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Strategies employed by the apple company in order to manage the negative effects of trade traffics caused by us china trade war

Introduction

The trade war between China and Us can even go past direct disruption of world supply chain and taxes since the target is based on the investment. Therefore in case of any interference to the distribution and supply chain which are the major components of international trade, the impact will be long-term. A company like apple will have to relocate their factories as well as distribution centres. Since apple invests in both two countries, this kind of escalation will affects the economy of both counties. China as a county do not only contribute to the largest market for Apple products but it is also the major manufacturer of apple primary products such as MacBook, iPad, and iPhone, (Duhigg, & Bradsher, 2012).

This has made apple to keep silence on the issues discussed previously during the meeting between cooks and trump. Negotiation is one of the strategies that apple is using to ensure that agreement is reached so that China could change their policies. Since most of the apple products are manufactured in China, it is their wish that agreement is reached so as to prevent the disruption of the supply chain.

Another strategy apart from negotiation and complying with the regulations discussed, Apple Company is working harder to ensure that their products become the best in the supply market, (Kao, 2007). By doing that, they will gain a large market share from other counties. Adopting the best technologies and innovation strategies will help in increase their market share even if the trade war between China and us persists. In business economics it is always said that consumers know their needs and demand. You cannot make decisions for the consumer either to use or not to use, as long as the product conforms to their needs, in terms of quality and other factors, the consumer will always go for such products, even though restrictions exists.

Financial impacts of traffic on the firm's profitability.

While big firms such as Apple are at risks due to the trade traffic war that exists between US and China, because most of their products are manufactured in China, the rival companies and small manufacturers are celebrating the big profits they are realizing due to this traffic war, (Arsenault, & Castells, 2008). Small companies like Samsung in US are trying to take advantage of this trade traffic since China is not their main supply market. Trade tariffs have an impact on the profit margin of the firm, especially when operating in a restricted business environment. Samsung is interacting with other counties such as South Korea in a free market economy where there is no increase in taxes, making them enjoy maximum profits.

Samsung is taking advantage of the trade traffic to penetrate other markets with the aim of increasing their market share. This makes them increase their sales and so is the profit. Their production activity is not being interfered by the trade traffics war. In the case where there is disruption of the production activity, it means there is less sale, and the profit margin will be affected. For Samsung, they are thankful for the restrictions that exist between China and Us.

In conclusion

In conclusion, whenever there is a trade dispute between countries, some companies will enjoy while others will be challenged. It is therefore important to operate in a stable business environment so as to maintain the economy of a county.