In the globalized business setting, Apple is one of the main business
entities that have outsourced several parts of its supply chain such as
manufacturing and assembly. A majority of the supply chain activities
have been outsourced to China in order to exploit the cheap and
skilled labour that is available in the Asian country (Apple diversifies
supply chain but keeps China at the center. Verdict, 2021). The main
benefit that the company has been able to enjoy by making the
outsourcing decision, it has also encountered a number of problems
relating to geopolitical, operational as well as regulatory hurdles.
Apple Inc. organization has been able to derive a broad range of
benefits by outsourcing some of its supply chain operations to China.
Some of the major benefits include the ability to take advantage of
China’s humongous industrial infrastructure, the availability of a vast
number of skilled labour forces at an affordable rate, the low cost of
production as compared to other nations and the capability of
Chinese manufacturers to automate their production lines (Apple
diversifies supply chain but keeps China at the center. Verdict, 2021).
The benefits that have been created due to the outsourcing decision
have played a key role to create value for the Apple business. Apple
has been able to curtail its production costs and thus, on the financial
front it has been able to positively influence its profitability. Similarly,
Apple Inc. has also been able to derive value from the benefits by
being able to meet the growing demands of the customers at the
global level. Selden has argued that the commercial victory of Apple
lies in its outsourcing strategy since it is able to divert a major chunk
of consumer electronics production to Asia, specifically China (Chan
et al., 2013). The outsourcing of some of the supply chain elements
has also created value for its customers because it ensures that there
is no shortage of supply of Apple’s top-notch innovative products in
the market.
References
Apple diversifies supply chain but keeps China at the center. Verdict.
(2021, June 18). Retrieved February 1, 2022, from
https://www.verdict.co.uk/apple-supply-chain-china/#:~:text=Apple
%20is%20moving%20some%20production,%2C%20Macs%2C
%20and%20wearable%20devices
Chan, J., Pun, N., & Selden, M. (2013). The politics of global
production: A pple, F oxconn and C hina's new working class. New
technology, work and employment, 28(2), 100-115.
