Political

Political factors are usually governmental decisions which influence businesses decisions. For example, one of the political influences can be legal and fiscal policies, taxation and laws, which the government might introduce. This can directly change supply and demand on certain products, which can then have an effect on different organizations, which produce products which are affected. For example, recently the UK government has prohibited smoking in the pubs and most of the other public places, and increased the legal age of smoking up to 18. This had a direct impact on the companies, which produce cigarettes, as the demand for their products decreased. Less people became able to buy their products, which had an impact on their profits. As a result, some of the cigarette produces have lost a lot of money. Another example can be an increase in tax rates.

For example, there are fears, that Europe may drive VAT increase to 20%. If the VAT is increased to from 17.5% to 20%, some of the products will become more expensive, which might decrease the demand for these products. However, this might not affect other types of products, like food for which the businesses don’t have to pay VAT tax. There are many

other effects of rise in taxes.

Another example of the political factors can be the effect of rise in income tax which can lead to the decrease in the output of different companies, which can then lead to the rise in unemployment. As the income tax raises the demand for certain products decreases, and as the demand for certain products decreases, companies are tend to charge lower prices, which then results in the inflation which is very bad for the economy of the country.

If the UK government suddenly decides to encourage healthy eating and prohibit junk food, then the fast food producers will suffer, as they will have to develop new, healthier products if they want to stay in the market, which will cause high costs for the companies who produce fast food or fast moving products, like crisps.

At the moment taxation is controlled by the UK government, so it will influence my product and Apple, but it will be an economic factor. If the British government decides to take European constitution, then it would be taxing the products in exactly the same way as all other European countries do. Therefore, it will still influence Apple, but it in this case it will be a political factor.

A very important political factor as well as economic, is changes in the availability of raw materials. This factor can have a major effect on the Apple products. For example, if the UK oil and plastic supplier decides to charge higher prices due to the scarcity of this resource or whatever reason, the prices on plastics are likely to increase. Apple uses large quantities of plastic in order to make its products, so it will have to spend more money buying plastic and their production costs will increase. As the production costs of Apple will increase, prices on Apple products will be likely to rise. Therefore, if the prices on oil increase, they can potentially increase prices on all plastic products like Apple. This might, as a result, cause a decrease in demand for Apple products.