Apple Case
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Case study Apple
What are the benefits to Apple of outsourcing the assembly of the iPhone to foreign countries, and particularly China? What are the potential costs and risks to Apple?
There are few benefits to Apple of outsourcing the assembly of the iPhone into China, such as reducing labor and assembly cost, getting workers and materials easily, and changing design flexibly. In China the average income are much cheaper than U.S, so Apple can save the labor cost by moving the plant to China. In same time, all other materials are manufactured close from iPhone factory, so that they can also save assembly cost. The population in China is 4 times more than U.S, so they can find new workers/engineers easily in China. On the other hand, there is some risks to Apple, such as stealing Apple’s information and selling it to competitors, or copying Apple’s products and sell them cheaper price.
In addition to Apple, who else benefits from Apple’s decision to outsource assembly to China? Who are the potential losers here?
Apple’s outsourcing company Foxconn gets benefit from Apple by manufacturing the iPhone, and neighbors of Foxconn also get benefit by providing materials to Foxconn. By increasing number of workers who live in that area, the economy would be move to positive and the surrounding area gets higher rate of growth. While, U.S would be a loser because of losing the jobs in the country.
What are the potential ethical problems associated with outsourcing assembly jobs to Foxconn in China? How might Apple deal with these?
Potential ethical problems are the working condition at subcontractors. Low pay of line workers, long hours, mandatory overtime without paying these poor working conditions are against ethics. Apple should lead another company to better ways as a leader in manufacturing technology.
On balance, do you think that the kind of out-sourcing undertaken by Apple is a good thing or a bad thing for the American economy? Explain your reasoning?
I cannot choose if it is good or bad thing for American economy because Apple’s decision of outsourcing contains both side. Good thing of outsourcing in China is saving cost which can lead to provide less retail price on product in U.S. On the other hand, Chinese workers are facing trouble in working condition, and it is contains