Business and Society on Apple’s Example
Against the backdrop of the complexity of doing business as a result of increased competition both on the local and global markets, companies are looking for ways of gaining competitive advantages that would allow them to achieve sustainable development and "survive" in the long run. In the modern world, trends in business development are closely connected with its social practice, as well as complicity in socially important projects. This new approach brings about the changing nature of relationships between the businesses, state, and society. Firstly, social activity of any business helps get confidence on the part of the state and society and relieve any possible tension. Secondly, it creates preconditions for improving the quality of life, which forms the potential to reduce conflicts in society.
Apple, Inc. (formerly Apple Computer, Inc.) is a US-based company that designs and manufactures consumer electronics, software, and commercial servers. It is one of the most valuable and prominent corporations in the world, with about 80 thousand employees and 437 retail stores Apple Store in 13 countries as of 2013 (Statista, 2015). Therefore, it is important to analyze how the company is concerned in the social sphere. Thus, the paper reveals the nature, structure, and types of Apple products and services, the external environment that influences the company, the influence of stakeholders on its success, and the company’s corporate social responsibility aspects.
Apple Products and Services
Apple Company’s products include a wide range of items and services: computer Macintosh, mp3 player iPod, smartphone iPhone, tablet PC IPad and IPad mini, Apple Watch, and TV Apple TV. Apple software is represented by the operating system Mac OS X, the media browser iTunes, a set of multimedia and software creativity iLife, a professional package for working with photos Aperture, a set of professional audio and software products for filmmaking Final Cut Studio, a set of audio tools Logic Studio, a web browser Safari and a mobile operating system iOS (Apple, 2015). Apple has made extensive work in creating innovative, remarkable and wonderful products that have beaten their competitors. The creation of customer-friendly products unlike competitive companies, whose innovations, as a rule, do not meet customers’ tastes has been the key element of the company’s policy.
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Thus, the ability of Apple Company’s specialists to guess and predict customers’ tastes and desires contributes to the highest rate of sales. In addition, Apple’s industrial design is a key factor that gained customers’ confidence and utmost loyalty. From the first day of the company’s foundation, software and hardware engineers have worked incessantly, developing more innovative and wonderful features for the products. In its technological progress, the company outstrips at least two years ahead of its rivals. What is more, every new IPhone product that is being released has created years ago. The competence to offer wonderful customer service experience and various in-store options has also contributed to Apple’s success. The services provided by Apple are presented by Apple Store, Apple Store online, Mac App Store, iOS App Store, iTunes Store, iBooks, and iCloud (Apple, 2015). The company’s sellers utilize pleasant language; they are skilled, experienced, and customer friendly. Thus, it should be noted that sellers provide a great contribution to the company’s success. Near 50% of people buying Apple products are first-time customers. Therefore, the company’s retail strategy is highly efficient, contributing to higher returns.
The Influence of External Factors on the Company
However, the success of the company depends not only on the excellence of its internal environment but also on the external factors, as well. One of the main external factors that can strongly influence Apple’s success is a social factor. The design and the quality have always been the most important in Apple’s products. The consumers’ purchasing power rose, and now people can buy luxury products such as those offered by Apple. People choose to purchase iPods, iPhones, and the newest technology iPads because those are the most qualitative and well-designed luxury products. In addition, the music industry has developed, having made a great social impact on the company’s success because iTunes is the main substantive music store. Therefore, Apple received much public attention as well as customer loyalty due to its proper consideration and application of the social factors in its operation due to its ability to determine and use the modern lifestyle for its benefit.
The second important external factor is the economic factor that is directly connected with the social one. The world’s economic conditions influence the purchasing power of people, having either positive or negative influence. Many countries suffer from economic recessions, which lead to high unemployment rates. Consequently, unemployed people are not in the position to buy expensive products. As a result, people’s purchasing power decreases and negatively influences the Apple products sales due to high prices.
Every organization, commercial enterprise, public authority, and association has a range of stakeholders that affect its activities or are affected by its activities now or in the future. Thus, it should be noted that Apple is successful partly because of its ability to meet the desires of stakeholders as well as its corporate social responsibilities.
The stakeholders can be divided into primary and secondary. Primary stakeholders are those who have a legitimate and direct impact on the business (inner circle). They are owners, customers, staff, business partners, and suppliers (Ditlev-Simonsen & Wenstop, 2013). Each stakeholder can influence Apple Company in their own way. Thus, there are five ways how primary stakeholders can influence the company.
Firstly, the owners of the company play a vital role in determining its operations. Their decisions influence the policies and directions of the company. Namely, they can increase investment opportunities, the growth of capitalization, brand value, and the general financial situation of the company. The value that Apple creates for its shareholders can be seen in huge sales and immense profits. The higher the profits of the company, the greater the income of the owners. Secondly, the customers influence the sales rates, the growing brand loyalty, as well as improve brand awareness. Customers are interested in effective and efficient products at reasonable prices. Apple products are high priced, but the prices are accepted by the consumers due to the high quality of the products and their esthetics. Thirdly, the stuff significantly impacts the company’s operations because it directly defines Apple’s HR possibility to renovate and improve products. In addition, the stuff influences the increase of productivity. The employees want a decent pay and career development, and the company provides them with such possibilities to make them work better. Fourthly, business partners influence the image of the company. The quality of cooperation also depends on the business partners. The financial stability of the partners helps to get the best contracts and reliefs when obtaining loans. Thus, Apple cooperates only with reliable companies since its own success depends on their competence. From the other side, Apple also stands as a reliable and stable partner. Fifthly, the suppliers influence the timeliness and reliability of deliveries, the quality of products, and warranty service. They must deliver right unhurt product to the right place. They also contribute to the customer satisfaction, which directly influences the financial situation of the company, thus its overall operations.
The secondary stakeholders are those who have an indirect impact on the business (distant range). They include government (local and federal), competitors, investors, and the local community, which also includes the media, non-profit organizations, and local activists that shape the public opinion. The government establishes taxes, imposts, or makes restrictions that affect the functioning of the company. It also provides a possibility to obtain public contracts. It controls the realization of social programs, not letting to ignore them. From the other side, the competitors can take the company’s market share, limit the establishment of high prices by providing more customer-friendly prices, or get patents on the needed items by the company. From the other side, investors make significant contributions to the company’s budget, and the media spreads the information about the company, making a positive or negative advertising. Public organizations and activists can shape the public opinion about the company, as well.
Corporate Social Responsibility
The company that complies with the corporate social responsibility considers the interests of the society through taking responsibility for its actions and their influence on customers, suppliers, personnel, owners, local communities and other stakeholders in the public sphere. CSR is interpreted as a philosophy of conduct aimed at sustainable development and conservation of resources for future generations, as well as corporate citizenship. It is interpreted as a form of conduct that suggests that any company is a citizen responsible for their actions to the public. The companies must realize and solve ethical and social concerns caused by their actions. Corporate social responsibility is the integral commitment of the company to be responsible for its impact on the environment, society, and the economy, in general. The most significant ethical challenge of the company is the status of its social and ethical liabilities to employees, consumers, and the planet.
An important controversial corporate social responsibility issue associated with Apple concerns Chinese suppliers. Awful working conditions at Chinese factories, where enterprises-subcontractors Foxconn and Inventec manufactured Apple production, have been made public. Chinese employees had exhausting 24-hour shifts, overcrowded dorms, were exposed to toxic chemicals and terrible explosions. After the issue had been made public, Apple checked its suppliers and found that they violated the company’s Supplier Code of Conduct. In this case, changing the suppliers would more effective than asking them to improve their conditions. However, the other part of the problem is that Apple is not legally responsible for what is going on at Chinese plants. Thus, Apple has to decide what approach is correct, moral or legal (Duhigg & Barboza, 2012).
Such ethical challenges can have a significant influence on the company’s success. For example, such socially responsible actions are not always the best decision for the business. Through minimizing costs due to cheap labor, Apple managed to attain high profits. However, improving the working conditions would increase the labor costs, which, consequently, would lead to higher product price and customers’ inability to buy.
Thus, Apple Inc. has made an outstanding work in creating innovative, remarkable and wonderful products that have beaten their competitors. What is more, it offers wonderful customer service experience and in-store preferable options. However, the company strongly depends on the external factors, mostly from social and economic factors that are interrelated.
At the same time, Apple’s success is determined by its ability to meet the desires of stakeholders, as well as its corporate social responsibilities. The primary stakeholders can influence the company in five ways: through owners, customers, staff, partners, and suppliers. For example, the owners’ decisions influence the company’s policies; customers impact profits; the stuff determines the performance of the organization; partners its image, suppliers the quality of deliveries, etc.
It should be also noted that it is difficult to assess the role of corporate social responsibility in the company’s growth. However, an increase in customer loyalty, which reflects their willingness and desire to buy the products offered by the company, enhances the company’s reputation as an attractive employer, forms its perception by the society as respectable and responsible "corporate citizen" - factors that directly affect the increase in sales, motivation, as well as desire of the state and society to interact with the company. In addition, compliance with the principles of CSR increases the market value of the company through growth in the value of intangible assets.
However, Apple Inc. is not as great in corporate social responsibility as it is in its profits. The company’s suppliers violate the company’s Supplier Code of Conduct. The working conditions in China are awful, but there is a controversy on this issue. The company is not legally liable for what is going on at Chinese plants. Thus, in this case, it has to decide on which option to choose a legally correct or morally correct one.