This assignment based on Apple Corporation, about current position and reputation regarding ethical and social responsibility also the strategies that it currently employs to market its products. Apple Inc, is an American multinational corporation and world’s second largest information technology company; they designs, develops and sells consumer electronics, computer software and personal computers. Apple was founded by Ronald Wayne, Steve Jobs &Steve Wozniak on April 1,1976.
Apple has earned first place among Fortune magazine’s world’s most admired companies also many believe that Apple’s success stems from a combination of many factors; including a corporate culture enthusiasm and innovation and the remarkable leadership skills of CEO Steve Jobs (2011) and the high-tech products for which Apple is known, these combining qualities have allowed Apple to revolutionize the technology and retail industries. a) Apple’s current position on the company’s ethical and social responsibilities and determination whether or not the company has met these responsibilities with two examples that support my position.
Apple’s current position is based on its success ‘creating innovative, high quality products and on demonstrating integrity in every business interaction and services. According to Apple four main principles contribute to integrity; compliance, confidentiality, respect and honest. On the other hand social responsibilities for Apple’s supplier code of conduct that requires suppliers to provide safe and healthy working conditions, to use fair hiring practices, to treat their workers with dignity respect and adhere to environmentally responsible practices in manufacturing.
I don’t think Apple has met these responsibilities, as a condition for doing business with Apple, suppliers have to commit to the supplier code so therefore, there are multiple cases of unethical behavior from Apple; is a model where fundamental human dignity is sacrificed for development. The Foxconn factory in Shenzhen, southern China, which employs more than one million workers makes Apple Inc. iPhones, Sony Corp and Dell Inc computers.
Foxconn’s workers committed suicide for notoriously long working hour and harsh environment; Long 12hours days with a single day off every second week, unpaid work meetings, rushed to queue up for lunch and eat quickly, skipped evening meal until overtime, no friendly chit-chat among co-workers during the break, no option to say no’ for over time, toilet breaks during the working hours are also restricted, no movement without leaders permission from the seat, there is no time to use facilities like swimming pools, CCTV cameras are set up virtually everywhere for surveillance, the access system is very strict & no cell phones are allowed, immediate punishment for an error by public humiliation. Foxconn’s management practices and corporate culture are punishment oriented, despite the company human resources rhetoric of ‘mutual care and love’(Lucas et al, 2013) To cut costs and maximize profits, Apple hired around 500,000 employees and started to manufacture their product at two factories in China (Shenzhen & Chengdu).
After that suicide survivor an employee can work for Apple but they have to sign for an anti-suicide contract pledging and after they get hired, they will work excessive over time where, according to Chinese law states an employee must not work monthly more than 36 hours of overtime, but Apple makes them work around 98 hours of overtime which almost three times. Normal wages for an employee around $17 -$ 22 per day, which is a 12 hour shift, to keep with the demands for iPhones, iPads, iPods and Mac computers, Apple built a living dorms near the factories for employees to live in and subject to be woken anytime, around 24 people assigned to a room. Apple makes employees’ life miserable with this working condition even they can’t end their life because of anti-suicide nets installed outside of all the dorm windows.
Apple violated most of the four ethical theories, they are paying less for workers for maximizing profits that are inappropriate way of doing business. They disrespected the employees and made life very hard for them, they are depressed and upset because of the working conditions. According to Chinese group there were two explosions in iPads factories, killed four people and injured 77 also two years ago, 137 workers injured at an Apple supplier in eastern China after they were ordered to use a poisonous chemical to clean the iPhone screen before those blasts, Apple had been alerted to hazardous conditions. www. nytimes. com b) The impact that the publication of ethics and social responsibilities violations made by Apple’s suppliers has had on Apple’s reputation.
I don’t think there would be an impact because people are still buying Apple’s products and have better knowledge about the working conditions that Apple’s suppliers violated ethical and social responsibilities because when it comes to customers, Apple applies the notion of value a pricing strategy that is driven by its focus on the value to its customers. Apple is under no obligation to reduce its prices because the customer is willing to pay a price that equal to the products perceived value to the them. When it comes to workers wages and working conditions, Apple uses its dominant market position to acquire these services at the lowest possible price, therefore, its keeping largest share of the profit for itself and yielding the lowest possible share to the workers, it is not important for Apple to add cost to better wages and working condition represents a small portion of the overall costs.
Product boycott is very short-lived if it is not threat to consumers ‘ health and safety’ and possibly that’s why Apple still enjoys broad customer loyalty in China even though they have knowledge of these working conditions. Media coverage and public pressure are also declined when Apple has suffered no loss in demands for its products which is also continue to grow in the market, moreover Apple’s competitors also use all the same factories with similar labor practice and cost structure. In 2012, February shareholders meeting, no one of them asked questions about the labor situation in China, but they successfully gained changes in Apple’s board election procedures.
According to a new report, iPhone ownership increased 42% in the fourth quarter in the U. S. it has significantly increased from 35% in 2012 during the same quarter. Apple iPhone 5S took the largest share of iPhone of iPhone sales at 59% in the last quarter in 2013. According to research from CIRP’ Appl’s iPhones 5S has grabbed the biggest shares in sales in the U. S. Some analysts believes Apple Inc may reach to $1000 per share in two years Right now customers care more about new iPhone than working conditions in China. www. au. ibtimes. com c) Two methods that Apple can utilize to ensure that its suppliers adhere to wage and benefits standards going forward. Apple can utilize the supplier
Code of Conduct; 1) Apple’s suppliers must have to commit to driving the highest standers for social responsibility throughout their supply base before they do business with Apple. Apple has to focus on labor and human right to make sure workers are treated right by the suppliers; working hours, wages and benefits, freedom of association, Juvenile worker protections, prevention of underage labor, prevention of involuntary labor, fair treatment and antidiscrimination. 2) Surprise Audits: Apple can conduct a number of surprise audits at their suppliers every year by unannounced and insists on inspecting the facility and meeting with employees immediately. Apple should terminate the business relationship if a suppliers actions does not meet their demands.
d) The fourth assumption is’ The Apple 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, customers may or may not willing to pay more for its products because several reasons; Existing Customers are kind of used to with Apple’s prices For new customers it will depend on their income How customers will believe the increasing price will apply to worker’s wages and benefits? Some will ask questions why not Apple increase the employee cost since they are making higher profit then anyone in the market. In 2012, more than 2 million of customers placed orders for iPhone 5 in the first 24 hours the way the new iPhone jumped off in the market. In 2013 September Apple sold a record breaking nine million new iphone 5S and 5C models just three days after lunched moreover 200 millions of iOS devices are now running the completely redesigned iOS7.
So based on this record, Apple customers may pay more if Apple wants to increase the price for better wages and benefit from it supplier’s workers. People love Apple for their product’s design and the power of the entire market, in this circumstances, customer may pay more if Apple increases the price for better wages and benefits for suppliers’ workers. e) Analyzing Apple’s current overall marketing strategy. Recommend two actions that Apple can take in order to improve its competitive advantage in the global market. Apple has a unique marketing strategy in the market, Apple does not have a marketing budget, they never advertise their mobile products because some other company advertise their product for them but Apple is best selling smart phone year after year.
The secrete marketing strategy is Exclusivity technique which is executed with relative success by businesses by giving a select subset of customers a special deal on goods or services, it creates a better customer business relationship and which is also proven to increase brand loyalty. Apple now is on a mission to become more fashion forward, they added two main fashion industry icons to its rank Former Yves Laurent, CEO Paul Deneve to work on special projects and Burberry CEO Angela Ahrendts to lead retail operations. Apple is also working with automobile companies to integrate features like Apple maps, Siri and iTunes into the built in displays of cars. Moreover, Apple is combining its roots in humanizing technology for making it personal and invisible by a more acute sense of fashion to lure the discriminating, less price sensitive buyers and of course those who aspire to be part of a club.
Maintaining their position as the industry innovator means that Apple will continue to reap the history of the firm, innovation has set Apple apart from the rest of the industry and propelled them into the success they are today. Moreover, Apple is not present in many foreign markets besides Japan and Europe. Apple’s competitors, Dell and Hewlett Packard are both sold throughout the world, so to be continued to grow and stay competitive Apple need to expand into the international market if Apple used the same marketing strategies that they have captured the American youth with. . Apple competitors have failed so far to match its values associated with its brand and its profit margin so In 2014, Apple needs to make sure to do something more to keep it devote fans in the fold than another cycle of upgrades.