Apple Relocation: Data Driven Decision Making (Vietnam And India)

All bets are off when it comes to China. Just ask Apple CEO Tim Cook; he will tell you about the tech giant’s tumultuous experience in China. One day the Chinese government was rolling out the red carpet, providing Apple with significant financial incentives in exchange for their promise to invest in China and help create 300,000 jobs. Soon thereafter, the Chinese government implemented new cybersecurity laws and regulations that enhanced the host government’s control over Apple’s products and services.

Cook recently decided to take matters into his own his hands. Earlier this month, Apple announced that it and will relocate a significant percentage of Apple’s and its contractors to India and/or Vietnam. If nothing else, the experience in China has taught him that a careful and nuanced assessment of the host government’s approach to regulating inbound investment and the technology sector is compulsory when considering potential host countries for manufacturing.

Here, we lay out a 5-step process that companies of all sizes can utilize to help make nuanced decisions in cross-border projects. This case study assumes that Apple will need a comparison of Vietnam and India before it makes its decision.

Step 1: Formulate the question. How does Apple find an alternative host country that shares many of the positive aspects of China’s investment climate while reducing its exposure to certain negative aspects?

Step 2: Determine what criteria are most important when selecting a host country. What are the positive aspects of China’s investment climate that initially drew Apple to establish a major part of its supply chain there?


While there are many things that compel foreign companies to manufacture products in China, two of the primary factors that drew Apple to the Far East were the abundant supply of inexpensive workers and the financial incentives provided by the government. China’s ability to assemble hundreds of thousands of workers within days of the requests has enabled Apple and its contractors to manufacture a significant number of products in a given day; the speed with which the labor supply is convened has also added a layer of flexibility to the process. And because China valued the significant creation of jobs, the government was willing to provide appealing financial incentives to Apple.

Step 3: Define potential deal-breakers. What are the negative experiences Apple had in dealing with the Chinese government and what data points can be used to examine the extent to which these problems are likely to manifest in India or Vietnam?

After Apple established its relationship with contract manufacturers in China, the Chinese government implemented several new laws and regulations to tighten its control over cybersecurity, national security, and related flows of information. These laws and regulations, which were spearheaded by the members of China’s executive organ (China State Party), were an attempt (in part) to monitor and limit the use of Apple’s products. Consequently, this would help the Chinese government’s leverage over Apple and its contractors. These laws hurt Apple and its contractors in two primary ways.

First, it has damaged the Fortune 50 company’s reputation as a beacon of privacy rights and freedom of speech. Heavy-handed policies regulating foreign and domestic businesses are more likely to manifest in countries that do not have an effective separation of powers. More specifically, in countries where the executive branch is more likely to discriminate against foreign investors by implementing regulations that are driven by political concerns and special interests rather than the nuances of the markets that aim to regulate.

In addition to damaging Apple’s reputation, the policies of the executive branch have hurt their bottom line. As part of its “Zero-Covid” policy, leadership has shut down manufacturing facilities throughout the country, leading to significant shortages within foreign companies’ supply chains. For this reason, due diligence on the investment climates in Vietnam and India is mandatory.

Step 4: Aggregate and compare the data. A review of the main benefits of China’s labor force reveals that the sheer supply level of labor force was what primarily drew Apple to China. For this reason, the following assessment will use a database that ranks countries by the size and the skill of the labor force.

*The labor force is comprised of people ages 15 and older that supply labor for the production of goods and services during a specified period.

Step 5: Interpret the data to make a selection that minimizes risk exposure.

A review of the aggregated data reveals that India is the country that will maximize the positives and minimize the negatives associated with doing business in China. However, if Apple were to have a great incentive package or other very compelling reasons to choose Vietnam, this data review would help identify the specific areas that require the most attention. For example, if Apple had a reason to go to Vietnam, the above information would signal that the company needs to work with government officials at the outset of the project, cultivating relationships and minimizing the likelihood that the executive branch will assert its power over other branches to enforce targeted regulations against Apple.

Most companies and consultants that incorporate such data into their decision-making rely on a very reductive approach. While using ranking of political instability and rule of law as proxies for all factors of an investment climate adds value, the expertise of analysts that understand myriad data points is invaluable. These individuals are able to measure nuanced aspects of the host country’s investment climate that account for industry-specific exposures and enable companies to maximize the value of cross-border projects.

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