Choose a company that is involved in international business activities - Essay Example

Effects of Political environment on Apple Inc The case of Coltan conflicts Apple Inc. is well established and has establishments in almost all parts of the world. Apple Inc. produces personal computers, computer software, cell phones and other consumer electronic gadgets (Weebly, 2014). Apple boasts of world renowned products such as the iPhone, iPod, Mcintosh computers and the iPad. The company started in 1976 and has continued to thrive because of its products that have gained popularity among the youth in United States and across the world.

However, the progress of the company to present has been marred by numerous problems in its economic, political, technological and social environments. The recent conflicts in the coltan mining Congo have greatly affected the company in numerous aspects (Smith, 2013). Coltan is Columbo-tantalite substance that is used in the production of the modern electronics including smartphones (Richard & Kathreen, 2014). This product is essential in the production of electric capacitors that are used in smartphones because of their capability to hold high electric charges (Cellular news, 2014).

The Democratic Republic of Congo (DRC) has the largest world reserve of coltan, and its production has recently been affected by conflicts between DRC soldiers and M-23 militia rebel group (Smith, 2011). The M-23 militia consisted of Rwandese and Ugandan soldiers. This conflict evolved when the M-23 wanted to gain control over the coltan mining areas in DRC (Weebly, 2014). Though the mining of coltan is not large scale, it is mined by a group of men who dig huge craters in streambeds and scrap the dirt in order to get to coltan.

The M-23 was involved in the smuggling of coltan from DRC to the neighboring nations. The neighboring countries such as neighboring Rwanda were accused of selling smuggled coltan though there is no coltan available in the country (Smith, 2011). This conflict in the late 2011 caused a decrease in the supply of coltan and an increase in the prices of coltan. Though there are other nations that produce coltan, DRC is the second largest producer and reserve of coltan after Australia (Marlow & Akkad, 2011).

The decreased supply of coltan resulted to increased prices that increased the production costs of Apple Inc. by 20% (Weebly, 2014). However, continued conflicts in the area may result to increasing costs of production and may also affect the production level of the company. Additionally, reports by the United Nations indicate that there is a need to institute regulations to limit the production of coltan from conflict-prone areas in order to reduce the conflicts that result to a high cost of production (Marshall, 2014).

It is estimated that the company lost 10% in profits due to the increased cost of production (Webly, 2014). This conflict also resulted in increased product prices that the company imposed at the start of 2014. In order to ensure that the company progresses, Apple together with other computer production companies such as IBM and Cisco have come together to ensure that something is done about the conflict-prone region such as institution of laws that would restrict the conflicts that would not disrupt the production of coltan and ensure smooth running of the companies (Cellular news, 2014).

ReferencesCellular News. (2014, January). Coltan, Gorillas and cellphones. Retrieved from http://www.cellular-news.com/coltan/Marlow, I., & Akkad, O. (2011, December 8). Smartphones: Blood stains at our fingertips - The Globe and Mail. Retrieved from http://www.theglobeandmail.com/technology/smartphones-blood-stains-at-our-fingertips/article1318713/Marshall, R. (2014, April 23). Ethical electronics: how Apple, Intel and more are stamping out conflict minerals | News | TechRadar. Retrieved from http://www.techradar.com/news/world-of-tech/ethical-electronics-how-apple-intel-and-more-are-stamping-out-conflict-minerals-1227728Richard Shaw; Kathryn Goodenough.

"Niobium-tantalum". British Geological Survey. Retrieved 24 May 2014.Smith, J. H. (1 February 2011). "Tantalus in the Digital Age: Coltan ore, temporal dispossession, and "movement" in the Eastern Democratic Republic of the Congo". American Ethnologist 38 (1): 17–35.Smith, S. J. (2013, July 21). The conflict mineral: coltan mining in DR Congo and Australia | The Strategist. Retrieved from http://www.aspistrategist.org.au/the-conflict-mineral-coltan-mining-in-dr-congo-and-australia/Weebly. (2014). Apple and the Congo - Apple and the Democratic Republic of the Congo.

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