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Assignment -International Business.docx

Assignment -International Business.docx - Apples...

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Apples Outsourcing Dilemma One of the obstacles many companies face today is the need to get new products to the world as fast and efficiently as possible. Many have turned to outsourcing production to foreign countries, especially to China. The Asian market is growing at an unbelievable rate. When your manufacturing unit is in China, it becomes easier to sell into the Chinese market, which increases your global mark and can lead to massive growth in your company. Apple is a prime example of a company who uses this method of production. There are many benefits and risks to outsourcing the assembly of the I-phone to foreign markets. Apple points states that in addition to labor costs being cheaper in China than in the United States, the ability of its Chinese subcontractors to respond quickly to scaling production up and down has been a deciding factor in the company’s success. Another reason for outsourcing is that it is much easier to hire engineers quickly in China than anywhere else. Apple stated that more than 8,700 industrial engineers were needed to guide the assembly line workers in manufacturing the I-phone in China; it took 15 days to hire all the engineers. Despite its overwhelming success with outsourcing I-phone manufacturing, Apple has been criticized repeatedly for the poor working conditions that exist at some of its Chinese factories. In the city of Zhengzhou population 6 million located in one of the most impoverished areas of China sits Foxconn. Foxconn is the manufacturing partner of Apple. This factory produces around 500,00 I-phones per day. The local Chinese government has given Foxconn 1.5 billion
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