Impact of Globalization
Who made my iPod?
1: Open the Powerpoint document labelled GCSE Toolkit going
global.ppt2
2: Use an internet search engine to find the definitions of the
following terms:
a)
b)
c)
d)
Primary Production
Secondary Production
Tertiary Production
Quaternary Production
3: Indicate with a tick  which sector of industry each business is
in
Business
Primary
Insurance
Forestry
Coal-mining
Computer
assembly
Travel
agency
Brewery
Car
showroom
Consultancy
Research
and
Development
Secondary
Tertiary
Quaternary
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4: Global supply chain of the iPod1
Tasks
1: In 2007, an Apple iPod sold for US$299. Determine the the level of
profit (price minus costs) that Apple Inc make if they face the
following cost base.
Costs
a) Portal Player licenses the processor core design for their
microchip from ARM, a UK-based company. ARM charge
approximately US$1 per chip.
b) Over 400 low cost components (such as capacitors and
resistors) are needed to make an iPod. The combined value of
these components is US$21.28.
c) Ten high-value components, with a combined value of
US$23.12, are needed to make one iPod.
d) The iPod is assembled in China by the Taiwanese company
Inventex. Insertion, testing and assembly is worth US$3.70 per
iPod.
e) The most expensive component in an iPod is the 30GB hard
drive. This is made by the Japanese company Toshiba in either
China or the Philippines. It is worth US$73.39.
f) iPods are sold in shops around the world; many in the USA and
UK. The distributor receives US$30 of the value of each iPod for
transporting them.
g) The microchip that controls video playback is another
expensive component. This is made by the US company
Broadcom in Taiwan or Singapore. It is worth US$8.36.
h) The second most expensive component in an iPod is the
display. This is made by Toshiba Matsushita in Japan and is
worth US$20.39.
i) Another expensive microchip manages the iPod’s functions.
This is made by the US company Portal Player in the USA or
Taiwan. It is worth US$4.94.
j) iPods are sold in many different shops – in the US you can even
buy iPods in Walmart. The retailer receives US$45 for every
iPod it sells
Activity adapted from Linden, Kraemer and Dedrick (2007) ‘Who captures
value in a global innovation system? The case of Apple’s iPod’, University of
California.)
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2
Fill in the table below with the relevant information
Cost of Production
Production Sector Cost in US$
Total
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2: (a) What is the level of profit as a % of revenue? Formula:
Profit/Price x 100
(b) What is the level of profit as a % of costs? Formula: Profit/Costs
x 100
3: The following companies are some of Apple Inc’s partners in the
production of the iPod.
a) Silicon, a raw material, is essential for the production of
microchips. The Norwegian company Elkem is a major
producer of silicon.
b) The raw material aluminium forms a major part of an iPod’s
hard drive. The Canadian company Rio Tinto-Alcan is the
largest producer of aluminium in the world. Their biggest
smelter is in Tomago, Australia.
c) Old iPods can be recycled. In the US Apple Inc has a recycling
partnership with Cupertino, in California.
Visit these companies’ websites and find what their mission
statement is. Import this into the table
Organization
Mission Statement
Elkem
(https://www.elkem.com/)
Rio Tinto Alcan
(http://www.riotinto.com/aboutus/aboutrio-tinto-5004.aspx)
(a) In your opinion, which of the two mission statements is more
socially responsible? Explain.
(b) Following this, determine if each firm has a Corporate Social
Responsibility policy that is linked to sustainability. Summarize, in
your own words, what, if any, this sustainability policy entails.
(c) Investigate Apple Inc’s links with the city of Cupertino in
California. Write a paragraph, in your own words, how the
relationship between the two entities has been mutually beneficial
(benefits both parties)
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4: Global division of labour: a way of organising work, especially
making things, so that it is done as a set of separate processes by
different (groups of) people
a) Does your iPod case study suggest that there is a global
division of labour? If so, why?
b) How does this compare to the way products were made 50
years ago?
5: Worldmapper
a) Go to the website Worldmapper – www.worldmapper.org
b) Select the category ‘manufacturers’. This will result in a list
including ‘Manufacturers Maps’.
c) Select a map you wish to view; this could be for example, ‘Car
exports’.
d) Copy the relevant map into your word document.
Answer the following questions in relation to your chosen map.
1. How can the global division of labour be described?
2. Do you think that these patterns will stay the same, or will they
change in the future?
3. What impact do you think that the global recession (economic
crisis/downturn in the global economy) has had on these
trading patterns?
4. Do you think that having a global division of labour is a good or
a bad thing? Why?
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