Global Economic Environment
Group Presentation Written Report (Group 1)
Christy Lai Kei Kwan 12119785D
30th September 2013
Question 1
(a) How has Apple capitalized on the globalization of production? What advantages does manufacturing in China offer the company?
ANS: Globalization has been a heat topic in these past years. Many international companies will use this advantage for their own production, and Apple is definitely one of the significant examples. Below shown are the ways that Apple capitalized on the globalization of production. Firstly, Apple finds and searches subcontractors from places such as Korea, Taiwan, China and even Germany. It keeps expanding itself by improvements as well. For example, it replaced plastic
…show more content…
Thirdly, since these Indian workers do not work directly under the American law environment, they will then work in a more free and relaxed environment.
With the existence of the benefits above, there are certain risks that are involved in outsourcing. The workers are not directly supervised by the American law firm therefore the service will then not be guaranteed. If there are any mistakes, the firm will have a worse reputation and image consequently. Also, there may be a chance of exploitation of Indian workers because they have lower bargaining power. In this certain case, the workers will be less devoted during work and have less sense of belonging to that law company.
(b) Which group gain from the outsourcing of legal services? Which group loses? On balance, do you think that this kind of outsourcing is a good thing, or a bad thing? Why?
ANS: Using a monetary point of view, the owners of the firm surely gain from the reduction in costs. Besides, the US firms will earn by enlarging its profits. Most significantly, the Indian workers are gaining from this outsourcing activity. They can have a stable profession in the States and they may earn a higher salary comparing to the low skilled jobs provided in India.
For the groups that will lose, they are the US lawyers or some of the Indian workers in special cases. The US lawyers may have difficulties in finding jobs since the Indian workers are hired. There will be then less US lawyers will be
In my point of view, it is a misconception when claim that outsourcing is bad to the US. The following reason can show how the outsourcing positively affect to the US. Superficially, the GDP of USA increases every year from 2006 to 2015 except 2009 when the economic recession takes effect on the US economy. The US is structuring its economy and got positive benefit that reflects on its GDP. Moreover, the booming global economy changes the global value chain. It enables the emerging and
Instead of relying only on domestic workers, many companies also outsource some of their labor into foreign markets. This practice can have negative effects on the economy overall, individual businesses can often benefit from this practice. Outsourcing offshore can allow companies to tap into foreign markets and expand their businesses.
Apple products are designed in California USA and manufactured in different foreign countries such as China, Taiwan, Korea, Mongolia, and Europe which produce part of the devices, most of the raw material ‘Earth Minerals’ to produce these items can be found in China. Since technology has a lot of benefits in human’s life, the demand has been increase year by year which make business to expand and hiring more people in the company. From 2005 to 2015 the number of full-time employee’s has been increase more than 80 thousands.
Cost Advantage: The job can be completed at a lower cost than the company may incur and with better quality at the same time. For example, the wages in India is a fraction of the same work done in other western countries. The cost savings is approximately 60 percent when outsource in India. In addition, the higher quality service ensures the company benefits from the high quality work can be done at a low price.
Despite that an excessively excellent image of outsourcing was provided to individuals one or two of years back, the truth check they were confronted with shattered the dream badly. Recent statistics reveal that over four-hundredth corporations are concerned either in experimenting or are already engaged in shifting their services overseas in search of low-cost labor and services that are being provided by countries like China and Bharat. Such efforts have left native market labor at extreme disadvantage wherever they're finding it vastly tedious to create each ends meet, leave behind the back-breaking burden of taxes they're being obligatory to. With over four-hundredth major company executives registering their opinion by discouraging the method of outsourcing the controversy that was antecedently being won by the
It ends up putting our country farther into its trillions of dollars in debt. “Eight of the biggest U.S. technology companies added a combined $69 billion to their stockpiled offshore profits over the past year, even as some corporations in other industries felt pressure to bring cash back home (U.S)”. Eight of the top technology companies,including Microsoft, Apple and Google, now account for more than a fifth of the $2.10 trillion in profits that U.S. companies are holding overseas. “The amount of unrepatriated foreign profits reached $2.4 trillion, according to Citizens for Tax Justice, allowing companies to avoid up to $695 billion in taxes
I have to admit that I am a fan of Apple Inc. products especially the iPhone. In fact, as I am writing this Individual Reflective Journal, I am waiting for the latest iPhone 7 which the critics claimed that rumours spread around the 2016 iPhone release will be on 12th September 2016. This phenomenon had caused a chaos to the fans and also technology lovers around the world who consistently update themselves with the product. This has got me thinking on the Positive & Negative Effect of Globalization on Apple Inc. specifically the iPhone.
SABMiller and Diageo are two largest beer producer in Africa. ”SABMiller, if combined with its partnership with France's Castel Group, sells roughly 60% Africa’s beer by volume. Diageo’s also expands its operation successfully that Senator Keg, its supercheap beer, is also now number two most popular beers in Kenya. As these giant brewers monopolized Africa’s beer market, it can be said that the market has an oligopoly market structure, and both pursue identic operations, so the market can be labeled as competitive. The interdependence that is happening between both brewers makes the competition happens. As SABMiller produces Impala that is half price from its previous beer Manica, Diageo produces Senator Keg to balance it. Diageo
Globalisation highlights a process in which national and more localised economies, societies, and cultures are become interconnected through the worldwide network of trade, communication, immigration and transportation. (Anon., 2014) This essay will assess to what extent the Global Corporation Apple meets Luke Martell’s 5 criteria of Globalization. Upon establishing these 5 steps which are Global in distance, globally Inclusive, Interdependency, and Stability in relation to structure and finally availability to the masses (Martell, 2010). This essay will critically assess the significant importance and effect of issues such as power, inequality and lack of inclusion presented in the global process has
Apple has benefitted significantly from globalization and from technology change. For example, the company started primarily as an American company, but globalization has allowed Apple to become a multinational operation. The company only derives around one-third of sales form the Americas according to the annual report, a figure that includes Canada and all of Latin America in addition to the United States. The company therefore can be said to sell globally. Sales in Asia-Pacific were growing especially fast, and the company has numerous flagship stores in the region.
1-15. What are the pros and cons for local and overseas labor forces of Apple's going global?
For big corporations outsourcing gain the overall advantage because they are able to increase their economic output while drastically decreasing their overhead expenses. The saving the companies incur is then passed on to the consumer who can afford to buy multiple products at a lower price. They are able to acquire access a wider range of the world's resource and intelligence. Because big corporations are able to offer competitive wages to foreign workers they are able to hire the best talent within country. This also frees up jobs in America, by allocating tedious jobs overseas big corporations can better utilize talents in their home countries. By doing this they can focus on more important corporate related tasks. The benefits of outsourcing in low wage countries is that it raises their standard of living. Foreign workers are often payed twice as much than what could be offered by jobs within their country. Foreign worker also gain valuable skill sets from international companies. These skill sets increases their marketability within the workforce. The skill sets they develop are transferable and gives them a competitive
In this way, the Fed manages price inflation in the economy. So bonds affect the U.S. economy by determining interest rates. This affects the amount of liquidity. This determines how easy or difficult it is to buy things on credit, take out loans for cars, houses or education, and expand businesses. In other words, bonds affect everything in the economy. Treasury bonds impact the economy by providing extra spending money for the government and consumers. This is because Treasury bonds are essentially a loan to the government that is usually purchased by domestic consumers. However, for a variety of reasons, foreign governments have been purchasing a larger percentage of Treasury bonds, in effect providing the U.S. government with a loan. This allows the government to spend more, which stimulates the economy. Treasury bonds also help the consumer. When there is a great demand for bonds, it lowers the interest rate.
1) According to the Law of Demand, the demand curve for a good will A) shift leftward when the price of the good increases. B) shift rightward when the price of the good increases. C) slope downward. D) slope upward. Answer: C 2) An increase in the price of pork will lead to A) a movement up along the demand curve. B) a movement down along the demand curve. C) a rightward shift of the demand curve. D) a leftward shift of the demand curve. Answer: A 3) An increase in consumer incomes will lead to A) a rightward shift of the demand curve for plasma TVs. B) a movement upward along the demand curve for plasma TVs. C) a rightward shift of the supply curve for plasma TVs. D) no change of the demand curve for plasma TVs. Answer:
“Today, Indian outsourcing is one of the best ways for CIOs to cut application development and maintenance costs, and deal effectively with the peaks and valleys of software demands.” (Yeo). Outsourcing to India is still focused primarily on highly technological aspects, but is not limited there. They are known for creative development in the pharmaceutical field, and have recently developed an unsurpassed medication for adult ADHD. Their superior IT assistance is not limited to companies, they offer many websites for individuals seeking help with programming. In mid 2007, U.S. outsourcing to India reached $4.9 billion. Although technologically advanced, they still lag in economic prosperity and therefore still don’t expect the type of compensation that Americans do. “They