Question

Case Questions :

1. What are the advantages and disadvantages to Apple of outsourcing its production to factories in China?

2. What factors influence the choice of countries to which a firm might outsource its production?

3. Is there anything that might cause Apple to eventually shift production back to the United States?

4. Why is Apple more vertically integrated than many other computer makers?

5. What factors will help or impede Microsoft in matching the advantages Apple gains from its vertical integration strategies ?

Answer 1

answer-

1. What are the advantages and disadvantages to Apple of outsourcing its production to factories in China?

ADVANTAGES-

• availability of skilled chinese labor by outsourcing its production in china.
• superior responsiveness of Chinese factories to Apple’s needs.
• lower cost of production because of availability of cheap raw materials for production in china.
• high demand of apple phones in chinese market.

DISADVANTAGES-

• chances of ethical & cultural issues among the US executives & chinese executives.
• interference of government & chinese political parties may affect the production of apple in china.
• differences in quality standards in this chinese manufacturing plant for apple phones.

2. What factors influence the choice of countries to which a firm might outsource its production?

the choice of countries for outsourcing the business can be depend on following factors-

• availability of reseauces like land,manpower,technology etc.
• lower cost of such resources so that production can be minimum.
• high demand in the home country for that foreign company's products/services.
• favoorable governement regulations like subsidies, tax relaxation for a specific period of time etc for foreign companies to estabilsh thier manufacturing plant in thier home country.

3. Is there anything that might cause Apple to eventually shift production back to the United States?

yes, there are some situations in which the production of apple can go back to united states which are following-

• government conflict between US government & chinese government.
• government posing high taxes on export of apple materials to china so that prices of iphones would increase in chinese market.

4. Why is Apple more vertically integrated than many other computer makers?

apple is vertically integrated because in this integration the control over all the business activities comes from the top management irresepective of the many production plant operating in many countries. these integration is vertical because the production opearations of its products & services are all same which are directed from the united states Headquarter of apple.

*as EA, i can answer one out of multiple questions but i tried to answer first four for your help.hope these answers would help you.good luck & rate.