Apple Marketing Strategies and CSR

Corporate Responsibility and Marketing Strategies

The ethical and social responsibilities lie at the forefront of any company's public image. That image is becoming increasingly more important to uphold as external pressures become more powerful. These ethical questions and challenges have to be faced every day. The issue of ethics is wide encompassing including all aspects of business from basic hiring of employees up to advertising claims. Companies rely on honest employees to represent a trust worthy image for the company including the business's goals and objectives (Munson, 2014; Gibbs, 2014).

The purpose of this paper is to look at the Apple Corporations standing on ethical and social responsibilities, and to deduce whether or not they have upheld their official ethics code of conduct. An examination will be included regarding Apple's suppliers and the violations of both ethical and legal labor laws that they stand face with. Along with that come the important impacts the suppliers have on Apple as a whole. I will also include recommendations for how the corporation can ensure that their suppliers maintain the standards set by the corporation. The increase of wages and the impact on sales will be considered. Finally, the paper will look at the overall marketing strategy and give a recommendation for how to improve their global presence.

1. Examine Apple's current position on the company's ethical and social responsibilities, and determine whether or not the company has met these responsibilities. Provide two (2) examples that support your position.

Apple is committed to transparency, a reduction of negative environmental impact, as well as the safety and well-being of its employees. As part of their commitment was a promise to the public to make any information regarding violations of these standards publicly known. Unfortunately for Apple though, an audit was performed in China that discovered various human rights violations. Important documents were being hidden and employees were threatened to give proper responses to auditors (Sethi, 2012; Gibbs, 2014).

Creating high-quality product as well as being driven by innovation is how Apple measures success. Furthermore, that also includes the ability to provide dependable services and the demonstration of integrity across all business aspects. The potential for business misconduct is high with Apple's suppliers because they are located in nations with low labor costs and nonexistent working standards. To work around this issue Apple requires each supplier to sign a legally binding code of conduct to make sure that they will comply. Additionally Apple is able to refuse business with any company on basis of ethics (Sawayda, 2011).

The ten Foxconn suicides in China that took place in 2010 led to an investigation. It discovered many violations of Apple's ethics code that included child labor and toxic environments (Villefranche, 2011). Recent media reports that Apple is re-envisioning their public do-gooding, and their new vision supposedly includes CSR. One of the values that Apple needs to retain in I's product is the cool factor since it places the consumers into a select group. Even though Apple has been long due for CSR, it is not the "Apple Way" to enact donation matching (Chun, 2011).

While the corporation isn't the first in the industry to launch environmental campaigns, they are ahead in the way that they have transformed the core of their mission. Sustainability has become Apple's new focus and the power consumed by the corporation has dropped 57% in the last 6 years as a result. They are the manufacturers of the world's most efficient desktop computer: the Mac mini. The MacBook Air is also most energy efficient among its competitors. Additionally Apple recycles over 90% of material that did not originate with them and the total weight of products sold adds up to 85% of recycled material (Werth, 2014).

2. Determine the impact that the publication of ethics and social responsibilities violations made by Apple's suppliers has had on Apple's reputation. Support your response with examples of the impact in question.

Working conditions was the focus of a scandal involving one of Apple's largest suppliers. The supplier operates in over 40 centers for development and research and maintains facilities on 3 different continents: Asia, Europe, and North America. Based on Apple's response they don't seem too concerned with the situation since they are manufacturing products faster than ever. In fact, they produce more electronics at a faster pace than any of the competitors on the market. Apple has posted information and report on their home site that demonstrates their commitment to maintaining its ethics policies. This can only be summed up as a farce to retain their loyal customer base (Didovych, 2013). Pegatron Group is another major Apple supplier that has been the perpetrator in many ethics violations as reported by the China Labor Watch (CLW). The investigations showed over 80 labor rights violations which included both legal and ethical transgressions. There were 15 categorizations of the violations: hiring discrimination, underage labor, dispatch labor abuse, women's rights abuse, insufficient worker training, insufficient wages, contract violations, poor living conditions, poor working conditions, ineffective grievance channels, management abuse, excessive working hours, difficulty in taking leave, toxic working environments, and labor and safety concerns. It is clear that Pegatron is in violation of corporate ethical procedures. Apple has boasted in recent years that its suppliers are upholding 99% compliance with a 60-hour work week rule that they had instigated (China Labour Watch, 2013). It is relatively unclear whether or not this information is accurate.

It is disturbing to see Apple continuing to do business with Pegatron even though they have had their numerous violations exposed. There is a zero tolerance policy for product quality in the Apple corporation, and all issues are immediately and effectively resolved. Labor rights abuses seem to not be very important at all though due to the corporation's inaction to years of consistent and reported violations by its suppliers.

Apple has not lived up to their standards and is currently making conditions worse for employees by allowing suppliers to have oppressive power over them (China Labour Watch, 2013). Chengdu, Foxconn, and Pegatron are just three of Apple's suppliers that have been proven to violate sever worker rights laws and Apple's ethics policies. Due to their consistent business with Apple it seems that the corporation never did care about worker's welfare. Apple has only cared about improving product quality and decreasing costs (Kaiser, 2012).

Apple is a company with impressive achievements given that it was able to rise from the poor shape the company was in 1997 to the multi-billion dollar corporation it is today. Just like many other big businesses in the world, Apple is also pressured by the five different operational procedures and external strategies: investor community, civil society organizations, loyalty to the consumer base, best organizational practice, stakeholder expectation, and governmental pressures. There have been many reports outlining the horrendous conditions of Apple suppliers which have led to multiple suicide attempts and dangerous conditions for workers (Sethi, 2012; Gibbs, 2014).

3. Suggest two (2) methods that Apple can utilize to ensure that its suppliers adhere to wage and benefits standards going forward. Justify your response.

Allowing independent monitoring of suppliers

Apple should allow third party monitoring of all of its suppliers in order to keep them in line. This would be a smart move, especially to curtail the criticism directed towards the Asian facilities that are pumping out iPads, iPhones, and Apple (AAPL) at a record pace. Additionally, Apple is in definite need to make a move in order to address the worldwide criticism they are receiving since they are member of the Fair Labor Association. At the same time their decision to clean up their suppliers should also face the challenges that all global corporations deal with in protecting their brands from abuse. It'll take more than just opening the corporation's doors to unbiased third parties in order to ensure the improvements of working conditions. FLA criteria, including independent inspections, audits, and code of conduct enforcing should all be what Apple and its suppliers should subject themselves too. The enforced code of conduct would be both drafted and approved by the UNILO (United Nations International Labor Organization), and this course of action would force Apple to take responsibility for its labor rights violations (May & Boudreau, 2012).

Supply Audits

Supply audits are another method Apple could use in order to enforce ethical behavior by its suppliers. The audits will result in information of whether or not employees were paid on time, as well as if they have been treated properly. Unfortunately one of the violations discovered amongst the many supplier controversies was the withholding of monetary funds as a form of discipline for the employees. Apple did perform mass audits for a million employees in 2012 which focused on the inclusion of environment and safety (Supplier Responsibility at Apple, 2013; Gibbs, 2014).

4. Determine whether or not you believe that Apple's customers would be willing to pay more for its products if Apple had to increase selling prices in order to provide better wages and benefits for suppliers' workers. Provide a rationale for your position.

A decision-making scale is present in the mind of every customer. The one side of the scale is composed of vital issues that lay heavy on the customer's organization. These issues could be as small as manufacturing cost, but also as large as delivery, productions costs, maintenance, distribution cost, marketplace image through quality amongst others. In order to properly defend and justify pricing, a corporation needs to be well aware of these issues and concerns. More than that though, each individual concern that the customer base comes up with has an associated economic, and often times, psychological cost as well. These are things that require the corporation's attention in order to continue to flourish as a business (Seeley, 2015).

The way that the individual is perceived is power that Apple products have to influence. Apple products have become not only fashionable in design, but also a pop culture image that speaks about the person. The corporation is masterful in manipulating the image of the products in order to influence people. The Apple competitor commercials showing the lack of lines to buy their product demonstrates this fact (Seeley, 2015). Apple has a large loyal fan base that connect while standing in line for the newest iPad. Not only has Apple discovered customer needs, but they have a very professional way in making sales happen. The sales professionals must be able to communicate why the product is worthwhile (Seeley, 2015).

In the long run I don't support the idea though that Apple products would sell as well if price was increased. Even if the justification was to pay poor workers. The reason given for this is that the competition, like Samsung, is to good and well-known for their products quality (Guardian LibertyVoice, 2013). The big difference between Apple and Samsung is that Samsung offers competitive products for lower pricing (Boulware, 2013; Gibbs, 2014). Cost is by far the most important factor to the average consumer. March 2013 showed a triple in Samsung profits with them reaching over 20 billion dollars in a quarter. Apple won by a landslide though since they earned over 100 billion (Boulware, 2013; Gibbs, 2014). This demonstrates that Apple is more attractive to consumers (Boulware, 2013; Gibbs, 2014).