Case study - APPLE and BANANA Flashcards
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What is apple?
US TNC
Electronic tnc
Is apple the largest tnc globally?
It is the 11th largest tnc in 2014
Is apple largest mobile phone producer?
Third largest producer in 2019
What does apple produce
Familar high tech products including iphones iphone imacs apple watches marketed globally under apple
Key information
- Largest IT by revenue
- Number one global brand by value (234 billion)
When did apple start?
1976 as personal computer manufacturer
1982 took over mac intosh organised and launched the apple mac book when they earned their growing reputation and brand loyalty
Location of main HQ
Cupertino California
How many employees do they hire
137,000 full time employees
How many stores
510 retail stores
How many countries
22
What factors led to their success
*
What factors led to their success?
- Stylish and well designed products
- Slick marketing and branding growing their brand loyalty
- Innovative products that are regularly updated
- Focus on highly mobile devices fits market needs
- Selling product sonline together with ancillary products such as movie and tv programmees
- Diversification into new technologies and platforms as they evolve
Where do apple outsource their porduction?
Established Taiwanese electronics firms such as FOXCONN (competed for their manufacturing contratc on low lab costs)
Why did they outsouce?
Cheap lab costs
Young larfe skilled non unionsed workforce who will work long gours on low pay
Where was chinas first and most succesful special economic zone?
Shezen offering incentives to attract international companies
What is good about apples supply chain
Apple is the global leader in supply chain management
Use a lean prodcution system utilising their spatial organisation
This reduces stockpiling and number of warehouses leading to reduced costs and higher profitability
Ships orginal sources directly to assembley complex
Where did apple expand their production to?
Austin and Texas
What is apples market compromised of?
Apple is a global company with distinctive geography
Predominantly in richer developed countries
Avg market profile = 31 year old, educated, wealthy prepared to pay a premium price
What were apples average sales in 2011 and where?
44% of sales in USA
Where is apples most rapid growth?
Asia-pacifc region due to global demand for iphone
Where are apple products designed?
Silicon Valley California
Where are apples products produced?
Mainland china - Foxconn taiwan based company
Where are different components of apples products sourced from?
Sourced globally e.g. wifichips can orginate from usa, europe and asoa
Where are most of apples emplotees based?
In the hde (USA) reflect high tech, knowledge intesnive business
In ldcs manufacturting production up to 2.5 million people
Where is apples HQ and R and D ?
Apple Park, Cupertino Califronia
How much is in Austin and Texas?
Large campus and mac pro assembley in austin
Texas employ 6000 people expanding to 10k
How many data centres does apple have in the USA and in which states?
Five data centres
Two - cali (Neward and Santa carla)
Two western usa at Reno and Nevada
one on eastern seaboard of usa
Plans of a cengtre in Iowa
How many people does apple employ in all states?
90,000 in all 50 states
Where is Apples European HQ?
Cork, Ireland
How many employees does it have in ireland?
6000
What is the signifcance of cork?
Acts as a global transport logistics hub for apple organising shiplents of assembelly of iphones and ipads
Where are apples 511 stores located
Over half in usa
115 in EU and Middle east
42 in China
Foxconn
longest running partenr main production base in foxconn city shezen hongkong
How many assembley complexes does foxconn have?
Zhengzhou, Henan province and chendu, sichuan province in centra china
Employ 1 million workers
Why did apple locate in cork?
Lured by their high unemployment rates and 12.5% corpation tax
What were the positive impacts of apple irish hq?
- Employs 6000 workers in holyhill - largest employer
- Corks desingnation as apples logitics hub enhances irelands reputation and global connectivity
- Over 100 people work in teh logistics team
- Generated 3000 jobs for those in ancillary work
- Attratced other high tech firms to the area
- Attratced highly skilled workforced and provided inspiration for locak education and r and d
- Contributed to infrastructural improvements to city
- Enhanced irelands reputation for hosting high tech industries
Negative impact upon ireland?
- Most highly skilled workers have migrated from eu countries - no jobs for locals
- 90 nationalists, 700 french, 460 germans, 53 diff langauges
- (however this did help cork become more cosmopolitican
- Apple recieved favourable treatment from ireland which caused tension between eu and usa apple owed tax on their profit
Positive impacts in china?
Foxconn employs 1.3 million employees working for apple supporting 5 million jobs to the country
Working conditions in china?
Workers in foxconn live on site where there are dormitries, shops, cafes etc
Young migrant workers from china
Work 62 hours a week on 300 dollars a month which is just enough fpr their living expenses
Excessive hours exist despite apple trying to reform after sucides over working conditions
What did the eu competition comissioner do in 2016?
Concluded apple had recived illegal aid from ireland and had to pay 13 billion in unpaid taxes between 2004- 2014
Health and safety in china?
Workers are exposed to toxic chemicals used to clean the products
Ear plugs and goggles not always avaliable
Student and child labour in china
2017 student interns at foxconn were working excessive hours
2018 quanta computer ( apples watch manufactuer) were hiring high school interns
china is allowed to hire interns under 18 but apple as US TNC is notdue to social responsibility
Apple now demands that only 10% of workforce are student interns
In response apple now has a supplier code of conduct and audits suppliers factories regularly
What are the enviromental issues?
Negative:
* Apple’s 2023 Environmental Progress Report states that the company’s carbon footprint totaled around 23.2 million metric tons of CO2 equivalent in 2022, with 70% of these emissions coming from the manufacturing phase.
* 2% of global energy consumption, and this figure is increasing with the demand for consumer electronics.
What is apple doing to responsd to enviromental impact?
- Due to criticisms of practices from greenpeace in 2000s apple produced green my apple campaign
- Uses 100% renewable energy in its facilities in the usa and has established its own energy company
- Apple energy = solar energy
- Removed all pvc plastics and chemicals from all of its products
- Promoite recycleability of its products, lack of repairability still a problm
- In 2016 apple issues 1.5 billion green climate bond - proceeds dedicated to financiaing enviromental projects
- Apple moved from eleventh in green peace green electronics ranking in 2006 to second in 2017
Where are apples producst sold the most?
45% in usa 2019
2016 Chcina became temporarilyt second largest market for apple
Europe is the second largest
What did apples services revnue increase to ?
13.5 bn in 2013 - 50 billion in march 2020
Where was apples trade war?
Between us ans china heavy on tariffs chinese imports to usa
Apple has to pay for imports back to usa
Fallen in line with 2017us administration aim to re-invigorate domestic manufacturting
What is apple doing to support that?
Supported by incentives tehy investing more into us domestic suppliers and manufacturers
Pledged to create 20,000 more jobs and invest 5 billion to support innovation aming us manufacturs from 2018-2023
Why is apple investing in more expansions in the US?
Federal tax exclusion zones in austin - dont have to pay tarriffs onimported components ther
What has happened to apples market in china?
Since peak in 2016/17 has plateuaed and reached saturation point
Remains good potential market due to its strong iphone user base
Apple facing competition from chinese huawei phone
Is apple in the indian market?
No - attemepted to enter rapidlt expandingindian marker but unsuccesful due to market and atvlet ther eled by cheaper competitors
