Corporate Responsibility and Marketing Strategies Essay
Corporate Responsibility and Marketing Strategies
I believe Apple Inc. [mostly referred as “Apple” in this document] has met the ethical and social responsibility towards general public, employees, customers and shareholders/investors. Apple positions itself to be very environment conscious and continuously working to reduce the foot print of the company and its products on the planet (Apple Inc.). Apple has a recycling program for its used products; it sends gift cards to customers in return for the used products, if the products do not have any monetary value they recycle them responsibly.
Apple reports the environmental foot-print of each of its product on their website to show how much energy efficient they are and how Apple is choosing more biodegradable elements in its products, packaging and facilities. Apple has multiple offices and datacenters in United States and as of March 2013 seventy five percent of them are fully powered through renewable energy sources (Kastrenakes, 2013). Apple is continuously trying to improve the situation and aiming to rely entirely on renewable energy sources in future.
To improve ethical awareness within its employees, Apple has a business code of conduct published and easily available via intranet website within the company and to its investors via shareholder website (Business code, 2012) which explains in detail on various topics including its well known secretive way of releasing its products. Apple also has a Business conduct helpline available for its employees to resolve ethical dilemmas, report conflicts of interest and seek direction in making ethical decision. Recently Tim Cook, Apple CEO has reminded all employees to review Apple’s business conduct policy via corporate email (Marie, 2013) which shows the importance Apple gives to Ethics within the company. Apple treats its employees very well; pays pretty good salaries to employees and rates to contractors, Apple’s has a very good benefit program for its employees, even the part-time employees are entitled to benefits at apple (Fiegerman, 2012), it provides shuttle service to many locations from many places in Bay area to campus.
Apple products are very safe compared to many other competitor products, Apple pays attention to details, e.g.: To avoid tripping over a charging cable, Mac book charger has a magnet instead of a hard stick in plug as we observe in many Windows PCs. All of its products are well thought and provide lot of convenience and consider customer health and safety, as we see in the case of latest ear phones from Apple, they have the speakers going sideways instead of directly in to ears as most of the conventional ear plugs do, this restricts music directly hitting the ear drum and long term exposure may have adverse impact on the ears. Apple products are well sealed and static resistant, the materials used in production are not cheap and low quality parts, which improves the durability of its products. Apple provides lot of variations in products to choose, to a customer which attracts customers at all levels.
There are about ten to twelve flavors of latest iPhone based on color, size of memory and external material. Apple has a very good refund policy, items can be returned online or returned in store, there is about 14-30 days to return items, Apple provides full refund instead of charging for re-stocking fee. If there is a part malfunction, apple product can be exchanged for a new one within one year of purchase for nominal or zero price. Apple considers customer’s complaints and response rapidly by multiple means and aims to delight the customers (Denning, 2011). Apple listens to customers at the stores, online and also via telephone and improvises on its services, customer support and also their products.
It is very obvious that Apple takes good care of its shareholders; we can clearly observe that from Apple’s revenues and profits from past several quarters, Apple’s share has gone up five times within past five years. Apple provides all of its quarterly, annual reports along with financial statements and exhibits with SEC and complies with SEC policies.
Publications of ethics and social responsibility violations of its suppliers, mainly at Hon Hoi Precision, also known as FoxConn had impact on Apple’s reputation and mainly no impact on sales and share value. In 2011 there were fourteen suicides at FoxConn and later on there were many riots, suicide protests by workers against the very long working hours, lack of insurance, workplace safety, horrible facility maintenance , incidents of using Child labor, lack of injured workers compensation, army camp style management and others (McGrath, 2012). Apple has handled things very carefully and assigned right people and started remediation methods, published supplier code of conduct, increased audits in its supplier firms, provided training, to improve situation and reputation; Tim Cook, the CEO of Apple talked about Foxconn and how his company is trying to improve the working conditions for employees and workers in its suppliers’ factories and how seriously Apple is taking the allegations (Knibbs).
Apple’s reputation had an impact during the time of events, created a buzz in media world; Apple got a bad name within its investors and stake holders. Later on, Apple was able to manage out of the situation very well. Overall there is no impact to sales or revenue or Apple’s share value. Apple shares might have taken a small hit for few days when there were publications by media, but overall share value was growing in 2010 and 2011 when all of reports were being published. Apple is still considered the most admired company in the whole world as per Fortunes World’s most Admired companies for 2008-2013; six years in row (Shaughnessy, 2013). Apple products are very well received in the market; there are no aversions or hatred towards Apple’s products based on the allegations. We usually see the drop in sales when there are negative allegations on companies, we have seen this in case of Paula Deen based on her racial comments and also with Duck Dynasty and its products when Phil Robertson has made anti-gay comments and cause big dent in their reputation, we have not seen this with Apple.
When iPhone 5s was released in September of 2013, stores reported people standing in long lines at Apple and its partner stores to get the first piece. Today there are hardcore fans to Apple products than for any other company. Apple products are growing popularity even in China where the allegations of horrible working conditions have been reported. Based on my personal observation, Apple stores are among the most crowded stores at local malls. Even with heavy competition for Samsung, LG, Nokia (now Microsoft) and Motorola, Apple iPhones are still most commonly used smart phones in United States. Apple’s App store has more than a Billion applications available to end users. By observing the Apple’s growth pattern, it is safe to say that the impact of supplier violations is minor.
To improve the working conditions and abide to Fair Law Association (FLA) policies Apple has come up with and published “supplier code of conduct” (“Apple supplier,” 2012) for all its suppliers to adhere who provide parts to its products. To ensure that its suppliers adhere to wage and benefits standards going forward, Apple has to strictly enforce the “supplier code of conduct” and also increase the supervision and auditing of the supplier factories, HR and pay roll systems up to allowed by the local and international laws. Many of the rules and regulations which are illegal in US are acceptable in other countries. As Apple’s suppliers are mainly in other countries than US, Apple can set up strict rules and guidelines more close to US laws in addition to local government policies and Fair Law Association (FLA) laws, as most of its products are used by consumers in US.
Apple can also open up complaint/suggestion boxes (online, in factory and via phone) from workers in supplier factories to understand and closely monitor the working conditions and get feedback on wages and benefits. Apple can restrict the number of hours a worker can work in its supplier factories. Apple can create guidelines in its code to have onsite help to talk with workers and understand their problems and work with supplier factories to solve them. Apple can guide its suppliers to setup onsite and close to campus medical facilities for workers working in its supplier factories.
Apple can work with local media and government to do surveys from general public about their supplier practices at factory facilities. Apple should request the ethics code of conduct as one of the primary pre-requisite from their suppliers as part of the initial RFP – Request for proposal. Apple should get feedback suppliers’ employees to understand how well the code is followed by its upper management in the company and should enforce supplier to improve it before renewal of contracts. Apple should stop buying parts from suppliers with tainted reputation, or suppliers with weak or no ethical code of conduct. Apple should compare the working conditions and wages of workers in its supplier factories to competitor factories in the area and pass regulations to improve the wages to meet market standards.
Apple customers would be willing to pay more for its products to provider better wages and benefits to suppliers’ workers. Apple can make this happen by showing the reasons behind increase in prices, and how additional money will be utilized for worker compensation and benefits. Apple should advertize in TV, publish articles on its website and provide information to Media on how the additional money will be utilized. This is much similar to Ms. Lee Rhodes and her Glassybaby in the case study, Glassybaby gives 10% of its revenues for cancer treatment. Another suggestion that I can make is that, some percentage of increase in salaries for workers should also come from Apple’s profits to show consumers that Apple is not only charging more for products but also taking a cut in their profits to provide better working conditions for workers. Apple and its main founder Steve Jobs do not have very good name as Philanthropist, there is no public record that Steve Jobs has donated any money (Sorkin, 2011).
After Tim Cook took over Apple’s CEO position, he has made some donations but compared with other companies with high revenues and profits; the donations made by Apple are very negligible compared to its revenues and profits (Emerson, 2012). Apple can improve its image and reputation in the world by giving some percentage of profits to suppliers’ workers through multiple programs and incentives. Today Apple’s products are most popular in the market; iPhone is the best selling smart phone out there in market. Apple and its products have huge fan base and many of the competitor smart phones from Samsung or Microsoft are not comparable to iPhone. With such a popularity, increasing a minor percentage E.g.: 3-5% of price will not have any impact on product sales.
Most of the Apple products are sold with network connection also known as data plan, the minimum data plan is very expensive and costs up to $40 per month for many carriers. Some of Apple’s iPhone customers take data plan because they are intrigued with iPhone and Apple products. When customers are willing to pay additional money for seldom used data plan as they stay home mostly where there is Wi-Fi connection as an alternative to data plan. Customers should be willing to spend a bit more money to improve working conditions and salaries for suppliers’ workers.
Apple has excellent market strategy for its products; Everyone remembers those PC and Mac comparison commercials, which used to portray Apple’ Mac computers as cool and trendy for Generations X and Y and for everyone at home where as Microsoft PC was shown as business computer with bugs. In reality, Microsoft operating system is more flexible and customers can customize and make modifications and create applications relatively easy, where as you need to go to App Store for installing/upgrading any iOS applications. Microsoft or Samsung devices allow users to copy MP3 files, and play them without any intermediary software such as iTunes, a mandatory application for Apple to copy songs in to iOS applications. Even with less flexibility Apple’s products are highly sold in market today due to its design and performance of its products and mainly it’s Marketing strategy.
Apple does not really advertize new versions of iPhone releases, rather it keeps it secret, there are no beta releases, and there are no pictures or commercials in the market before a new version iPhone is released. It creates buzz in the market which generates mystery about its product. In addition to its own marketing, Apple’s iPhones are also advertized by other companies such as network providers such as AT&T, Verizon and other companies which make protective cases and other accessories for iPhones. Apple maintains such secrecy before releasing its iPhone products; it has worked greatly for them. Another way Apple products are advertized is by word of mouth. Today many of smart phones in the market from Samsung, LG and Microsoft have similar functions as iPhone, but in my view the secrecy/mystery and word of mouth advertizing for iPhone has helped to maintain its leadership in the market.
To improve competitive advantage over global market place, Apple should sell its products more in other countries; expand its base out of US. The usage of smart phones is at verge of getting saturation in United States, consumers in US are tied to data and voice plans from network providers in US. Until latest generations of iPhones, iphones were sold at a later release dates in Europe, India and China than in United States. There is a lot of fan base for Apple in China and India, Apple should en cash that by making products affordable in those countries. Customers in US do not replace their phones until their contract ends with he network provider, which is usually two years from the contract start date. Most of the countries outside of US are not bound to network/data plans for the phones as they use GSM technology; this provides flexibility to consumers to buy more than one phone in two years.
Smart phones are getting more popular in India and china where the population is very high. Population of India and China combined is more than six times the population of United States (CIA World Factbook); if Apple can capture a small percentage of the market in those countries it will have more customer base than it does in whole US which bring higher revenues. Apple should start customizing their products and make them consumer friendly in other countries, such as make menus in native languages, create local custom applications etc.
As word of mouth advertizing has proven working for Apple, they should start giving some samples of their products to celebrities in India where the common public trend is to follow the celebrities and mimic their product usage. It has worked for other companies and products; it should also work for Apple.
Apple should start thinking about making their products more flexible and easy to customize, Apple is very popular among brand, but more savvy users with computer background started to lean more towards Google Android based phones from Samsung and LG as they have more flexibility and customization options. With computer skills and techniques being very common to kids in Generation Y and Z, Apple should think about concentrating on them and their tastes and Apple products more flexible.
Apple should innovate more, there have been some improvements and modifications to its products in past 3 years but there has not been a “WOW” product release. They should enter new markets, start coming up with new products such as long awaited Apple TV or they should get in to wearable gadgets such as wrist watches, glasses, motion controlled devices, devices with flexible screens and devices which look cool but monitor human body’s current health such as temperature, sugar levels, blood pressure etc.
Last but not least, Apple should improve its philanthropist image; they should start donating more to needy and charitable foundations. That usually helps in both ways; it improves the reputation and also works as advertisement.
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