Final answer:
Outsourcing is the approach taken when a product is developed by an external company, a strategy many businesses adopt to reduce costs and leverage specialized skills. This process can be extended to offshoring, where parts of a company's operations are moved overseas.
Step-by-step explanation:
When an external company is contracted to develop a product, the approach being taken is known as outsourcing. This is a business strategy utilized by companies to hire outside contractors to perform tasks that could be done internally but are instead handled by external organizations, often to reduce costs or access specialized expertise. The design and manufacturing process may involve multiple stages, including finding suppliers for components, setting up manufacturing systems for the product, and establishing a sales and marketing team. Outsourcing can also include sending operations offshore to countries with cheaper labor markets.
Globalization has made outsourcing and offshoring prevalent in modern business practices, as demonstrated by companies like Apple, which creates designs in one country, manufactures components in others, assembles the product in another, and even outsources tech support services to different countries. This creates global assembly lines and reflects a strategic shift in production and services.