Apple TNC Case Study

Question 1

Where are Apple’s headquarters?

Answer 1

-Cupertino, Northern California near Silicon Valley (Cost $5bn)

Question 2

Value of apple

Answer 2

-Apple is no1 global brand by value and is worth $145bn

Question 3

Markets

Answer 3

-44% of all sales in USA
-Most rapid growth in recent years has been Asia Pacific region

Question 4

Background on Apple

Answer 4

-US TNC: headquarters based in Cupertino, Northern California
-Started business in 1976, since 2000 has experienced phenomenal growth
-Number 1 global brand by value
-98,000 full time employees

Question 5

Spatial organisation of Apple

Answer 5

-Main products are designed in Silicon Valley California and made in mainland china by Foxconn
-Products sold worldwide but most concentrated in developed (44% all sales in US)
-Main production is Foxconn in Foxconn city

Question 6

Why are products produced in China?

Answer 6

-Large source of highly skilled, low paid workers
-Generates jobs and investment for China
-Foxconn City is a business park, containing high security and workers live and work onsite in dormitories

Question 7

Apple in Cork, Ireland

Answer 7

-Only fully owned manufacturing facility in the world
-Apple was lured to locate in Ireland because of 12.5% corporation tax
-Employs 4000 workers
-Apple accused of using tax avoidance and recieving favourable treatment of tax from Irish government
-apple uses subsidiary firms (Foxconn) in other countries to avoid tax

Question 8

Why did Greenpeace criticise apple?

Answer 8

-Reliance on non-renewable resources to supply electricity
-Use of toxic chemicals in manufacturing (apple sued by Chinese workers in 2010, after 50 workers poisoned by a toxic chemical used to clean IPad screens)
-factories in china discharged pollutants into water supplies, threatening public health
-Lack of recyclability of many Apple products

Question 9

How has apple changed its environmental practices?

Answer 9

-Now uses 75% renewable energy from solar farms
-removed toxic chemicals from production
-promotes recycling of products

Question 10

How has apple responded to issues in china?

Answer 10

-Now has a supplier code of conduct which supplier factories must adhere to
-‘suicide nets’ and made workers pledge they would not kill themselves after 14 suicides in 2010, linked to poor conditions