Assignment-01

Submitted to
Ms. Tarannum Azim
Course Instructor
International Business
Section-07
School of Business and Entrepreneurship
Independent University,Bangladesh.

Submitted by
Shabbir Ahmed
INB301
Section-07
Autumn 2023
2110233
2110233@iub.edu.bd
Independent University, Bangladesh.

Date of submission: 9th October 2023.

From 'Made in the USA' to Global Manufacturing: Apple's Shifting
Strategy

Answer to the Question No. 01

The above scenario postulates the globalization of production.
The globalization of production refers to the practice in which an organization distributes its
various production activities across multiple countries around the world. In the context of Apple,
which used to manufacture their products in the United States has shifted their production
activities primarily to China. Along with that they are actively exploring the way of switching
their production plants to Vietnam and India. So, this clearly determines the globalization of
production as it directly embodies the production activities in multiple countries around the
world.
China has the world's largest and most sophisticated electronics supply chain and this was the
major driver of the decision to shift the manufacturing location of Apple to China.
The sophisticated supply chain infrastructure of China comprises many suppliers of components
situated at a close proximity to manufacturing facilities which reduces the logistical costs and
ensures a never disrupted and efficient flow of materials to assembly lines. Therefore they are
able to quickly respond to market demands by making last-minute design changes as well as
meeting strict production schedules. Apart from that qualified individuals who work as a part and
parcel of the supply chain are easier to provide there with a very small time required compared to
their home country.
 Answer to the Question No. 02
Supply chain disruption, geopolitical tension and inadequate labor prices are the major
challenges Apple has faced after reallocating its assembly plants to China.
● Supply chain disruption: Apple faced a huge disruption in their supply chain during the
outbreak of COVID-19. As Chinese authorities imposed restrictions to prevent the virus
spreading by quarantining across the country the stores and production remained closed.
As a result they had to wait until the withdrawal of the restrictions imposed by the
authorities which impacted negatively on their operations.
● Geopolitical tension: When President Donald Trump took over the control from the very
beginning he kept on imposing higher import tariffs on the ‘Made-in-China’ electronics
and restricted supplies of components produced using US technology to Chinese firms
which was shown as a national security risk. All these were the outcome of the political
tensions between China and the United States. Therefore, it became costly and risky for
Apple to run their manufacturing process in China.
● Labor prices: Apple has faced criticism and scrutiny over labor practices of their
assembly plants in China.

Answer to the Question No. 03

Apple is shifting its production to Vietnam and India besides China. The major drivers behind
this decision are:
1. After the Corona outbreak disrupted the supply chain of Apple globally they understood
the vulnerability of relying solely on a single-location supply chain. In order to mitigate
such disruptions they are shifting their production in other countries as well.
2. The Trump administration's imposed high trade tariffs on Chinese-made goods.
Therefore, to avoid tariff-related costs and potential trade disputes Apple took that
decision.
3. Along with high tariffs on imported goods from China the labor wages rate was also
increasing which made the operation of Apple less cost-effective as one of the main
reasons for Apple to operate in China was the low labor prices. So they decided to shift to
such countries which are also offering the same.
 4. Vietnam and India offer a youthful and skilled workforce as a result Apple considered
this factor to meet their production needs.

Answer to the Question No. 04

Apple has faced several challenges and continues to experience ongoing impacts due to the
COVID-19 pandemic. Some of these challenges include:
● Apple’s revenue was falling down.
● The pandemic has disrupted the entire supply chain of Apple across the globe.
● The stores of Apple were closed due to the quarantine which was initiated to mitigate the
spread of the virus.
● Due to the outbreak of the virus there was a weakened demand for the products and the
consumers spending patterns were shifted.
● Apple had to postpone their several future strategies and mitigate their current problems.

Answer to the Question No. 05

In this situation all the countries are the potential losers.
● United States:
1. One of the main reasons Apple moved its manufacturing outside of the United
States was the lower labor costs which resulted in the American workers who
belong to the manufacturing sector end up losing potential job opportunities.
2. The amount of time to source the skilled individuals or to be precise the engineers
are very much lengthy compared to China.
3. After the Trump’s administration imposed high trade tariffs on Chinese-made
goods, they just undermined the probability of utilizing the world’s most
sophisticated electronics supply chain effectively.
● China: Due to the health and safety concerns and the carnage of lethal disease like
COVID-19 Apple decided to shift their strategy to rely solely on China for their
production of goods. Due to the shift there might be a negative impact seen on the
workforce of the manufacturing sector in China.
● Vietnam: Due to the lack of engineering resources the Vietnamese workers failed to
manifest the increased job opportunity.
 Globalization and Business Management

Answer to the Question No. 01

The evaluation of the viability of the transition towards a more interconnected and
interdependent global economy is conditional upon one's own views and the particular
circumstances under which globalization is being addressed.
In the given scenario-
● Globalization enables undeveloped areas to access and capitalize on the scientific
advancements and industrial progress that are available in the developed nations, hence
facilitating the improvement and growth of these areas.
● The process of globalization facilitates the rapid progress of technology, enabling global
communication, as well as political changes such as the decline of communism, and
transportation improvements that enhance the speed and frequency of travel. The
expansion of markets offers companies increased development opportunities, while the
rise in shared cultural values facilitates customer harmonization. Additionally, operating
costs are reduced in other countries, granting a competitive advantage, and access to new
raw materials, resources, and investment opportunities is made available.
● Outsourced work such as customer support, software development, accounting,
marketing and insurance by the developed nations are the effects of globalization on
business management in developing countries.
● Globalization allows to mitigate poverty in developing countries through their creation of
employment opportunities, exposure to higher education, and elevation of living
conditions.
● Globalization has led to reduction of costs in trade within the globe. It has led to
reduction of tax on importation of goods. As a result it facilitates more trades across the
border which allows the proper division of labor as well as efficient allocation of
resources. Also, the consumers are having more exposure in terms of their consumption
options with superior quality.
 ● Foreign investment is a consequence of globalization. Foreign investment is consistently
embraced due to its ability to deliver a host country with valuable resources, capital, and
technology, hence enabling the growth of its economy. This phenomenon contributes to
an increase of employment both directly and indirectly. By enlarging the volume of
exports to a certain nation, there is a subsequent enhancement in the current account,
which in turn contributes to the convenience of foreign debt repayment.
The aforementioned discussion clearly determines the integration and interdependence of the
global economy as a good thing. But its positive effects rely on the usage and the economical and
political context of a particular country.

Answer to the Question No. 02

I agree with the statement that Globalization has led to the spread of western culture and
influence at the expense of local culture in developing countries.
● Fast food chains such as McDonald's, KFC, and Burger King have significantly increased
their presence in the market in numerous developing nations. The prevalence of
standardized menus and Western-style eating experiences frequently results in the
establishing priorities of Western fast food over traditional local cuisine. Therefore, it is
being witnessed that people are more reluctant to use fast food as a source to eradicate
their appetite rather than their native foods.
● The global market is predominantly controlled by Western fashion brands. In developing
nations, a significant number of individuals choose to wear Western-style garments
instead of traditional apparel, primarily influenced by prevailing global fashion trends.
● The adoption and celebration of Western holidays and festivities, such as Valentine's Day
and Halloween, are progressively observed in developing nations, occasionally
overshadowing native customs and traditions.
● In developing nations, a significant number of individuals place a high emphasis on
acquiring proficiency in the English language, occasionally to the expense of their own
languages.
It is crucial to acknowledge that the aforementioned discussions demonstrate the manifestation of
Western culture through globalization but it is not universally consistent.