Money is power. A phrase many children hear while growing up. Parents may try to deny this to their children however, in the deal with GT Advanced Technologies, Apple made clear that they are the more powerful company and that Apple will be setting all the terms of the agreement.

            GT Advance Technologies is a sapphire production company that supplies the material for a variety of LED lights. Apple initially orchestrated the deal with GT Advance Technologies because LED lights consist of 80% sapphire therefore it would be beneficial for Apple to have a cheap sapphire supplier to minimize production costs in the long run.

            This is a classic case of corporate giants strong-arming smaller companies due to the size of their respected legal departments. Apple’s enormous size allowed for it to tie up the entire legal team of GT Advance Technologies with negotiations; thus preventing GT Advance Technologies from making any other deals with other potential clients. Then when Apple threatened to pull out of the deal GT Advance Technologies was forced to accept the terms set by Apple. This technique played to the business ethical side of the executives at Apple, they may have achieved a good deal in this negotiation however Apple’s image has been tarnished into a hostile company which might prevent future profiting deals to occur.

If you would like to learn more about the issue fell free to read to full article by clicking here.

-Gurinder Mahal

Works Cited:

Randewich, Noel. “GT Advanced Says It Fell Victim to ‘bait-and-switch’ by Apple.” The Globe and Mail. SAN FRANCISCO — Reuters, 7 Nov. 2014. Web. 7 Nov. 2014. <http://www.theglobeandmail.com/report-on-business/international-business/us-business/gt-advanced-says-it-fell-victim-to-bait-and-switch-by-apple/article21510683/>.