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Assignment 1: Corporate Responsibility and Marketing Strategies.

Irina Zakharov

BUS 508-Contemporary Business
Mulugeta A. Dessie, Ph.D.

01-28-2015

Apple has done a really good job with their ethical and social responsibilities. After several suicides at their supplier company Foxconn, Apple investigated allegations of child labor violations, toxic conditions, and other violations of their code of ethics.
Two examples of these responsibilities include Economic Responsibility and Legal Responsibility. Economic Responsibility is every corporation’s responsibility is to be profitable. Apple is the first in its class and its field. The company’s sale exceeds over 100%; this shows that Apple is an ideal example of a company that fulfills its economics responsibilities.

Regarding Legal Responsibility, Apple has stopped the use of underage labor in several of their facilities including Foxconn.

Apple has made the necessary corrections in their Ethical and Social responsibilities. Apple eliminated the Ethical violations by discontinuing dangerous working condition in two of their working facilities. In their voluntary responsibilities, Apple has also done a tremendous job. They have addressed environmental issues such as toxic material removal, recycling and use of greenhouse gas emission. In addition, Apple is assisting with the fight against AIDS, Tuberculosis, and Malaria.

Ethics and social responsibilities violations made by Apple’s suppliers. Impact on Apple’s reputation

Apple was involved in a scandal regarding several suicides in China at Foxconn Technology. Foxconn is a major supplier to the Apple, Dell, and Hewlett-Packard companies. Two Foxconn campuses in China involved a total of 14 worker suicides between July 16, 2009 and August 22, 2010.
After major suicides at Foxconn, Apple underwent major improvements with their social and ethics responsibilities. In response to criticisms made by NGOs and the mass media, Apple published the Global Suppliers Responsibility 2011 Progress Report. 
After conducting research it is noted that Apple presents itself as a responsible corporation. Apple not only addresses individual violation problems, but also aims at improving management systems which are fundamental to these problems. Apple claimed that social responsibility is fundamental for their company. Regarding suppliers, Apple stated that all of their suppliers were required to provide safe working conditions, treat workers with dignity and respect and use an environmentally friendly manufacturing process.
The Apple Supplier Code of Conduct involves five areas. The areas are Labor and human rights, health and safety, environment impact, ethics, and management commitment. Apple monitors the social responsibility performance of its supplier and terminates business with those who fails to meet Apple’s expectation consistently.
In 2010 the Apple Company came up with a new idea to create an Apple social and responsibility program. The ideas of the company were to:

Extend the compliance monitoring program: increased the number of facilities audited

Expand its training initiative: have trained more than 300,000 workers on their right and protections   under local law and Apple’s code

Dedicate additional resources to protect workers from other countries: searched for right -violations and reimbursed overcharged recruitment free

Prevent the hiring of underage workers: provided age-verification tools, educated facilities to manage third-party recruiters, required suppliers to return underage workers to school and finance their education

Map the use of potential conflict minerals

Apple’s compliance monitoring program included factory audits, corrective action plans, and verification measures to ensure suppliers’ compliance to its code of conduct.
 Apple’s conducted an audit in 2011 in the areas of Labor and Human Rights, Health and Safety practices, Environmental Impact, Ethics, and Management Commitment. The results are outlined in the bulleted list below:

Labor and Human Rights, 72% practices in compliance

Health and Safety, 72% practices in compliance
Environmental Impact, 80% practices in compliance
Ethics, 95% practices in compliance
Management Commitment, 64% practices in compliance
2011 core violations:

Involuntary labor: excessive recruitment fees paid by foreign contract workers)

Underage workers
Worker endangerment: exposure to n-hexane; performing activities at height without guardrails or safety harnesses
Falsified records: payroll records and interview answers
Bribery: offered cash to Apple’s third-party auditors
Coaching workers on how to answer auditor’s questions: false payment information.
Two methods that Apple can utilize to ensure that its suppliers adhere to wage and benefits standards going forward.
Based on Supplier Responsibility standards the supplier responsibilities are to uphold the rights of the workers and to establish a discrimination free work place. The suppliers must also show workers respect and dignity. They may not harm workers verbally or orally. The company has a duty to provide their workers with a healthy and safe workplace. Also the company can undergo compliance monitoring programs at the supplier end. These compliance programs can include factory audits, corrective action plans and verification measures for ensuring the compliance of the code of conduct as well with cross checking the reports.
Will Apple’s customers pay more for its products if Apple had to increase selling prices in order to provide better wages and benefits for suppliers workers?
In a free market system, consumers and sellers interact in a market to set prices. When the market is characterized by competition other companies sell identical products. In this case it will be even worse for the supplier’s workers, because the quantity of a product that people will buy depends on the price. The consumer will buy more when the price is low and less when the price is high. Price also influences the quantity of a product that producers are willing to supply. If the price to make an item is high, the producers will not spend much money on that product unless there is a big market the product, or if the item is paid for in advance. Consumers will most likely not want to pay higher prices for items in order to pay the company’s workers. The consumer will look to the company to cut costs elsewhere, and not pass the cost to the consumer.
Analyze Apple’s current overall marketing strategy. Recommend two actions that Apple can take in order to improve its competitive advantage in the global marketplace.
When Apple Inc., became a corporation in January 1977, its investor and advisor Mike Markkula, assembled a three point marketing philosophy. It is an amazing philosophy that remains at the core of what makes Apple so effective at creating and profiting from loyal customers. Here are Apple’s original three points:

Empathy – We will truly understand [our customer’s] needs better than any other company.

Focus – In order to do a good job of the things we decide to do, we must eliminate all of the unimportant opportunities.
Impute – People DO judge a book by its cover. We may have the best product, the highest quality, the most useful software, etc.; if we present them in a slipshod manner, they will be perceived as slipshod; if we present them in a creative, professional manner, we will impute the desired qualities.
Apple has used these principles to become the world’s most valuable company and also one of the world’s most valuable brands. Here are ten strategies Apple has used to become one of the world’s greatest marketers:

Hire customer-obsessed, empathetic employees.

Iterative customer involvement.
Protect against scope creep and feature bloat.
Build compatible experiences.
Enable customer discovery and differentiation through Apple Stores.
Build a moat.
Devise a business model that creates ongoing customer value.
Cannibalize when necessary.
Don’t try to be all things to all customers.
Create an ecosystem that makes offerings valuable.
Regarding Apple’s strategies, I am absolutely in agreement with number one; Hire customer-obsessed, empathetic employees. I believe that Steve Jobs had unique and effective insights about how people wanted to interact with technology. When Apple employees think about the customer experience from the customer’s point of view, the products will be exactly what the customer wants. This is because Apple employees are so deeply entrenched in and committed to the customer experience.
Apple has shown that it is not only an outstanding technology company but also an outstanding marketer. Apple’s marketing strategy is a unique blend of traditional and nontraditional elements. 

References

Apple - Environmental Responsibility. (2015, January 1). Retrieved February 28, 2015, from
http://www.apple.com/environment (2014).
Murray, R. (2011, April 19). Perhaps a new App is not the answer. Retrieved February 28, 2015,
Schipper, M. (2007). Apple – CSR company overview. Retrieved February 28, 2015, from
http://www.iphoneproj2011.wordpress.com
Tammy. (2011, April 18). Apple's social responsibility? Retrieved February 28, 2015, from
https://iphoneproj2011.wordpress.com/2011/04/18/apple’s-social-responsibility/
Why Apple Is a Great Marketer. Retrieved February 28, 2015, from
http://www.forbes.com/sites/christinemoorman/2012/07/10/why-apple-is-a-great-marketer/