Apple Case Study

• What positive effect does outsourcing have on workers?

  It reinforces a positive multiplier effect through job creation and upskilling people.
• What negative consequence can arise from companies competing for the lowest costs?

  It can lead to worker exploitation through poor conditions, pay, and hours.
• How do lower operating costs benefit a transnational corporation (TNC)?

  They lead to higher margins and greater profits.
• What advantage does outsourcing provide to a company in terms of market expansion?

  It allows the company to be flexible and rapidly expand into new markets.
• Why is outsourcing often seen as an unethical business practice?

  Because it can lead to exploitation and poor working conditions.
• What risk is associated with outsourcing regarding company information?

  There is a danger of classified company information being stolen through industrial espionage.
• How does outsourcing benefit the host country's economy?

  It benefits their economy directly and indirectly, acting as a catalyst for development.
• What is a potential downside of a country relying heavily on outsourcing?

  It can lead to a 'middle income trap' where the economy is only held up by outsourcing.
• What benefit do consumers typically experience from outsourcing?

  Lower prices and usually more availability.
• What negative impact can outsourcing have on product quality?

  It can lead to lower standards of quality for a product.
• How does outsourcing affect global trading patterns?

  It reinforces global trading patterns and grows international relations between countries.
• What is a common criticism of outsourcing from counter-globalists?

  They argue it is 'stealing our jobs' on a national scale.
• What strategies does Apple use in global marketing?

  • Annual Worldwide Developers Conference (WWDC)
  • Staying ahead of competitors
  • Localizing marketing strategies
  • Diversifying product lines
  • Targeting different audiences
• What is the purpose of Apple's services ecosystem?

  To 'hook' consumers into their worldwide ecosystem.
• What is the definition of 'global marketing'?

  It is the process of adjusting marketing strategies to adapt to the conditions of other countries.
• How has Donald Trump's rhetoric influenced views on outsourcing?

  It has been shared by other nationalist leaders looking to boost their own country's economy.
• What is the significance of China in the context of Apple's business practices?

  China is crucial as it represents a major market and production hub for Apple.
• What does the term 'outsourcing' refer to?

  It describes shifting one or more business aspects to an external organization, usually in another country.
• How does outsourcing benefit TNCs like Apple?

  It allows them to lower costs or increase flexibility, thus increasing profit margins.
• How does Apple exemplify globalized trade?

  • Acts as a microcosm of global trade
  • Involves production and distribution across the world
  • Centers production in semi-periphery nations
  • Uses global supply chains for components
• What does 'spatial distribution' refer to in the context of Apple's business practices?

  It describes the geographical spread of Apple's activities and practices.
• Where is Silicon Valley located?

  It is located in Southern California, south of San Francisco.
• What is the economic significance of Silicon Valley?

  It has a high concentration of wealth and successful tech companies.
• How do top-notch universities contribute to Silicon Valley's success?

  They attract young, entrepreneurial individuals and foster innovation.
• What is the role of Foxconn in Apple's supply chain?

  Foxconn runs Apple's manufacturing plants in China and is the largest employer there.
• How many employees does Foxconn have in mainland China?

  1.3 million employees
• What is the average pay for workers at Foxconn?

  Workers are paid an average of $1.70 per hour.
• What controversial decision did Foxconn make in response to worker suicides?

  They built 'anti-suicide nets' in 2010.
• How do companies like Apple respond to criticisms of worker exploitation?

  They often reinforce their commitment to workers' rights.
• What are the key impacts of outsourcing on workers and companies?

  • Job creation and upskilling for workers
  • Potential for worker exploitation
  • Lower operating costs for companies
  • Increased flexibility and market expansion
• What are the spatial patterns of Apple's manufacturing and supply chain?

  • Concentrated in NEEs like China and Southeast Asia
  • South Korea & Taiwan - microchips and screens - outsourced to Foxconn
  • Component supply in core USA and Western Europe
  • Limited suppliers in LICs like Africa and India
• Where is Apple based?


  Silicon Valley

  Cupertino, California - 20 miles south of San Francisco
• Why is Apple based in Cupertino?


  Area has a GDP of over $275bn

  High concentration of start-up unicorns and TNCs

  Surrounded by top universities - Stanford, good cultural and intellectual influences for Apple
• Where are Apple's camera lenses manufactured?


  Germany
• What are the significant issues with Foxconn?

  • workers do 12 hour shifts
  • workers are forced to live in cramped, unsafe communal housing
  • managers often falsify health and safety forms
  • since 2010 - 18 attempted and 14 suicides
• How many stores do Apple have worldwide?

  • 492
  • all 40 of China's have appeared in last 10 years
• What is the GDP of California?

  • $4.103 Trillion
• What is the GDP of Silicon Valley?

  • $840 billion