Reference no: EM132641424

"Apple's U.S. iPhones can all be Made Outside of China if Needed"

Apple Inc. has a backup plan if the U.S.- China trade war gets out of hand. Hon Hai, known also as Foxconn, is the American giant's most important manufacturing partner. It will fully support Apple if it needs to adjust its production as the U.S.-Chinese trade spat gets grimmer and more unpredictable, board nominee and semiconductor division chief Young Lie told an investor briefing in Taipei on Tuesday.

Twenty-five percent of our production capacity is outside of China and we can help Apple respond to its needs in the U.S. market," said Liu, adding that investments are now being made in India for Apple. "We have enough capacity to meet Apple's demand.

It would be relatively easy to shift final assembly of the iPhone outside China, but moving to full production of the components and the whole handset would be much tougher Mawston," said..

It's unclear if India will ever become a major production base for Apple's marquee device. Foxconn is now running quality tests for the iPhone Xr series there and plans to begin mass production at a facility in the suburbs of Chennai. Older models are already assembled at a Wistron plant in Bangalore.

Foxconn has also agreed to build a 13,000-worker facility in Wisconsin in exchange for more than $4.5 billion in government incentives. But that project has since come under criticism for low-paying jobs, sudden dismissals and ever-changing goals. On Tuesday, executives reaffirmed that employment goal, saying construction remained on schedule and that it will hire as many as 2,000 Americans by the end of 2020.

It will also start making networking and server products for the U.S. market by the end of next year, on top of LCDs starting next year, Liu said.

1. Identify both the key issues and the underlying issues. In identifying the issues, you should be able to connect them to the business principles which apply to this situation.

2. Discuss the facts which affect these issues. The case may have too much information. Filter the information and discuss those facts which are pertinent to the issues identified above.

3. Discuss your tentative solution to the problem and how you would implement your solution. What actions would you propose to respond to the situation, based on the knowledge you have gained in this course?

4. Discuss follow-up and contingency plans. How will the organization know that your proposed solution is working? What should they do if it does not work?

Identify the issues for Apple Inc. pertaining to the trade embargo. What capacity planning should Apple adapt? Explain your answer in detail.