Running head: ASSIGNMENT 1: CORPORATE RESPONSIBILITY

Assignment 1: Corporate Responsibility and Marketing Strategies

Student: College Guy
Professor: Dr. Neil Mathur
Course: BUS 508 Contemporary Business
University: Strayer University
Date: January 26, 2014

Assignment 1: Corporate Responsibility and Marketing Strategies

Question 1:
I believe Apple Inc. [mostly referred as Apple in this document] has met the ethical and
social responsibility towards general public, employees, customers and shareholders/investors.
Apple positions itself to be very environment conscious and continuously working to reduce the
foot print of the company and its products on the planet (Apple Inc.). Apple has a recycling
program for its used products; it sends gift cards to customers in return for the used products, if
the products do not have any monetary value they recycle them responsibly. Apple reports the
environmental foot-print of each of its product on their website to show how much energy
efficient they are and how Apple is choosing more biodegradable elements in its products,
packaging and facilities. Apple has multiple offices and datacenters in United States and as of
March 2013 seventy five percent of them are fully powered through renewable energy sources

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(Kastrenakes, 2013). Apple is continuously trying to improve the situation and aiming to rely
entirely on renewable energy sources in future.
To improve ethical awareness within its employees, Apple has a business code of conduct
published and easily available via intranet website within the company and to its investors via
shareholder website (Business code, 2012) which explains in detail on various topics including
its well known secretive way of releasing its products. Apple also has a Business conduct
helpline available for its employees to resolve ethical dilemmas, report conflicts of interest and
seek direction in making ethical decision. Recently Tim Cook, Apple CEO has reminded all
employees to review Apples business conduct policy via corporate email (Marie, 2013) which
shows the importance Apple gives to Ethics within the company. Apple treats its employees very
well; pays pretty good salaries to employees and rates to contractors, Apples has a very good
benefit program for its employees, even the part-time employees are entitled to benefits at apple
(Fiegerman, 2012), it provides shuttle service to many locations from many places in Bay area to
campus.
Apple products are very safe compared to many other competitor products, Apple pays
attention to details, e.g.: To avoid tripping over a charging cable, Mac book charger has a magnet
instead of a hard stick in plug as we observe in many Windows PCs. All of its products are well
thought and provide lot of convenience and consider customer health and safety, as we see in the
case of latest ear phones from Apple, they have the speakers going sideways instead of directly
in to ears as most of the conventional ear plugs do, this restricts music directly hitting the ear
drum and long term exposure may have adverse impact on the ears. Apple products are well
sealed and static resistant, the materials used in production are not cheap and low quality parts,
which improves the durability of its products. Apple provides lot of variations in products to
choose, to a customer which attracts customers at all levels. There are about ten to twelve flavors

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of latest iPhone based on color, size of memory and external material. Apple has a very good
refund policy, items can be returned online or returned in store, there is about 14-30 days to
return items, Apple provides full refund instead of charging for re-stocking fee. If there is a part
malfunction, apple product can be exchanged for a new one within one year of purchase for
nominal or zero price. Apple considers customers complaints and response rapidly by multiple
means and aims to delight the customers (Denning, 2011). Apple listens to customers at the
stores, online and also via telephone and improvises on its services, customer support and also
their products.
It is very obvious that Apple takes good care of its shareholders; we can clearly observe
that from Apples revenues and profits from past several quarters, Apples share has gone up five
times within past five years. Apple provides all of its quarterly, annual reports along with
financial statements and exhibits with SEC and complies with SEC policies.
Question 2:
Publications of ethics and social responsibility violations of its suppliers, mainly at Hon
Hoi Precision, also known as FoxConn had impact on Apples reputation and mainly no impact
on sales and share value. In 2011 there were fourteen suicides at FoxConn and later on there
were many riots, suicide protests by workers against the very long working hours, lack of
insurance, workplace safety, horrible facility maintenance , incidents of using Child labor, lack of
injured workers compensation, army camp style management and others (McGrath, 2012). Apple
has handled things very carefully and assigned right people and started remediation methods,
published supplier code of conduct, increased audits in its supplier firms, provided training, to
improve situation and reputation; Tim Cook, the CEO of Apple talked about Foxconn and how
his company is trying to improve the working conditions for employees and workers in its
suppliers factories and how seriously Apple is taking the allegations (Knibbs). Apples
reputation had an impact during the time of events, created a buzz in media world; Apple got a

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bad name within its investors and stake holders. Later on, Apple was able to manage out of the
situation very well.
Overall there is no impact to sales or revenue or Apples share value. Apple shares might
have taken a small hit for few days when there were publications by media, but overall share
value was growing in 2010 and 2011 when all of reports were being published. Apple is still
considered the most admired company in the whole world as per Fortunes Worlds most Admired
companies for 2008-2013; six years in row (Shaughnessy, 2013). Apple products are very well
received in the market; there are no aversions or hatred towards Apples products based on the
allegations. We usually see the drop in sales when there are negative allegations on companies,
we have seen this in case of Paula Deen based on her racial comments and also with Duck
Dynasty and its products when Phil Robertson has made anti-gay comments and cause big dent
in their reputation, we have not seen this with Apple.
When iPhone 5s was released in September of 2013, stores reported people standing in
long lines at Apple and its partner stores to get the first piece. Today there are hardcore fans to
Apple products than for any other company. Apple products are growing popularity even in
China where the allegations of horrible working conditions have been reported. Based on my
personal observation, Apple stores are among the most crowded stores at local malls. Even with
heavy competition for Samsung, LG, Nokia (now Microsoft) and Motorola, Apple iPhones are
still most commonly used smart phones in United States. Apples App store has more than a
Billion applications available to end users. By observing the Apples growth pattern, it is safe to
say that the impact of supplier violations is minor.
Question 3:
To improve the working conditions and abide to Fair Law Association (FLA) policies
Apple has come up with and published supplier code of conduct ("Apple supplier," 2012) for
all its suppliers to adhere who provide parts to its products. To ensure that its suppliers adhere to

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wage and benefits standards going forward, Apple has to strictly enforce the supplier code of
conduct and also increase the supervision and auditing of the supplier factories, HR and pay roll
systems up to allowed by the local and international laws. Many of the rules and regulations
which are illegal in US are acceptable in other countries. As Apples suppliers are mainly in other
countries than US, Apple can set up strict rules and guidelines more close to US laws in addition
to local government policies and Fair Law Association (FLA) laws, as most of its products are
used by consumers in US. Apple can also open up complaint/suggestion boxes (online, in factory
and via phone) from workers in supplier factories to understand and closely monitor the working
conditions and get feedback on wages and benefits. Apple can restrict the number of hours a
worker can work in its supplier factories. Apple can create guidelines in its code to have onsite
help to talk with workers and understand their problems and work with supplier factories to solve
them. Apple can guide its suppliers to setup onsite and close to campus medical facilities for
workers working in its supplier factories.
Apple can work with local media and government to do surveys from general public
about their supplier practices at factory facilities. Apple should request the ethics code of conduct
as one of the primary pre-requisite from their suppliers as part of the initial RFP Request for
proposal. Apple should get feedback suppliers employees to understand how well the code is
followed by its upper management in the company and should enforce supplier to improve it
before renewal of contracts.
Apple should stop buying parts from suppliers with tainted reputation, or suppliers with
weak or no ethical code of conduct. Apple should compare the working conditions and wages of
workers in its supplier factories to competitor factories in the area and pass regulations to
improve the wages to meet market standards.
Question 4:

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Apple customers would be willing to pay more for its products to provider better wages
and benefits to suppliers workers. Apple can make this happen by showing the reasons behind
increase in prices, and how additional money will be utilized for worker compensation and
benefits. Apple should advertize in TV, publish articles on its website and provide information to
Media on how the additional money will be utilized. This is much similar to Ms. Lee Rhodes and
her Glassybaby in the case study, Glassybaby gives 10% of its revenues for cancer treatment.
Another suggestion that I can make is that, some percentage of increase in salaries for workers
should also come from Apples profits to show consumers that Apple is not only charging more
for products but also taking a cut in their profits to provide better working conditions for
workers.
Apple and its main founder Steve Jobs do not have very good name as Philanthropist,
there is no public record that Steve Jobs has donated any money (Sorkin, 2011). After Tim Cook
took over Apples CEO position, he has made some donations but compared with other
companies with high revenues and profits; the donations made by Apple are very negligible
compared to its revenues and profits (Emerson, 2012). Apple can improve its image and
reputation in the world by giving some percentage of profits to suppliers workers through
multiple programs and incentives.
Today Apples products are most popular in the market; iPhone is the best selling smart
phone out there in market. Apple and its products have huge fan base and many of the competitor
smart phones from Samsung or Microsoft are not comparable to iPhone. With such a popularity,
increasing a minor percentage E.g.: 3-5% of price will not have any impact on product sales.
Most of the Apple products are sold with network connection also known as data plan, the
minimum data plan is very expensive and costs up to $40 per month for many carriers. Some of
Apples iPhone customers take data plan because they are intrigued with iPhone and Apple

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products. When customers are willing to pay additional money for seldom used data plan as they
stay home mostly where there is Wi-Fi connection as an alternative to data plan. Customers
should be willing to spend a bit more money to improve working conditions and salaries for
suppliers workers.
Question 5:
Apple has excellent market strategy for its products; Everyone remembers those PC and
Mac comparison commercials, which used to portray Apple Mac computers as cool and trendy
for Generations X and Y and for everyone at home where as Microsoft PC was shown as
business computer with bugs. In reality, Microsoft operating system is more flexible and
customers can customize and make modifications and create applications relatively easy, where
as you need to go to App Store for installing/upgrading any iOS applications. Microsoft or
Samsung devices allow users to copy MP3 files, and play them without any intermediary
software such as iTunes, a mandatory application for Apple to copy songs in to iOS applications.
Even with less flexibility Apples products are highly sold in market today due to its design and
performance of its products and mainly its Marketing strategy.
Apple does not really advertize new versions of iPhone releases, rather it keeps it secret,
there are no beta releases, and there are no pictures or commercials in the market before a new
version iPhone is released. It creates buzz in the market which generates mystery about its
product. In addition to its own marketing, Apples iPhones are also advertized by other
companies such as network providers such as AT&T, Verizon and other companies which make
protective cases and other accessories for iPhones. Apple maintains such secrecy before releasing
its iPhone products; it has worked greatly for them. Another way Apple products are advertized
is by word of mouth. Today many of smart phones in the market from Samsung, LG and

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Microsoft have similar functions as iPhone, but in my view the secrecy/mystery and word of
mouth advertizing for iPhone has helped to maintain its leadership in the market.
To improve competitive advantage over global market place, Apple should sell its
products more in other countries; expand its base out of US. The usage of smart phones is at
verge of getting saturation in United States, consumers in US are tied to data and voice plans
from network providers in US. Until latest generations of iPhones, iphones were sold at a later
release dates in Europe, India and China than in United States. There is a lot of fan base for
Apple in China and India, Apple should en cash that by making products affordable in those
countries. Customers in US do not replace their phones until their contract ends with he network
provider, which is usually two years from the contract start date. Most of the countries outside of
US are not bound to network/data plans for the phones as they use GSM technology; this
provides flexibility to consumers to buy more than one phone in two years. Smart phones are
getting more popular in India and china where the population is very high. Population of India
and China combined is more than six times the population of United States (CIA World
Factbook); if Apple can capture a small percentage of the market in those countries it will have
more customer base than it does in whole US which bring higher revenues. Apple should start
customizing their products and make them consumer friendly in other countries, such as make
menus in native languages, create local custom applications etc.
As word of mouth advertizing has proven working for Apple, they should start giving
some samples of their products to celebrities in India where the common public trend is to follow
the celebrities and mimic their product usage. It has worked for other companies and products; it
should also work for Apple.
Apple should start thinking about making their products more flexible and easy to
customize, Apple is very popular among brand, but more savvy users with computer background
started to lean more towards Google Android based phones from Samsung and LG as they have

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more flexibility and customization options. With computer skills and techniques being very
common to kids in Generation Y and Z, Apple should think about concentrating on them and
their tastes and Apple products more flexible.
Apple should innovate more, there have been some improvements and modifications to
its products in past 3 years but there has not been a WOW product release. They should enter
new markets, start coming up with new products such as long awaited Apple TV or they should
get in to wearable gadgets such as wrist watches, glasses, motion controlled devices, devices
with flexible screens and devices which look cool but monitor human bodys current health such
as temperature, sugar levels, blood pressure etc.
Last but not least, Apple should improve its philanthropist image; they should start
donating more to needy and charitable foundations. That usually helps in both ways; it improves
the reputation and also works as advertisement.

References
Apple Inc. (n.d.). Apple and the environment. Retrieved from
http://www.apple.com/environment/
Apple supplier code of conduct. (2012, JANUARY). Retrieved from
http://www.apple.com/supplierresponsibility/pdf/Apple_Supplier_Code_of_Conduct.pdf
Business code. (2012, DECEMBER). Business conduct the way we do business worldwide .
Retrieved from

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http://files.shareholder.com/downloads/AAPL/2916593555x0x443008/5f38b1e6-2f9c-45
18-b691-13a29ac90501/business_conduct_policy.pdf
CIA World Factbook. (n.d.). Country comparison :: Population. Retrieved from
https://www.cia.gov/library/publications/the-world-factbook/rankorder/2119rank.html
Denning, S. (2011, AUGUST 26). Another myth bites the dust: How apple listens to its
customers. Retrieved from
http://www.forbes.com/sites/stevedenning/2011/08/26/another-myth-bites-the-dust-how-a
pple-listens-to-its-customers/
Emerson, R. (2012, FEBRUARY 3). Apple's donations to charity surpassed $50 million: Report.
Retrieved from
http://www.huffingtonpost.com/2012/02/03/apple-charity-donation_n_1253185.html
Fiegerman, S. (2012, JUNE 18). Why working at apple is a dream job. BusinessInsider.
Retrieved from
http://www.businessinsider.com/heres-what-employees-really-love-about-working-for-ap
ple-2012-6?op=1
Kastrenakes, J. (2013, MARCH 21). Renewable energy now powers 75 percent of apple's
facilities. Retrieved from
http://www.theverge.com/2013/3/21/4132402/apple-now-using-75-percent-renewable-en
ergy-across-operations
Knibbs, K. (n.d.). Apple ceo talks foxconn, tries to mend reputation. Retrieved from
http://www.mobiledia.com/news/128273.html
Marie. (2013, NOVEMBER 21). Tim cook reminds apple employees to review apples business
conduct policy. Retrieved from
http://mobileorchard.com/tim-cook-reminds-apple-employees-to-review-apples-businessconduct-policy/
McGrath, B. (2012, FEBRUARY 7). Apples sweatshop supply chain. Retrieved from
https://www.wsws.org/en/articles/2012/02/appl-f07.html

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Sorkin, A. (2011, AUGUST 29). The mystery of steve jobss public giving. Retrieved from
http://dealbook.nytimes.com/2011/08/29/the-mystery-of-steve-jobss-public-giving/?
_php=true&_type=blogs&_r=0
Shaughnessy, H. (2013, FEBRUARY 28). Apple remains world's most admired company,
followed by google and amazon. Retrieved from
http://www.forbes.com/sites/haydnshaughnessy/2013/02/28/apple-remains-worlds-most-a
dmired-followed-by-google-and-amazon/