Corporate Responsibility and Marketing Strategies
Student Name: Gaurang S. Patel
Professor’s Name: Dr. Bridges
Course Title: BUS 508 – Contemporary Business
Date: 27th April 2014

Ethical and Social Responsibilities
The two ethical and social responsibilities towards the world are 1) Environmental Responsibility 2) Supplier Responsibility
1. Environmental Responsibility: Electricity is used to power electronic devices. As more and more products are being made the energy demand has gone up significantly. Since, most of our energy comes from burning fossil fuel. It pollutes environment leading to environmental issues and health issues. i. Toxin free products: Many substances used in electronics are harmful to earth and its living beings like Mercury, PVC, arsenic, lead, BFR and phthalate. Apple has gone over and beyond to design their products which are safer and eliminate the use of these toxins. ii. Recycling: Earth has finite resources and profuse use of the same will leave us with nothing. The only way to have those resources conserved for our future generation is to recycle the existing once. All the materials in Apple products are made more efficiently so they last longer (Doesn’t need to be replaced). And once they reach their end of the cycle, they get recycled. Apple retail stores take back their products for efficient recycling. Their products for packaging and gift cards include recycled or recyclable materials. iii. Climate Change: Burning of fossil fuel creates carbon emission. This carbon foot print leads to climate change. Apple has made energy efficient devices to counteract the previous generation power hungry devices. To reduce their carbon foot print, Apple is running 100% of their data centers and 86% of their corporate offices on renewal energy. They are also powering their retails store with use of renewal energy.
2. Supplier Responsibility: Apple has massive sales of $171 billion in revenues. Apple products are designed in USA. But, since production and workforce is cheaper in foreign nations, they build their products through suppliers. i. Eradicate unethical hiring ii. Exploitation of workers iii. Excessive work hours iv. Protecting student workers from exploitation v. Preventing under age labor vi. Responsible sources of minerals vii. Training work force viii. Worker well-being ix. Emergency preparedness
Table 1.1 Labor and Human Rights Category | Practices in compliance | Management Systems Compliance | Anti-discrimination | 87% | 78% | Fair treatment of workers | 96% | 88% | Prevention of involuntary labor and human trafficking | 87% | 85% | Prevention of underage labor | 97% | 91% | Juvenile worker protection | 73% | 66% | Working hours | 95%* | * | Wages and benefits | 75% | 72% | Freedom of association | 99% | 97% | Overall compliance | 81% | 77% |

Table 1.2 Health and Safety Category | Practice in Compliance | Management Systems Compliance | Occupational injury prevention | 72% | 63% | Prevention of chemical exposure | 82% | 76% | Emergency prevention, preparedness, and response | 77% | 67% | Occupational safety procedures and systems | 80% | 78% | Ergonomics | 70% | 65% | Dormitory and dining | 70% | 76% | Health and safety communication | 73% | 61% | Overall compliance | 77% | 71% |

Apple has profound 451 audits for the past year (2013). Apple has set a code for a maximum of 60 work hours per week with at least one day rest per week. It also protects workers against discrimination on the basis of race, color, age, gender, ethnicity, religion, etc. They also prohibit pregnancy test or medical for discrimination.

Ethics and Social Responsibilities Violations
Labor groups have complained about low morale, substances wages, over crowdies and excessive hours on Apple’s suppliers, which has lead to suicides. A typical worker shares a dormitory room with 9 other workers and works 11 to 13 hours shifts. Apple has been criticized by environmentalist because of its supply chain pollution. Apple suppliers had several pollution problems from toxic gases to heavy metals sludge. The toxic discharge from Apple suppliers was encroaching into local communities and environment. They have also face criticism over denied injured workers proper compensation, punitive actions to keep employees in line. Employees have also been fined for not reaching production target.

Wage and benefits standards policies for Supplier’s employees 1) Training Workforce: i. Apple needs to convey its supplier standards to the supplier’s work force. Workforce should be trained for these code and local laws so they can know if their rights are being violated. They also need to emphasize on imparting knowledge for fire safety, hazardous chemical management, personal protection equipment, industrial hygiene, etc. 2) Making sure workers voices are heard: i. An organization needs to be setup which can hear the plight of workers and directly interact with auditors. This will help in satisfaction of workers needs and communication of grievances directly up stream. It will also help in pointing out any loop holes left over by the policies.

Customer point of view on increase selling prices
I believe that Apples customers will pay more for their products in lieu of better wages and benefits for supplier’s workers. Apple products have been always above their competitor’s prices for equivalent or higher hardware specifications. On an average, supplier worker works for $130 a month. A slight increase can be easily met by Apple themselves who have annual sales of $171 billion and staggering $63.6 billion in profit. Apple truly sustain on their product’s design, innovation and brand prestige. Their biggest market is USA where phones are provided at subsidized rates in exchange for relationship boundation. As for the other markets, they command the high end price range which will not affect enthusiasts and rich people.

Apple’s current overall marketing strategy and improvements
Apples competitor in smart phone sale is Samsung Electronics who sales close to 300K units annually with market share of 31%. Apple comes second at 150K units and market share of 15.6%. Since, Samsung Electronics releases at least 8 or more new smart phone every year compare to just two phone from Apple Inc. Apple doesn’t offers its costumer different option in screen size, hardware, software, etc. I believe if they release different configuration of phone to target business, gaming and everyday use; they can significantly increase their market shares.
Apple has started to compete in foreign smart phone market as well, but they charge a hefty price for their products. In order to target the middle class segment they need to release affordable smart phones. This will help Apple to capture bigger market shares in new and evolving markets. On some of their products, Apple charges more than 100% of their actual cost as profits. They can release variants of their products with lesser configurations, which are far cheaper (Considered a step behind latest technology). Apple also needs to focus more efficiently on the software/apps for its products which make them popular among the millennial and younger generation.
Sources
http://www.gartner.com/newsroom/id/2665715

http://venturebeat.com/2013/10/28/apples-170-billion-2013-amazing-and-amazingly-forgettable/

http://www.marketwatch.com/investing/stock/aapl/financials

http://images.apple.com/supplier-responsibility/pdf/Apple_SR_2014_Progress_Report.pdf

http://factsanddetails.com/china/cat9/sub61/item2282.html

http://www.reuters.com/article/2011/08/31/us-apple-china-idUSTRE77U4M620110831

http://www.pcworld.com/article/2066880/another-apple-supplier-faces-criticism-over-labor-conditions-in-china.html

http://www.apple.com/supplier-responsibility/labor-and-human-rights/