Week 3 Assignment 1
Corporate Responsibility and Marketing Strategies
Apple Incorporation
BUS 508
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Apple Incorporation Apple Inc. is a corporation based in Cupertino, California (USA). The company designs, develops and sells consumer electronic products such as laptops and desktops, mice and iPhone. It also develops computer software, most popular of which is Mac OS X. Its major products include the Mac computers that it has been developing since 1984. Also included in the list are some of the world’s renowned products: iPhone and iPod, as well as the iPad.

The company was initially found by Steve Jobs, Steve Wozniak, and Ronald Wayne in 1976. Their purpose was to develop and sell computers that were more personal and easy to use than the current systems at that time, which were very complex and required knowledge of a programming language to operate.
In 1977, the company incorporates as Apple Computer, Inc. and itself to Apple Inc. in 2007. This change reflected upon the fact that Apple now focused on consumer products rather than computers. (Jason D. O'Grady (2009) “Apple Inc.”) Apple has developed an extensive Supplier Responsibility in which it assess the impacts of its operations and policies to the environment it operates in, including its employees and customers along with the physical and built environment. Apple has made its responsibility to ensure that its workers are provided with safe and ethical working conditions. Apple believes that its employees should have relevant educational opportunities that help them advance in their career. It also believes that this matter should be in the attention of its own suppliers as well, who promote and implement same, if not better working policies. ("Apple 2010 Supplier Responsibility Report")
To ensure transparency in this matter, Apple has been publishing several audit reports that shows the complete supply chain of the company. In these reports, Apple shows the findings of the problems incurred and how the issues were resolved. Apple has been going in very deep in this matter, at an extent not seen in the industry.
Apple checks and reports on the suppliers practices as well, such as forced overtime by Apple’s suppliers. It tracks over 1 million workers’ weekly work sheets to ensure that each employee gets a good pay for working a justified amount of time. Furthermore, underage labor practices are not tolerated and reported immediately with action taken against those people practicing this. For this matter as well, Apple has requested Fair Labor Association (FLA) to conduct an independent audit of one of its major supplier, Foxconn.
Additionally, Apple has invited environmental groups such as the Institute of Public and Environmental Affairs (IPE) to conduct specialized audits to ensure that their practices do not infringe and environmental laws and ethics. Other practices by Apples includes developing better employee-management communication lines in collaboration with Verité and promotion of conflict-free minerals by the help of Industry Citizenship Coalition (EICC) and the Global e-Sustainability Initiative (GeSI). (Apple.com, 2014)

Foxconn is one of Apple’s major suppliers. Foxconn’s working environment has been a controversial matter for Apple’s social and ethical responsibilities. There have been several incident reports that broke Apple’s Supplier Responsibility code; however, Apple has continued to maintain business relations with Foxconn. The incidents reported were a direct violation of the above mentioned practices that Apple claims it enforces for its employees and the employees of its suppliers.
It includes forced overtimes, with 70 hour work weeks (10 hours more than the normal work week), and discrimination due to the ethnicity of the workers (Taiwanese being given preference over the Chinese staff members). It also encompasses the incidents reported of 13 suicides in total between 2009 and 2010. The cause of these suicides is reported to have been the military culture in the supplier’s internal management. Some managers were so strict that they did not allow one employee to interact with the other and imposed fines for breaking this rule .(M. Moore, 27 May 2010)
One of the ways that Apple can ensure that its suppliers carry out their operations is through extensive reviews of the operations of these companies. An audit involves details testing of the company’s data, along with verifying compliance with local laws, including human resource laws. Such audits will help Apple understand the position of the workforce of the suppliers as well as address the findings of these audits. (IFAC (2014) “International Standards on Auditing”). Such audits help reveal the culprits and those personnel that were responsible in such unethical practices.
Furthermore, Apple can operate schemes such as Child Labor Remedial Program to help ensure that underage labor is discouraged and that children who come to work are sent to school to study under the expenses of Apple. This helps children get free education so that their parents, who couldn’t afford school, get some of the best education available. (Cristina A. Cedillo Torres (2012), It demotes child labor and gives them the opportunity to study and seek better careers.
Apple’s products are sold for their innovative design and ease of use. Since Apple charges a price on the higher end of the spectrum, its customers believes that Apple is already very profitable. They also believe, based on the sheer size of the organization, that it has been fulfilling its corporate social responsibilities. Therefore, if Apple increased the prices of its products, it will be hard to convince the customers that these funds are used to support increased salary costs.
If these customers are told that the staff at Apple is being paid less money for working in Apple since the profitability of the company is down, people are likely to take things negatively, hate Apple and ask it do something about it. On the contrary, if marketing is done to reflect the same fact, at least some people will be willing to trade the increased prices with a higher standard of living for the employees of Apple.
Similar to the case with Apple’s own employees, I believe that customers are less likely to help the employees of Apple’s suppliers by providing more money for the same products. This is due to trust issues since a customer cannot ensure that a third party will get more money if he provided more money to Apple and that this third party will then pay this extra fund to its deserving employees.
In order to provide assurance to these customers, Apple has released all information it had available on its website. This lists all the findings of independent firms that they have made after performing an independent evaluation of Apple and its suppliers’ systems. However, this information is not read by the average consumer as it relates to specific issues and is not linked directly from the main page of Apple. If these reports are read, the readers, generally, do not have the relevant skills to assess the impact of the practices and incidents reports. Therefore, it is unlikely that anyone will be willing to pay more money for an iPhone so that employees of Foxconn could get some extra cash.
Currently, Apple’s marketing strategy involves catering to the needs of the young, enthusiast people with innovative products that allows easier handling and gives the user a cutting-edge technology to play with. Apple believes in differentiation and believes in developing a unique marketing mix to enable its prestigious products get sold at top prices.
To expand upon its competitive advantage, Apple can promote its products more through advertisements. Some of its products, like Apple TV have not been promoted or advertised at all. Creating awareness of the existence of the product is important. Similarly, creating awareness of the features of products is necessary. Advertisements have helped the sales of many companies including those in the same industry as Apple. (Cristina A. Cedillo Torres 2012), Advertisements create awareness and like Broadband Wireless Exchange (BWE) web portal – which used to be the only website that taught how to connect broadband wireless networks –help in increasing the net sales revenue.
Similarly, Apple can try to enhance the value of its products by making them more unique and prestigious. Similar strategy has worked for several companies such as Bentley and Rolex. With more prestigious products, customers will be willing to pay more money while they get the same product that has several competitors and alternatives.
In conclusion, it can be seen that Apple has strict standards with respect to workforce of itself and of its supplier. However, there have been several incident reports that show the lack of fulfillment of Apple’s goals of Suppliers’ Responsibility policy. Yet, Apple has been known to operate and deal with such employers.
To enhance the business, Apple can sell its products as prestigious products and create advertisement in favor of the company’s sales. The success of these elements, depend, however, on the actual products that are being sold. If the product doesn’t add extra value, Apple is unlikely to receive any kind of extra money to pay better wages to its employees and those of its suppliers, as he had promised.

Reference 1. Jason D. O'Grady (2009) “Apple Inc.”
2. Apple Inc. (2010) "Apple 2010 Supplier Responsibility Report")
3. Apple.com, 2014
4. M. Moore (May 27, 2010) ‘Inside Foxconn’s suicide factory’, The Telegraph
5. IFAC (2014) “International Standards on Auditing”
6. Cristina A. Cedillo Torres (2012), “Do Conflicts Affect a Company’s Corporate Social Responsibility Policy?”
7. Owen W. Linzmayer (2004) "Apple Confidential 2.0: The Definitive History of the World's Most Colorful Company"