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Mba: Human Resource Management

In: Business and Management

Submitted By KRBO
Words 1821
Pages 8
Corporate Responsibility and Marketing Strategies
Ka'Nesha Bolden
Dr. Dottie Heady
Contemporary Business
July 20, 2014

Apple states that all over the world, they are expanding opportunities for workers and ensuring that they will treat them with respect and dignity. Apple believes education can empower workers and improve lives. "Because education is a great equalizer, we are investing heavily in helping workers throughout our supply chain learn new skills and better understand their rights. In 2013, more than 280,000 people at 18 supplier sites took courses in a range of subjects through our free education and development program. In addition, our suppliers trained more than 1.5 million workers on their rights, bringing the total number trained since 2007 to 3.8 million." (Apple, 2014) Apple feels suppliers must treat workers fairly and ethically at all times. "We've strengthened our programs to help suppliers protect student interns and other at-risk workers. We are continuing our efforts to end excessive work hours. In 2013, our suppliers achieved an average of 95 percent compliance with our maximum 60-hour workweek. We are driving responsible sourcing of minerals, and we've publicly released a list of smelters and refiners in our supply chain to promote transparency." (Apple, 2014) "From one perspective, Apple's world could not be rosier and its future shinier. Rising from the rubble of a disintegrating company in 1997, Apple has reached the pinnacle of success in 15 short years. With a market capitalization of over $500 billion, Apple is amongst the most valuable and highly profitable companies in the world. Its remarkable success lies in the company's ability to create truly innovative products with vast customer appeal. Apple flouts the conventional wisdom of the consumer electronics industry, which emphasizes low cost, "me-too" products, and a continuously shortened product life. Instead, Apple has opted for constant and discrete product innovation, resulting in fanatic consumer loyalty and a high level of profitability." (Sethi, 2012) "So why does Apple treat its customers and workers by two different standards? When it comes to customers, Apple is a bold innovator that leads the industry into new directions and forces others to follow. However, when it comes to the management of its supply chain and treatment of workers in the Chinese factories that make its products, it hides behind the constraints of prevailing industry practices. What is even more disconcerting is the fact that these practices are in violation of not only local and national laws, but also of Apple's own voluntary, self-imposed code of conduct. It is important to note that this voluntary code of conduct breaks no new ground. It is at best a modest attempt to ensure that workers are treated fairly and provided with a safe work environment. The violations continue, despite years of monitoring factories where Apple's own audits show persistent non-compliance and despite these factories' repeated broken promises to improve." (Sethi, 2012) China Labor Watch (CLW) published an investigative report detailing the labor violations of three factories of Pegatron Group, a major supplier to Apple. The Pegatron factories are violating a high number of international and Chinese laws and standards as well as the standards of Apple's own social responsibility code of conduct. (Qiang, 2013) Does this mean a number of Apple's social responsibility promises are being broken? Indeed, including those related to worker safety, protecting the environment, and more. Apple continues to source from Pegatron factories despite serious labor rights violations. That Apple has made promises on the conduct of its suppliers means that Apple is complicit in the persistence of violations at these factories. Apple has zero tolerance for lapses in the quality of its products. If a quality issue arises, Apple will do everything it can to have it corrected immediately. But a lower level of urgency apparently applies in responding to labor right's abuses. Despite its professed high standards for the treatment of Apple workers, serious labor violations have persisted year after year. Apple must prioritize its efforts into halting the abuse of the workers making Apple products. (Qiang, 2013) Apple is aware that they should ensure that its suppliers adhere to wage and benefits standards by eradicating unethical hiring and exploitation of workers as well as end excessive work hours. Fair Labor Association states "There shall be no use of forced labor, including prison labor, indentured labor, bonded labor or other forms of forced labor. No person shall be employed under the age of 15 or under the age for completion of compulsory education, whichever is higher. Employer shall not require workers to work more than the regular and overtime hours allowed by the law of the country where the workers are employed. The regular work week shall not exceed 48 hours. Employers shall allow workers at least 24 consecutive hours of rest in every seven-day period. All overtime work shall be consensual. Employer shall not request overtime on a regular basis and shall compensate all overtime work at a premium rate. Other than in exceptional circumstances, the sum of regular and overtime hours in a week shall not exceed 60 hours. Every worker has the right to compensation for regular work week that is sufficient to meet the worker's basic needs and provide some discretionary income. Employers shall pay at least the minimum wage or the appropriate prevailing wage, whichever is higher, comply with all legal requirements on wages, and provide any fringe benefits required by law or contract. Where compensation does not meet workers' basic needs and provide some discretionary income, each employer shall work with the FLA to take appropriate actions that seek to progressively realize a level of compensation that does." (FLA, 2012) Based on the fact that the majority of the people carry many of Apple's products, customers would pay the prices as long as they are enhancing the features and allowing customers the feel they are getting their money worth. Then there are some who just want to keep up with the trend. "When it comes to customers, Apple applies the notion of value, i.e., a pricing strategy that is driven by its focus on the value—real and perceived—to its customers. The customer is willing to pay a price that is equal to the product's perceived value to the customer. Hence, as long as the customers are satisfied, Apple is under no obligation to reduce its prices. (Sethi, 2012) Tiffany Brown (2012) lists seven key takeaways in which Apple formulates long-term strategy for success. They are listed as identifying trends, analyze competitors, innovate, position your product, build brand awareness, optimize distribution, and don't forget your customers. Brown also elaborate on each topic and she states, "By recognizing such trends like digital consumerism and that the PC industry was becoming highly commoditized, Jobs was able to visualize a strategy for a product that met consumer needs. It is important to look across industries, strategic groups, buyer groups, the scope of a product or service, the functional-emotional orientation of the industry, and time to uncover such insights. When research pointed to the fact that Apple was losing market share and cannibalizing sales due to their strict licensing policy, Jobs ventured out to contract with Microsoft to improve core products. They also ventured out, while at the same time making the decision to utilize Intel chips in their computers, enabling Apple to build laptops that were both faster and less power hungry. By thoroughly understanding his competition, he was able to partner with competitors in ways that were not only mutually beneficial, but downright advantageous. By following a Schumpetarian model of creative destruction and focusing on the needs and wants of the consumers rather than how to just improve upon an existing product, Apple was able to continuously re-think its product line and invent new products that re-defined the traditional boundaries of the market. Innovation allows for companies to capitalize on the "first mover advantage," resulting in the realization of high up-front market share and profit margins. Because many computer systems and related products can be easily replicated, finding ways to extend the life of the product through complementary offerings is almost as important as re-invention. For example, the App Store served as a complement to the iPhone which resulted in $1 billion, in annual profits. And upon the launch of the iTunes store, an exponential demand for iPods was created. Through utilizing creative campaigns and non-traditional advertising channels for the Mac brand, Apple embarked on a truly unique differentiation strategy, which helped grow brand awareness. Apple revamped its distribution system to move from smaller outlets to national chains. They also opened their own retail stores (280 stores in 10 countries), which now account for 16% of Apple's total revenue. The retail stores were a success because they provided users with an opportunity to learn about, experiment with, and test drive products. Apple is known for superior customer service. In fact, just the other day I corresponded with a customer service representative through their online chat function and received a thorough answer to my inquiry. Competitive advantage can be easily achieved by creating and sustaining a superior customer service model." (Brown, 2012) The first approach I would suggest is increasing customer awareness and willingness to buy. Media advertising and sales promotion are usually more useful for building awareness and primary demand for a new consumer good among customers in the mass market. In either case, when designing a mass-market penetration marketing program, firms should broadly focus promotional effort to expose and attract as many potential customers as possible before competitors show up. The next step is increased ability to buy. For customers to adopt a new product and develop loyalty toward it, they must be aware of the item and be motivated to buy. But they must also have the wherewithal to purchase it. Thus, to capture as many customers in as short a time as possible, it usually makes sense for a firm pursuing mass-market penetration to keep prices low (penetration pricing) and perhaps offer liberal financing arrangements or easy credit terms during the introductory period. (Mullins, Walker, 2014)

References
Apple Inc. (2014). Supplier Responsibility. Retrieved from http://www.apple.com/supplier-responsibility/)
Sethi S. P. (April 2, 2012.) Two Faces of Apple. Retrieved from http://www.carnegiecouncil.org/publications/ethics_online/0068.html)
(Qiang, L. (July 29, 2013). Apple's supplier Pegatron Group violates workers' rights. Retrieved from http://www.chinalaborwatch.org/news/new-459.html)
Fair Labor Association. (2012). Labor Standards. Retrieved from http://www.fairlabor.org/labor-standards)
Brown, T. (March 4, 2012). The Core Marketing Strategy of Apple. Retrieved from http://tiffanyabrown.wordpress.com/2012/03/04/the-core-marketing-strategy-of-apple/)
Mullins, J.W., Walker, O.C. (2014). Marketing Strategies for New and Growing Mark. Retrieved from http://answers.mheducation.com/business/marketing/marketing-strategy/marketing-strategies-new-and-growing-markets)…...

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