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Q 1. What are the advantages and disadvantages to Apple of outsourcing its production to fac- tories in China? 2. What factors influence the choice of countries to which a firm might outsource its production? 3. Is there anything that might cause Apple to eventually shift production back to the United States? 4. Why is Apple more vertically integrated than many other computer makers? 5. What factors will help or impede Microsoft in matching the advantages Apple gains from its vertical integration strategies?

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Answer 1: The advantages that Apple has because of outsourcing its production in China comprises of flexibility and openness of Chinese place of work. The workers of China are ready to work for more number of hours in order to complete the order and this is one advantage as the workers of United States do not wish to work for any extra hour.