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The case study analyzes the benefits, costs, and risks of outsourcing iPhone production to China, highlighting lower labor costs and rapid scalability as key advantages, while also noting ethical concerns and quality control issues. It identifies Apple and Chinese subcontractors as winners, while U.S. workers and manufacturers may face negative impacts. The study suggests potential solutions to ethical problems, including increased oversight, supplier audits, and collaboration with NGOs to improve working conditions.

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10 views3 pages

Ibm 2

The case study analyzes the benefits, costs, and risks of outsourcing iPhone production to China, highlighting lower labor costs and rapid scalability as key advantages, while also noting ethical concerns and quality control issues. It identifies Apple and Chinese subcontractors as winners, while U.S. workers and manufacturers may face negative impacts. The study suggests potential solutions to ethical problems, including increased oversight, supplier audits, and collaboration with NGOs to improve working conditions.

Uploaded by

sumithamaran061
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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NAME: Sumitha N

REG.NO: 23AM34

COURSE CODE: 22MBAT23

COURSE TITLE: International business management

CASE STUDY ON MAKING THE APPLE IPHONE

Case Study 1: Making the Apple iPhone

Question 1:

Benefits, Costs, and Risks of Outsourcing to China

BENEFITS
Lower Labor Costs:

While not the primary driver, lower labor costs in China provide a cost advantage.

Rapid Scalability:

Chinese subcontractors can quickly adjust production to meet Apple's demand fluctuations.

Proximity of Suppliers:

The clustering of factories in China offers a streamlined supply chain.

Access to Skilled Engineers:

China has a pool of industrial engineers to oversee production.

POTENTIAL COSTS AND RISKS:


Ethical Concerns:

Poor working conditions in some Chinese factories can damage Apple's reputation.

Quality Control Issues:


Outsourcing can introduce risks related to quality and consistency.

Dependency on Foreign Suppliers:

Reliance on foreign suppliers can create vulnerabilities in the supply chain.

Intellectual Property Risks:

Transferring technology to foreign manufacturers may pose risks to intellectual property.

Question 2:

Winners and Losers

WINNERS:
Apple:

Benefits from lower costs, faster production, and access to skilled labor.

Chinese Subcontractors:

Profit from the large-scale production of iPhones.

Workers in China:

Employed in the iPhone manufacturing process.

POTENTIAL LOSERS:
U.S. Workers:

May lose jobs related to iPhone manufacturing if production were kept domestic.

U.S. Manufacturers:

Could face reduced demand for components if Apple shifts sourcing.

Workers in Other Countries:

If China's labor advantages erode, jobs may shift to regions with even lower
costs.

Question 3:
ETHICAL PROBLEMS AND POTENTIAL SOLUTIONS:

Ethical Problems:
Poor Working Conditions:

Low wages, long hours, mandatory overtime, and unsafe conditions.

Child Labor:

Concerns about the use of child labor in the supply chain.

Environmental Impact:

Potential negative environmental effects of manufacturing processes.

Potential Solutions:
Increased Oversight:

Apple can implement stricter oversight mechanisms to ensure compliance with


ethical standards.

Supplier Audits:

Regular audits of suppliers can identify and address issues.

Collaboration with NGOs:

Partnering with non-governmental organizations can help improve working


conditions.

Public Pressure:

Engaging with stakeholders and consumers can create public pressure for ethical
practices.

Long-Term Investments:

Investing in improving working conditions in the long term can lead to a more
sustainable and ethical supply chain.

By addressing these ethical challenges, Apple can maintain its reputation while ensuring that its products
are produced in a responsible and sustainable manner.

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