Apple Suppliers Case Study

Apple suppliers case study.
Apple Inc. is an American multinational company that design and sells consumer electronics,
computer software and personal computers. It is a global company that originated in California
USA. The above case has stated about the issues of Apple Inc., Apple had been accused of
having allowed labor rights violations in china at Foxconn and Pegatron a major supplier of its
product and how the company had worked hard to overcome these issues to avoid any negative
ramifications for its corporate image.
1. Would on shoring, insourcing, or a combination of the two represent a suitable
response to Apple’s problems?
Apple does not manufacture most of its goods domestically. They are manufactured other than
USA, semiconductors are manufactured in Germany and Taiwan, display panel in Korea and
chipsets in Europe. All these parts are ultimately assembled in china. Foxconn and Pegatron are
Apples two key suppliers.
The issue is raised is due to Foxconn affair and the Pegatron crisis. During that tenure Apple face
lot of challenges in their operations. Well taking about the on shoring and insourcing, it would be
beneficial directly to the origin country. Following benefits that Apple Inc. would get by on
shoring/ insourcing.
 Benefits if ease of communication.

 Better level of control, responsiveness and reliability.
 There would be less cultural differences and political and financial stability.
 Locally appropriate skill sets.
 Supply chain would be easier.
Apple could create ‘multi-source strategy.’ Using both multi-sourcing strategy Apple can
incorporate both offshoring and on shoring. For example, “With multi-sourcing, a company can
choose the best vendor for a given IT task. By outsourcing certain IT operations, the company
can handle the most important responsibilities internally and can focus on their concerned task.
2. If Apple continues on the current path, what should it do differently?
From the given article, Apples labor rights violation took place in china at Foxconn and second
one with Pegatron. Since This repeated labor rights violations happened in china, Apple should
not attempt to oversimplify their option such as move manufacturing out of china. In order for
Apple to prevent future labor right volition they should aggressively chip away at the problem
associated with contract manufacturing with a program of repetitive improvement, higher
standards, constant audits and growing transparency. One thing that Apple should do differently
I to put more of an effort into labor conditions in the foreign factories that are assembling the
Apple products. One wat they can achieve this change would be to pay the companies that are
assembling the product more money, which would result in Apple profit slightly decrease, just
by slightly decreasing their profit, it would allow companies like Foxconn and Pegatron to be
able to pay their employees more, reduce the work hours, invest in safety programs and provide
training for employees.
3 Should firm such as Apple maximize their profit, or should they sacrifices some profit to
do good?
I believe that firm such as Apple should sacrifice some of their profits in order to do well and
provide better working conditions for its worker. The case listed of few of poor practices that
Apple was exposed of which include workers were given no basic health and safety training,
they had to work up to sixteen hours work day which would go on for eighteen consecutive days,
workers would get denied when they request for day off and the dormitories that the workers
stayed in were over crowed, consisting of nothing but 12 tiny beds in a small area. It was also
proven that at the Pegatron factories, worker s could not help but fall asleep in the middle of
busy work day. Apple should lower their profit margin and pay Foxconn and Pegatron more
money for manufacturing their product so that they can begin to enhance the working
environment and eliminate some of the hazards that Apple has been getting criticized for
recently.
4. Does Apple face an industry specific issue, or do the same issue appear in other
industries.
Labor right violation is an issue that can be presented in any industries that uses a labor process.
Apple Inc. is not only tech company using cheap labor in Asian factories, Samsung, Sony or
British firm such as Tesco, which has its Hudl tablets made in same factories as Apple does.
Apple is a leader in the business world and needs to-do its part in leading by example. Apple can
achieve this by treating corporate values and formal standards of conduct as absolutes, creating
conditions, guidelines for engagement of suppliers.
Conclusion:
The CSR failures did not seem to affect Apple business performance. In 2015, it topped the
Forbes list of “The world most valuable brand “and ranked 12 in the global 2000 list and among
Americas best Employers. It still had unshakable customer loyalty that did not seem to have been
negatively affected by the alleged social irresponsible action of its key suppliers.

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Apple suppliers case study.

1. Would on shoring, insourcing, or a combination of the two represent a suitable

response to Apple’s problems?

 Benefits if ease of communication.

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