Corporate Responsibility and Marketing Strategies - Apple Inc - Essay Example

Corporate Responsibility and Marketing Strategies of the of the Number Apple Inc. is a multinational company, which implies that its business is subjected to the regulations of numerous nations and while operating in any particular nation, the company should respect regulations prevalent therein. According to the Supplier Responsibility Progress Report 2014, Apple has mentioned the labor and human rights to be of foremost importance in business. The directives state that Apple does not encourage excessive working hours and that a worker can work overtime only under special or unusual circumstances. All overtime work must be voluntary, where overtime implies more than 60 hours of work weekly. Apple had started a program in 2011 that would track whether their suppliers are abiding by the rules set. The suppliers are supposed to inform the authorities in advance when they would need extra working hours in order to meet the production requirements (Apple, 2014). Then again, there have been instances where Apple’s claim of 95% compliance with the 60 hour work week has been found to be false. There are suppliers who still exploit the workers by requiring them to sign overtime work documents on the first day of their training program as part of the contract. Such behavior forces them to comply with the clause of voluntary overtime. The concept of “Unusual circumstance” is a major loophole in the policy structure as it does not specify nature of the circumstance and leaves the same to the discretion of suppliers. Moreover, the Chinese Labor Law mandates a 48 hours’ work week. Thus, Apple is clearly not complying with the Chinese regulation while conducting business therein (Klein, 2011). Apple has also stated in its policies that the company believes in providing students with quality internship opportunities, but often the vocational schools fail to offer the students their appropriate internship programs. In order to correct the same, Apple had partnered with Stanford University’s Rural Education Action Program (REAP) and Dell Inc for encouraging suppliers to match interns with appropriate work. This process will help the students receive quality education as well as facilitate proper accountability for the vocational schools, thereby leading to proper evaluation of the internship and education program. 2. Some of Apple’s major suppliers have previously been found to violate rules, which had subsequently led to the tarnishing of Apple’s reputation. Two of Apple’s major suppliers, namely Foxconn Technology and Pegatron, are perfect examples related to such a situation. Foxconn does not comply with the Chinese labor laws of working hours and has a very poor wage structure. There have been reports of suicides due to poor pay and after a blast in the factory, several people were injured and few even lost their lives (Torres, et al, 2012). Pegatron has also been found to violate labor laws, which include hiring discrimination, women’s rights violation, labor abuse, poor working and living conditions, environmental pollution and negligence of the management pertaining to employee grievances and health and safety concerns. Apple had faced criticisms internationally and its reputation as a technological innovator was hampered to a great extent. Since then, the company has further developed its labor laws and the supplier’s code of conduct. The recent developments in the Corporate Social Responsibilities have led to stricter supervision of the supplier’s code of conduct (Ferri, Deakins & Whittam, 2009). Apple has also joined FLA in order to inspect three of Foxconn factories in a bid to improve the working conditions and develop remedial measures, post the suicides in 2010. Foxconn, with an aim to appease Apple, has increased their labor wages and have improved working conditions. 3. In order to make the supplier code of conduct and responsibilities public to all the stakeholders, Apple has for the first time this year published the full report. Details about the specific requirements in the 20 key areas, that the suppliers must follow, are present in the report. All future audits are mandated to follow the instructions stated in the report. Apple has a very aggressive monitoring program like, Apple led factory audits and corrective action plans, which would check whether the suppliers are complying with rules set. Consequently, the suppliers will be forced to comply with such rules so as to be at par with the audit requirements of Apple. In addition to the regular audits, Apple also conducts surprise audits, where a team visits the supplier unannounced and inspects the factory within an hour of arrival (Frost & Burnett, 2007). Apple can also reconsider their business relationship with a particular client if the latter fails to adhere to the rules and regulations set. They can also put the client on probation period for a year and if the condition at the factory improves, then Apple can reconsider doing business with them again. Such measures will incentivize the suppliers into following the terms and conditions and in the process, the working conditions will be improved. 4. Apple’s market share has been consistently falling over the past year and investors do not sense a change in the market trend anytime soon. In spite of the new phones launched by Apple, the prices offered are not being effectively in luring the customers. Apple targets a niche market, but in the face of steadily declining market shares, it is advisable to cater to the masses. The exorbitant prices of iPhone have discouraged customers in the developing countries from purchasing the same. Consumers are not bothered whether the prices are increasing owing to improvement in the organization’s wage structure. They need to be delivered their value for money. At this stage, Samsung, Huawei and other companies producing Android phones at lower costs are capturing greater market share as they are able to provide the consumers with similar privileges at better rates (BBC, 2013). The fall in market share of Apple has also discouraged investors from investing in the company. There are few Apple loyalists, but they do not represent a considerable share of the market. Moreover, lack of new and innovative items launched by the company has also put off many Apple loyalists, leading to a further decline in sales numbers. 5. Apple has achieved brand marketing and brand positioning in a very professional manner (Clark & Mathur, 2011). The company has built attractive products that would draw considerable attention of the consumers. It charges high prices, but justifies the same with the product quality that they offer. Apple challenges the available technologies in the market and constantly comes up with new and better products (Gummesson, 2010). Apple does not bother with the technological jargon and explains the special feature of the phones offered in plain and lucid language. Apple has, furthermore, established a name for itself that has led individuals worldwide to associate MP3 players with iPod. Apple appears to have the most loyal customer base in the market that will always purchase its products regardless of the price. The company serves the elite class of consumers; however, they should start offering price reduction from time to time in order to attract more customers. Apple can also formulate new products with similar features as that of the present phones, but at lower costs, so as to target the price sensitive customers. The firm needs to incorporate a more aggressive promotional campaign such as, creating better TV advertisements. Apple should also come up with more innovations so as to stand the ground in the competitive technological market and invest more in the R&D. The concept of green technology is gaining focus in the present market. As a result, Apple can launch energy saver products and attract more consumers. More number of joint ventures, such as, the tie-up with IBM, can help the company to overcome competition and gain market share. In order to be more visible, Apple should consider setting up larger number of retail outlets. References Apple. (2014). Supplier Responsibility 2014 Progress Report. Retrieved from https://www.apple.com/supplier-responsibility/pdf/Apple_SR_2014_Progress_Report.pdf BBC. (2013). Apples shares fall on emerging market concerns. Retrieved from http://www.bbc.com/news/business-24058630# Clark, T. & Mathur, L. L. (2011). Global Myopia: Globalization Theory In International Business. Journal of International Management, 2(4), 361-372. Ferri, P. J., Deakins, D. & Whittam, G. (2009). The Measurement Of Social Capital In The Entrepreneurial Context. Journal of Enterprising Communities: People and Places in the Global Economy, 3(2), 138-151. Frost, S., & Burnett, M. (2007). Case study: the Apple iPod in China. Corporate Social Responsibility and Environmental Management, 14(2), 103-113. Gummesson, E. (2010). Implementation Requires A Relationship Marketing Paradigm. Journal of the Academy of Marketing Science, 2(6), 242-249. Klein, P. (2011). Where Is Apples Social Purpose? Retrieved from http://www.forbes.com/sites/csr/2011/08/12/where-is-apples-social-purpose/# Torres, C.A.C., French, M.G., Hordijk, R., Nguyen, K. & Olup, L. (2012). Four Case Studies on Corporate Social Responsibility: Do Conflicts Affect a Company’s Corporate Social Responsibility Policy? Utrecht Law Review, 8(3), 51-73. Read More