Goal: to develop your skills in analyzing International Business issues, finding relevant information, suggesting solutions, and communicating them, in a professional manner, to the class. Select a case study from the textbook. Acting as an International Business consulting firm, the presenting group analyzes the case, prepares solutions/ recommendations, plans, and runs a class discussion of this case. Time allocation: approximately 15 min. Attire: business casual.
Generically, your case analysis should incorporate the following major points:
The case (major events and players, their background) and a company profile as related to the case;
Business environment as relates to the company/industry covered by the case, and
Country/regional environment in which the case takes place.
These generic points in your case presentation should be covered based on the case specifics.
After discussing the case and engaging the class, the group presents and explains, in a professional manner, its own solutions/ recommendations. Please do not complicate your case analysis with irrelevant information.
The following is the Case study that has been selected:
“How the iPhone Is Made: Apple’s Global Production System
“In its early days, Apple usually didn’t look beyond its own backyard to manufacture its devices. A few years after Apple started making its Macintosh computer back in 1983, Steve Jobs bragged that it was “a machine that was made in America.” As late as the early 2000s, Apple still manufactured many of its computers at the company’s iMac plant in Elk Grove, California. Jobs often said that he was as proud of the Apple’s manufacturing plants as he was of the devices themselves.
By 2004, however, Apple had largely turned to foreign manufacturing. The shift to offshore production and assembly reached its peak with the iconic iPhone, which Apple first introduced in 2007. The iPhone contains hundreds of parts, an estimated 90 percent of which are manufactured abroad. Advanced semiconductors come from Germany and Taiwan, memory from Korea and Japan, display panels and circuitry from Korea and Taiwan, rare metals from Africa and Asia, and the gyroscope used for track“ng the iPhone’s orientation comes from Switzerland. Apple’s major subcontractor, the Taiwanese multinational firm, Foxconn, assembles half of all the iPhones sold in the world today at a huge factory in China. Foxconn also has factories devoted to iPhone assembly at several other locations, including Brazil and India. Another Taiwanese-based company, Pegatron, also assembles iPhones for Apple at a factory in China.
Apple still employs some 80,000 people in the United States, and it has kept important activities at home, including product design, software engineering, and marketing. Furthermore, Apple claims that its business supports another 450,000 jobs at U.S.-based suppliers. For example, the glass for the iPhone is manufactured at Corning’s U.S. plants in Kentucky, Analog Devices in Massachusetts produces chips that enable the iPhone’s touch display, and a Texas Instruments plant in Maine makes electronic components that go in the iPhone. However, over 1.5 million people are involved in the engineering, building, and final assembly of its products outside of the United States, many of them working at subcontractors like Foxconn.”
“When explaining its decision to assemble the iPhone in China, Apple cites a number of factors. While it is true that labor costs are lower in China, Apple executives point out that labor costs only account for a small portion of the total value of its products and are not the main driver of location decisions. Far more important, according to Apple, is the ability of its Chinese subcontractors to respond very quickly to requests from Apple to scale production up and down. In a famous illustration of this capability, back in 2007 Steve Jobs demanded that a glass screen replaces the plastic screen on his prototype iPhone. Jobs didn’t like the look and feel of plastic screens, which at the time were standard in the industry, nor did he like the way they scratched page 37easily. This last-minute change in the design of the iPhone put Apple’s market introduction date at risk. Apple had selected Corning to manufacture large panes of strengthened glass, but finding a manufacturer that could cut those panes into millions of iPhone screens wasn’t easy. Then, a bid arrived from a Chinese factory. When the Apple team visited the factory, they found that “the plant’s owners were already constructing a new wing to cut the glass and were installing equipment. “This is in case you give us the contract,” the manager said. The plant also had a warehouse full of glass samples for Apple, and a team of engineers available to work with Apple. They had built onsite dormitories so the factory could run three shifts seven days a week to meet Apple’s demanding production schedule. The Chinese company got the bid. ”
“Another critical advantage of China for Apple was that it was much easier to hire engineers there. Apple calculated that about 8,700 industrial engineers were needed to “oversee and guide the 200,000 assembly-line workers involved in manufacturing the original iPhone. The company had estimated it would take as long as nine months to find that many engineers in the United States. In China, it took 15 days.
Also important is the clustering together of factories in China. Many of the factories providing components for the iPhone are located close to Foxconn’s assembly plant. As one executive noted, “The entire supply chain is in China. You need a thousand rubber gaskets? That’s the factory next door. You need a million screws? That factory is a block away. You need a screw made a little bit different? That will take three hours.
“All this being said, there are drawbacks to outsourcing to China. Several of Apple’s subcontractors have been targeted for their poor working conditions. Criticisms include low pay of line workers, long hours, mandatory overtime for little or no additional pay, and poor safety records. Some former Apple executives say there is an unresolved tension within the company: Executives want to improve working conditions within the factories of subcontractors, such as Foxconn, but that dedication falters when it conflicts with crucial supplier relationships or the fast delivery of new products. Furthermore, Apple’s outsourcing decisions have been criticized by President Trump, who argues that the company is guilty of moving U.S. jobs overseas.”
“While Apple disagrees with this assessment, it has responded by increasing its investment in U.S. facilities. In 2018, for example, the company announced it would invest $30 billion over five years to create 20,000 new Apple jobs in the United States. Most of these jobs, however, are expected to be in software development and data center operations, not manufacturing and assembly. Finally, in early 2020 a new risk associated with a globally dispersed supply chain emerged when a highly infections novel coronavirus, COVID-19, emerged in China, forcing a temporary shutdown of many suppliers, limiting production of the iPhone in China and threatening to depress the company’s global revenues and profits.”
Task:
Here is what I need you to do. I have provided a few files down below. In the Case Presentation – CH1 Apple Example.pdf, I have to present similiar slides to that of Page 12-16. I need you to write on the following topics in the format of speaker notes.
1) Apple’s total revenue breakdown over the years. Explain certain revenue spikes and falls and the reasons for it. Also highlight revenue from their iphones.
2) analyze the specific environment of the mobile phone industry and the regional contexts in which Apple operates, such as in China, the U.S., and other key markets. You should consider factors such as market size, competition, supply chain logistics, local business practices, and regional economic conditions. The focus is on understanding how these environments influence Apple’s operational and strategic decisions, and how they contribute to or hinder Apple’s success.
3) evaluating the business environment specifically related to Apple and the smartphone industry. It includes assessing market trends, industry-specific challenges, competitive dynamics, and customer behavior. Additionally, it involves understanding how these factors together shape the business landscape in which Apple operates, and how they impact Apple’s strategic decisions, such as outsourcing production to China.
Remember that my part of the presentation is about 5 minutes. So please write and pace out points accordingly. Write the entire details in a word or pdf format and include the neccesary graphs with citations.
Additionally, I have also attached slides of my groupmates for reference purpose. But please use the Case Presentation – CH1 Apple Example.pdfas your primary reference (Page 12-16). Include facts and figures and reasonable explanations for the graphs etc.
Let me know if you have any doubts.
