Apple : TNC

Question 1

Nature & history of apple:

Answer 1

• Started in 1976, took over the Macintosh organisation
• 98,000 employees
• 450 retail stores in 16 countries
• Predominant market in richer countries, however recently has been rapidly growing in the Asia-Pacific region

Question 2

Spacial organisation:

Answer 2

• Headquarters in California
• Production in China
• Over 450 stores worldwide, mainly in Europe and USA

Question 3

Headquarters

Answer 3

R&D and data centres mainly located in Silicon Valley, California
European HQ in Cork, Ireland
Mainly based in developed countries due to the knowledge-intensive nature of the business

Question 4

Production

Answer 4

Outsourced to the Foxconn company, China

Question 5

Why do apple produce their products in China?

Answer 5

• Large source of high skilled, hard-working, low-paid workers
• Numerous countries competed for the Apple manufacturing contract, lowering production costs
• Shenzhen was China’s first SEZ offering a number of incentives

Question 6

Why did Apple chose to locate in Ireland?

Answer 6

• 12.5% corporation tax which is the second lowed in the EU

Question 7

Tax practices

Answer 7

Accused of corporate tax avoidance by using subsidiary firms in other countries to pay a lower rate of tax.
Caused tension between the EU and USA as both claimed Apple owed them tax on their profits.

Question 8

Environmental issues:

Answer 8

• Reliant on non-renewable energy resources
• Use of toxic chemicals in their manufacturing
• Factories discharging pollutant, contaminating water supplies
• Lack of recyclability of Apple products

Question 9

How has apple responded to the environmental concerns?

Answer 9

• Now uses 75% renewable energy
• Invested in large solar farms to power its data centres
• Removing PVC plastics and chemicals from its products

Question 10

Positive impacts for the USA:

Answer 10

• Provides high paid jobs

Question 11

Negative impacts for the USA:

Answer 11

• Jobs focused only at high skilled workers

Question 12

Positive impacts for Ireland :

Answer 12

• Employs 4,000 workers + 2500 along the supply chain
• Contributed to infrastructure improvements in the area
• Attracts investments from other TNCs

Question 13

Negative impacts for Ireland:

Answer 13

• Accused of not providing enough jobs for local people

Question 14

Positive impacts for China:

Answer 14

• Encourages investment

- Generates jobs and income

Question 15

Negative impacts for China:

Answer 15

• Poor working conditions
• Overtimed work
• 2010, 50 workers were poisoned by a cleaning chemical