Explain Why Most Apple Products Are Made Outside The Firm's Home

Apple’s Comparative advantageIntroductionComparative advantage is one of the classical theories created by eighteenth-century economist David Ricardo to explaining the concept of international trade. The scientist believed that different countries have a comparative advantage over others. Michael porter adds to this theory by noting in his diamond model that comparative advantage of nations is derived from five factors: land, location, natural resources, labour and the population size. Countries therefore trade based on their advantages. USA would rather import chemicals from Saudi Arabia, but Saudi Arabia would prefer to import electronics and military equipment from the USA instead of building their own. Apple is among the largest companies in the world by profits. The company outsourced most of its manufacturing to Chinese and Taiwanese companies. This document analyses the comparative advantage and the comparative disadvantages of outsourcing. American firms manufacturing in ChinaManufacturing in the developing countries is lower than in the developed countries like the United States. Companies are therefore moving out to lower their cost of production to allow them to make profits and charge lower prices for their products. China is among the most attractive destination for manufacturers. The list of America firms in China is too long. However,