In your opinion, why Apple totally outsource its manufacturing to Foxconn. What are Apple’s key advantages in how it manages its supply chain operations?

What are the challenges that Apple faces in the future and what are the implications for its supply chain? For examples, the effect of COVID19 to the supply chain, trade
war between China and USA, continuous lockdown in some Chinese cities, congestion in major ports during the pandemic, insufficient supply of microchips from TSMC etc.

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Apple Inc. is one of the world's largest technology companies, with annual revenue more significant than the GDP of countries, including Kenya and Tanzania combined. In 2019, the company attained an income of over 200 billion dollars, and it is one of the companies with a well-defined strategy. Apple's success did not start overnight, as it is a journey that began with Steve Jobs, a college dropout who changed the way people view computer technology. Steve Jobs was a leader and a visionary; he developed an idea into a multi-billion business. Jobs was a man that could change the world many times over. However, his successor, Tim Cook, is well-defined and more oriented than he was. Steve Jobs brought Tim Cook into the company in 1998 after his return to Apple, and since then, he enabled a business that was crushing to grow even more significantly. The leadership of Cook is seen by the company's leadership and competitive strategy in the sector. He introduced the Apple Watch, Airpods, and Siri products that have continued to increase its income even further. Apple has many products; however, this does not mean that these products are sold in the same way or in the same market. Apple's PC market differs from the iPhone market, and more importantly. the products' marketing strategies differ significantly. The Mac Pro was promoted based on value and designed for experienced people who needed to build high bandwidth capabilities. Apple's mp3 player was created for music lovers who loved music but could not manage the stress of carrying CD cassettes. The Mp3 player completely redesigned how people listened to music. Likewise, Apple's first mobile phone targeted both the phone market and the iPod market. These were the people who needed their music players but could not deal with the pressure of carrying both the music player and their phones. Another factor that made the iPhone popular is that it introduced an easy-to-use mobile phone software. Apple has many other products, including the iPad and Apple Watch; however, two elements remain consistent in all these products: simplicity and differentiation. Apple has an extensive network of third-party suppliers in its supply chain. According to recent research, Apple has 785 suppliers in 31 countries worldwide, 349 of which are based in China. According to Apple's "2015 Supplier List", 97% of its supply chain (including procurement, manufacture and assembly) is accounted for by its top 200 suppliers. This would imply that 585 of Apple's suppliers account for the remaining 3% of its supply chain, providing it with a significant degree of latent capacity. Apple has a number of exclusive long-term agreements with its key suppliers and uses prepayments to negotiate favourable pricing terms, secure strategic raw materials and guarantee high volumes of production. Apple designs all its products in Cupertino, California but totally outsources its manufacturing. Apple overcomes its uneven supply problem by allowing Foxconn to assemble its products in China. Foxconn is a Taiwanese multinational electronics contract manufacturer established in 1974 with headquarters in Tucheng, New Taipei City, Taiwan. In 2021, the company's annual revenue reached 5.99 trillion New Taiwan dollars (US$175 billion) and was ranked 20th in the 2022 Fortune Global 500. It is the world's largest technology manufacturer and service provider. While headquartered in Taiwan, the company is the largest private employer in the People's Republic of China and one of the largest employers worldwide. Foxconn manufactures electronic products for major American, Canadian, Chinese, Finnish, and Japanese companies. Foxconn has assembly plants in China, Europe, India, Japan, Malaysia, Mexico, South Korea, Brazil and USA. As of 2011, Foxconn had at least seven factories in the Johor state, at Kulai, where it is developing an industrial park that includes four factories that comprise fully automated assembly lines as well as fully automated packaging lines. The company targets a consumer base that appreciates simple and unique products with great value. This generic go-to-market strategy allows it to gain a competitive advantage over other companies, including Samsung. Apple distributes its product via its online store, Apple Reseller and physical Apple Store in major cities. Apple Inc. is one of the world's largest technology companies, with annual revenue more significant than the GDP of countries, including Kenya and Tanzania combined. In 2019, the company attained an income of over 200 billion dollars, and it is one of the companies with a well-defined strategy. Apple's success did not start overnight, as it is a journey that began with Steve Jobs, a college dropout who changed the way people view computer technology. Steve Jobs was a leader and a visionary; he developed an idea into a multi-billion business. Jobs was a man that could change the world many times over. However, his successor, Tim Cook, is well-defined and more oriented than he was. Steve Jobs brought Tim Cook into the company in 1998 after his return to Apple, and since then, he enabled a business that was crushing to grow even more significantly. The leadership of Cook is seen by the company's leadership and competitive strategy in the sector. He introduced the Apple Watch, Airpods, and Siri products that have continued to increase its income even further. Apple has many products; however, this does not mean that these products are sold in the same way or in the same market. Apple's PC market differs from the iPhone market, and more importantly. the products' marketing strategies differ significantly. The Mac Pro was promoted based on value and designed for experienced people who needed to build high bandwidth capabilities. Apple's mp3 player was created for music lovers who loved music but could not manage the stress of carrying CD cassettes. The Mp3 player completely redesigned how people listened to music. Likewise, Apple's first mobile phone targeted both the phone market and the iPod market. These were the people who needed their music players but could not deal with the pressure of carrying both the music player and their phones. Another factor that made the iPhone popular is that it introduced an easy-to-use mobile phone software. Apple has many other products, including the iPad and Apple Watch; however, two elements remain consistent in all these products: simplicity and differentiation. Apple has an extensive network of third-party suppliers in its supply chain. According to recent research, Apple has 785 suppliers in 31 countries worldwide, 349 of which are based in China. According to Apple's "2015 Supplier List", 97% of its supply chain (including procurement, manufacture and assembly) is accounted for by its top 200 suppliers. This would imply that 585 of Apple's suppliers account for the remaining 3% of its supply chain, providing it with a significant degree of latent capacity. Apple has a number of exclusive long-term agreements with its key suppliers and uses prepayments to negotiate favourable pricing terms, secure strategic raw materials and guarantee high volumes of production. Apple designs all its products in Cupertino, California but totally outsources its manufacturing. Apple overcomes its uneven supply problem by allowing Foxconn to assemble its products in China. Foxconn is a Taiwanese multinational electronics contract manufacturer established in 1974 with headquarters in Tucheng, New Taipei City, Taiwan. In 2021, the company's annual revenue reached 5.99 trillion New Taiwan dollars (US$175 billion) and was ranked 20th in the 2022 Fortune Global 500. It is the world's largest technology manufacturer and service provider. While headquartered in Taiwan, the company is the largest private employer in the People's Republic of China and one of the largest employers worldwide. Foxconn manufactures electronic products for major American, Canadian, Chinese, Finnish, and Japanese companies. Foxconn has assembly plants in China, Europe, India, Japan, Malaysia, Mexico, South Korea, Brazil and USA. As of 2011, Foxconn had at least seven factories in the Johor state, at Kulai, where it is developing an industrial park that includes four factories that comprise fully automated assembly lines as well as fully automated packaging lines. The company targets a consumer base that appreciates simple and unique products with great value. This generic go-to-market strategy allows it to gain a competitive advantage over other companies, including Samsung. Apple distributes its product via its online store, Apple Reseller and physical Apple Store in major cities.

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Apple outsources its manufacturing to Foxconn due to several reasons Firstly outsourcing to a company like Foxconn enables Apple to focus on its core competencies such as design and marketing while Fo... View the full answer