developing next generation technological products. Furthermore Apple has tackled the demographical diversification of the Apple work force by defining standards to ensure equality is practiced at all times. Apple’s success in facing these demographic factors can be evidenced by their UK computer market share of 32% and smart phone market share of 28% in 2011. The revenue growth of 9% from 2010 to 2011 further demonstrates the success of Apple UK.
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Unit 01 – Business Environment Business Transformation Process: To cater this growing demand Apple will need to expand their product portfolio. As the above figure shows to implement this strategic decision of expanding and restructuring Mr Fernandez needs tangible inputs such as more finance, people, machinery, more business space, vehicles and accessories. Plus intangible inputs such as knowledge (Strategic, Consumer, Markets, Industrial, Technological, Competitor), Skills and experience. These inputs will be transformed in the process of redesigning Clubtek as a business. And the desired output will be a larger