(The following post is on Outsourcing)
Outsourcing is one of the most well known and most talked about term in the business world. With increasing taxes and higher wages in the US, outsourcing has been reviewed and considered in a variety of different industries. Outsourcing involves moving production of goods to a low wage cost country somewhere abroad. With such a low cost of production of a product, this leads to higher profits. With such cheap labor and production costs overseas, it results in a dramatic drop in the price of the product. Having an advantage in the marketplace leads to a company’s price on a product to become well known which results in an increase in sales and profit. Although outsourcing keeps a company competitive in the marketplace, it could lead to a less efficient way about processing the products. Depending on the industry it may not pay to outsource because with low wages comes many errors and a lot of waste. For smaller products it is very idealistic because the waste is minimal, but for big-ticket items such as TVS and cars the efficiency level of the workers overseas has to be there or else the company will lose a lot of money. A company that I feel that has done an amazing job with incorporating outsourcing into the company is Apple.
Apple over the past 10-15 years has grown dramatically as anyone who is living today knows. With a majority of people owning at least one Apple product they are hear to stay. One reason why I feel that they are on top is because they do such a good job keeping their overseas operations very efficient. When Microsoft came out with their beta tablet on Monday and they ended up having many problems with different parts on it, the biggest being the track pad on the case would not work correctly. Microsoft wanted to build attention for its product and unveil it to the public but it has now created a race between all companies that are making tablets. Apples operations overseas are vast and have a never-ending supply of material to product products. Outsourcing is here to stay as long as other parts of the world offer cheap and quality labor.
As effective as outsourcing certain goods production is today I wonder what will happen over time as many of these low wage worker’s quality of life improves. A company like Apple, rightfully so, relies on outsourcing many of its products assembly, but what would happen if the standard wages of its outscored workers rose dramatically? I personally love Apple products, but if they were significantly more expensive I’m not sure I would buy them.
outsourcing is a big trend in todays economy. I believe that apple does a great job with developing its products and an even better job at hoarding its millions of dollars it has on its books. I believe that even if apple is outsourcing to cut down on labor cost that they should still pay their workers a considerable amount above what others are making and thats just simply because they can. As you said almost everyone has at least one product and apple isn’t going to stop bringing in revenue anytime soon so they may as well do something generous for those who are putting in long hours to support their company.