The Trade War Effect. How Apple and Hewlett Packard (HP) Navigate Supply Chain Risks in a Geopolitically Unstable World

Abstract

The ongoing trade war between the United States and China has created significant uncertainties in global production networks and supply chains, forcing multinational corporations to rethink and adapt their strategies in response to an increasingly unstable geopolitical landscape. This thesis investigates how two leading American technology companies, Apple and Hewlett Packard (HP), have responded to these challenges. Using a qualitative case study approach based on Global Value Chain Theory, Transaction Cost Theory, and Risk Management frameworks, this study concludes that both companies acknowledge the significant risks resulting from the increasing trade tensions and are actively planning and performing diversification efforts beyond China. However, despite these efforts, HP and Apple are still deeply dependent on the Chinese manufacturing network. Additionally, this thesis highlights the realities and practical limitations the MNCs face when attempting to diversify its global production operations, along with decoupling from “the world's factory”, China. The findings show that in today’s volatile global economy, strategic flexibility and resilience are essential, but the actual implementation does not come without challenges.