CORPORATE SOCIAL RESPONSIBILITY AND MARKETING STRATEGY
CASE STUDY OF APPLE INC.
1. Examine Apple’s current position on the company’s ethical and social responsibilities, and determine whether or not the company has met these responsibilities. Provide two (2) examples that support your position.
In the last decade as technology has advanced, apple has become one of the leading icons in terms of innovation and technological advancements. It follows therefore that interest in the company’s corporate responsibility has increased as well. As newer products come into the market, competitors are trying to beat apple through corporate social responsibility. The company’s corporate has three main categories:
Workforce: apple has dedicated time and resources towards ensuring that the company employees are not only well compensated but are also able to work in an environment that promotes teamwork and dignity. From top managers down to the workers at the bottom, the focus is on ensuring that employees are satisfied with their duties as well as the resources granted to them for work. Managers are encouraged to have an open-door policy and engage in interaction with subordinates. Team members are scheduled for a time and sometimes holidays in which they engage together and enjoy time together.
Also, the company has invested resources towards training workers on the importance of the environment and the communities where the company operates. IN doing so, Apple has encouraged employees to become creative in maintaining and increasing environmental responsibility.
Suppliers: Sandoval (2013) stated that Apple has employed its own technology in researching suppliers. The company makes considerable efforts to engage with only those suppliers that promote human rights and provide equal opportunities to all workers. However, it should be noted that even with all the efforts some suppliers have managed to slip the cracks, engage in business with apple; a situation that has cost the brand name dearly.
Community and environment: Apple being a technology-based company has suffered great criticism from environment lovers and scholars. However, the company has made notable steps in preserving the environment. According to Klein (2011) in 2013, company auditors indicated an increase of 40% towards projects invested in environmental responsibility and supported by Apple. A good example is the official system X which has been designed to promote energy saving.
2. Determine the impact that the publication of ethics and social responsibilities violations made by Apple’s suppliers has had on Apple’s reputation. Support your response with examples of the impact in question.
In the year 2011, Apple suffered multifaceted hits. Reports of suppliers who employed under-age children, forced workers into overtime, and even engaged in one form of labor law violations or another came to light. Unfortunately, the focus of the reports was not on the companies themselves such as Yantai and its child labor but rather on the association of the companies with Apple. Forced into a corner, the company had to make a stand and joined the Fair Labor Association. Through the association, the company engaged in private audits of its suppliers to ensure that they are abiding by all laws. Slowly, Apple is disassociating with the popular notion of poor labor and employee standards. None of the suppliers have been left behind including Foxconn, and these findings are published to ensure transparency. The effect has been twofold: on the one hand, consumers are willing to give Apple a chance to rectify their error while on the other these published results often serve to alienate certain sectors of the market.
Reduction in regional sales
Before the beginning of the decade, Apple was identified as one of the companies encouraging the use of minerals from conflict ridden regions. Because of these associations, boycotts of apple’s products in regions such as South Africa in 2011 and even parts of Europe in 2012 saw a decline in the sales in these regions. Today, Apple is making a genuine effort to identify and encourage the use of minerals that are not conflict related.
The Apple brand has been built on secrecy when it comes to the nature of their products and even the production systems. The result of this system has translated to all sectors of the company. Employees of the company rarely acknowledge that they work for the company; they operate in the secrecy that is the culture of Apple. According to Parra (2008) unfortunately, while this form of secrecy has protected products and services from competitors, it has also alienated the company customers. In a recent study, Transparency international ranked Apple at Number 15 when it comes to secrecy. Consumers are still skeptical that the company employs the sweatshop kind of rules such as child labor and forced overtime. Transparency is needed to improve this image.
3. Suggest two (2) methods that Apple can utilize to ensure that its suppliers adhere to wage and benefits standards going forward. Justify your response.
Proper and authentic Auditing of the supply chain
Even though Apple has engaged in auditing of its supplies, there has been information that such auditing is only for better publicity. The company continues to engage with suppliers who are notorious for the abuse of human rights. Companies such as Foxconn were in 2012 sighted for the use of child labor coupled with poor work environments. Though they have been continuously audited by apple officials and results published, little has been done to sever the relationship.
Deal with conflict of interest in FLA
FLA has come under heavy criticism in the recent past for being a dressing window for many companies. There have been cases where the organization has under-reported labor violations. In 2013 for example, studies showed that there were major discrepancies between the reports by FLA and the Workers Rights Consortium. Apple needs to report and publish exactly what is happening with suppliers to improve transparency.
4. Determine whether or not you believe that Apple’s customers would be willing to pay more for its products if Apple had to increase selling prices to provide better wages and benefits for suppliers workers. Provide a rationale for your position.
To support proper alignment and management of the supply chain, Apple may have to increase the price of its products. Whereas in many cases an increase in price would be seen as a disadvantage, it is important to note that this may not be the case for Apple. This is because the company enjoys brand loyalty as the luxurious manufacturer. Many customers associate with Apple because they believe that the company is the best. Based on this notion, therefore, the company can enjoy a strong brand presence while at the same time maintaining a price advantage. Competitors such as Microsoft and other manufacturers are far from catching on in terms of technology.
The majority of the consumers according to a study by Myers (2015) were willing to pay an extra price to associate with companies that were making an extra effort in corporate social responsibility. Human beings and individuals like to feel that they are doing something to correct the issues in the world such as conflict reduction and decrease of child labor. For this reason, they may be willing to pay an extra effort. However, surveys in 2012 revealed that the majority of the consumers felt that apple was making little if any effort to utilize what they termed as an already large enough and inflated profit margin to manage its own supply chain. With this in mind, it is quite possible that consumers would interpret the price increase as an attempt by the company to increase profit while at the same time making mediocre attempts at improving social responsibility. Before the price increase, therefore, it is wiser for the company to ensure that efforts at transparency and undertaking of serious responsibility in the supply chain are completed. Consumers need to be satisfied that they are doing enough now to warrant a price increase.
5. Analyze Apple’s current overall marketing strategy. Recommend two (2) actions that Apple can take to improve its competitive advantage in the global marketplace. Support your response with examples of instances where your recommendations yielded the desired results.
Apple’s marketing strategy includes the following key components:
Efficiency in customer service
Each of the products and services unveiled by apple has one thing in common, they stand out in the market place. Ordinary tablets and even phones become extraordinary experiences for the consumer. Whenever an Apple product is being launched despite some negative publicity, consumers stand in line hoping to catch the exciting experience offered by Apple products. The creativity and innovativeness of the company that is directed towards ensuring satisfied customers are paying off greatly.
Exploration and differentiation
In 2014, apple began rebranding itself and entering fields that had yet to be explored such as I watch. The result is that consumers have begun associating Apple as a pacesetter in the technological industry. While competitors are busy mirroring each other, apple has identified new gaps in the market where brand loyalty can be increased.
Apple has employed a simple to understand marketing technique. Complex products are broken down for the average consumer making them easier to understand and desirable. This has increased brand loyalty not just to the young technical age but also to the aging boomers.
Perhaps the biggest shortcoming for Apple is that it appeals to the luxurious class the upper class ignoring the average user. It has provided an advantage to the competitors who focus on building products that are ideal for the average user. Following serious economic downturns across the globe, Apple’s market share has been hit hard with consumers opting for lesser products, which are averagely priced. Apple needs to rebrand itself and make it more appealing to the average consumers.
Also, Apple suffers from poor customer delivery. Marketing on new items begins early, before the launch date. Customers are often put on the waiting list sometimes for months. The frustration with waiting leads to customers opting for other gadgets. A case in the example would be the 2014 launch of the new I pad from apple. Customers waited months for deliveries, months in which they were bombarded with negative information on the product. Sandoval (2014) shows that at least 22% of the original customers, opted for competitor’s products or reduced the number of gadgets they were to purchase. It is noted that in addition to waiting for months, the same I pad came at a slightly higher price than those offered by the competition.
According to CSR Hub (2015) research comparing the main manufacturers in the PC industry, Apple was rated the last when it came to dealing with customer complaints. This could be one of the reasons behind the poor customer retention rate of the company. Customers who had issues with Apple’s highly advertised product, the iPhone 4G are still to receive help or replies about their complaints. It follows therefore that these customers may be less than willing to interact with future company products.
CSR Hub (2015, July 20th). CSR Hub social Responsibility and Sustainability Information on Apple http://www.csrhub.com/CSR_and_sustainability_information/Apple-Inc.
Klein. P. (2011). Where Is Apple’s Social Purpose? Forbes Online as retrieved from http://www.forbes.com/sites/csr/2011/08/12/where-is-apples-social-purpose/
Myers. C. (2015, July 2015). Corporate Social Responsibility in the Consumer Electronics Industry: A Case Study of Apple Inc.
Parra, C. (2008, June 23). Quality of Life Markets: Capabilities and Corporate Social Responsibility. Journal of Human Development.As Retrieved from http://www.tandfonline.com/doi/full/10.1080/14649880802078751
Sandoval. M. (10th November 2014). Corporate Social (IR)Responsibility in Media and Communication Industries. As retrieved from http://www.tandfonline.com/doi/abs/10.1080/13183222.2013.11009120