Apple/McDonalds

Control operations

Technicians are of utmost importance for quality control, experienced workers

Acquisition

"Apple provides training for new employees, which can range from a few days to a few weeks, depending on the position." Apple website. When Apple decided to outsource it's operations to partners overseas, HR would have engaged in planning for the downsizing of the US operations. This would have involved developing redundancy packages, possibly training and relocating certain employees, as well as overseeing the overseas recruitment program. Centralised approach to acquisition as potential applicants must submit details through one central website or upload a video via snapchat. Prospective employees do a short introductory quiz = see if they are a good fit. After this stafe, a M store may contact the employee and call them in for a 30 minute interview. The website also mentions "The interview consists of a face to face interview and mahy also include a brief supervised audition on shift"

Outsourcing (operations)

Apple can focus on core activities such as product development, closer access and proximity to Asian market, KPI levels are predetermined and Foxconn are contractually bound to meet them via use of SLAS. Intellectual property needs to be guarded, language barriers = miscommunication, reputation affected by actions of outsourcing partners O it services + point of sale software, inputs e.g hamburger buns → cost reduction by using specialist functions. However requires company to relinquish control of supplier Eg. July 2014 a supplier in Shanghai using expired and contaminated meat. Bad publicity for mcdonalds and a decline in sales of 7% for july. Shortage of beef and chicken for China stores for 3 weeks. .

Job design

Apple claims to be more interested in the personality than the technical knowledge of a candidate applying for a position in an Apple retail store. Apple makes it clear it is looking for extremely hard-working and committed individuals. On the company website it states "this isn't your cushy corporate nine-to-fiver" and reinforces the "hard work" message several times with statements such as "Making it all happen can be hard work. In contrast, Apple's outsourcing partner's have minimal requirements of their factory employees due to high turnover and the constant need to recruit. According to an interview reported in Sydney Morning Herald 8 November 2012 , " Foxconn experiences a steady turnover of workers who need to be replaced. The requirements to be a factory worker for Foxconn are minimal. The minimum age requirement is 16, good health and some Secondary School education, according to Hao Yaya, a 22 year old recruiter for the Taiyuan Factory" Have specific tasks built into their job design with little or no scope for change. A sheet of instructions and specific timeframe for a job creates a task oriented approach = consistency, efficiency and uniformity

Development

Apple promotes it's training as a benefit of working for the company. the Apple website states; "Every location provides regular training, which counts as work time, to keep you up-to-date on the latest Apple products" Prior to first shift, a new employee must complete an induction program both in store and online via the MeTime portal. M Aus is a Registered Training Organisation with 40 trainers and assessors so it can deliver certificates in a variety of courses from crew trainers completing a Certificate II in Retail Services to restaurant managers obtaining an Advanced Diploma. As of 2018, the RTO had awarded almost 41,000 qualifications. Has the Hamburger University (8 campuses). Since its inception in 1961, it has trained more than 275,000 employees and franchises worldwide in courses that usually run for 5 days at a time, run in 28 languages. Ray Kroc, founder of M said "If we are going to go anywhere, we've got to have talent. And, I'm going to put my money in talent" → M Aus spends 40 mil annually on training. Formalised training + on the job experiences = tailor development opportunities to benefit needs of employee and company

Technology (operations process)

Apple suppliers use automation to compensate for unskilled and/or inexperienced workers, invested in Robotics Technology → mobile ordering (mymaccas), automated drink dispenser, olysurene clamshell containers to hold sandwiches → new paper based wraps that combined tissue, polyethylene and paper = keep food warm & prevent leakage

Internal sources of finance

Apple's retained profits remained stable at around 75% of shareholder's equity between 2016 and 2017,decreased to 66% of shareholder's equity in 2018 where RE was US $70,400 mil. Retained Profits → 2018 Mcdonald's made profit of US$5.9 billion. Management could've chosen to keep all of its profit in the business (to fund future projects), however gave 3.3 bil to shareholders via dividends.

Place

Approximately 30% of Apple sales are made through direct distribution channels (online and Apple stores) and 70% were through indirect channels such as network carriers and other retailers Distribution: producer → retailer → customer channel Channel Choice: 38,000 restaurants worldwide, M uses selective In Feb 2018, M and Uber Eats celebrated the 1 year anniversary of their partnership. During this year the partnership saw: The number of restaurants where uber eats is available grew from 200 to 7000 The sale of apprx 75 million nuggets and 4.5 mil big macs 24 million miles driven Early 2019, store sales grew 6.5% gloablly In July 2019, M US expanded its delivery option with DoorDash a courier service = save on delivery fees charged by Uber

Disputes

April 2012 = 200 company employees threatened suicide at foxconn Wuhan facility. The workers climb onto the Factory roof and threatened to jump in the second collective suicide threat over wages and conditions at the plant. October 2012 = dispute between assembly line workers and quality control managers as a result of the new iPhone 5 aluminium casing being scratched in the production process. Workers disputed the lack of training and abuse by managers, resulting in more than 3000 factory workers going on strike. Under the compliance partnership between M and FWO, a report is issued about the number of M staff that request assistance from FWO. The total requests received compared to the total number of employees is around 0.03%

Marketing approach

As the market for smartphones has become established, the focus of marketing iPhones has become persuasive rather than informative = greater focus on market research and making products that meet the needs and wants of customers e.g. Apple conducts regular surveys of existing iPhone customers to assess their response to various applications and design features Marketing approach that prioritises meeting the needs of customers. In a webcast published in May 2015, Steve Easterbrook, stated that the company plans on being "customer centric" and to bring "the customer voice into the heart of the business

Consumer law

D+ M advertising → Under the Competition and Consumer Act 2010, Apple must ensure that its promotional information does not convey a false impression of the iPhone, or suggest certain qualities that the smartphone does not have. In 2015, a class action was filed against Apple included complaints regarding their advertising campaign, claiming that it misled consumers by suggesting the upgrade would increase the performance and battery life of iPhones. Price discrimination → 2017, Russia's antimonopoly agency found Apple guilty of forcing retailers to coordinate over prices of iPhones. Moreover, in 2014, a number of iPhone 6 Plus owners in the US filed a class action suit, accusing Apple of fraud and violating California consumer protection laws and seeking unspecified damages as their phones had been bent out of shape after carrying them in their back pockets Implied conditions → the smartphones are fit for purpose, they correspond with their description and Apple will make available spare parts, repairs and comply with express warranties. Moreover, in 2014, a number of iPhone 6 Plus owners in the US filed a class action suit, accusing Apple of fraud and violating California consumer protection laws and seeking unspecified damages as their phones had been bent out of shape after carrying them in their back pockets Warranties → Apple's iphone 1 year warranty states that "customers are entitled to a replacement or refund for a major failure and for compensation for any other reasonably foreseeable loss or damage" McDonald's Australia is bound by the labelling requirements stipulated in the ANZFSC McDoald's Australia complies with this code and data regarding product ingredients, nutritional and allergen information is made available on the company website. 2015, Patrick Hatch reported to Syd MH that M had breached food labelling laws as new animated boards made cus, wait up to a min to view energy info, which was then only displayed for 7 sec, M amend digital menu Spam Act 2003 prohibits the unsolicited sending of electronic messages that advertise or promote a business or goods. 2012, Australian Communications & Media Authority found M in breach, issued the company with a formal warning as their happy Meal website had a "send to friends" feature which sent emails promoting games and activities without the consent of the recipient . ACMA also found that the messages did not allow for an unsubscribe facility which is mandated in the Spam Act = M removed feature from website

Market segmenation

Demographic → The high price of iPhones (relative to competitors) is targeted at higher income customers globally. Geographic → The importance of these developing markets (India, Asia) can be seen in changes to the appearance of the iPhone, such as a larger screen size which is preferred by Asian smartphone users. 2017 Apple relocated the production of the low cost iPhone SE model to India in attempt to attract customers in that growing market Psychographic → iPhone users are more concerned about viewing their iPhone as a status object than their Android counterparts, and increasingly so. Behavioural → In the market for smartphones, network carriers will segment customers according to their level of usage. For example, a cheaper plan will offer less phone and data usage than expensive ones Demographic → Happy Meals contain a toy which appeal to young children, the McCafe barista made coffee, sweets and table service appeal to older costumers. Psychographic → In March 2019, M Norway launched vegan nuggets , AUS grilled chicken, salads, fruit Geographic → allows the business to add or alter menu items to suit local tastes, India = Masala Grill, Aloo wrap, Maharaja Mac, Japan = Teriyaki Mcburger, Shrimp Fireo, US= Bacon Clubhouse burger, Artisan Grilled Chicken Sandwhich

Efficiency

E(11.7%), A/R (6.4 times, 57 days) → E(11.6%), A/R (5.4 times, 67 days) This represents an overall decline in the Company's financial efficiency due to : A decrease in sales revenue attributed to A's loss of market share in China and the appreciation of US currency and an increase in total operating expenses, largely related to increased expenditure on all categories of expenses in the given period. Became less efficient in collecting A/R 82% → 83%

Global market

Economic outlook = developing economies such as China and India are currently experiencing the highest levels of economic growth in the world, advanced economies experiencing relatively low economic growth The availability of low interest rates is reflected in Apple's debt to equity ratio, which increased from 107% in 2014 to 241% in 2018. If interest rates increase in the future the company may need to reconsider its existing level of debt Economic Outlook → viewed as 'recession proof' in developed countries (often performs better in economic downturns due to the perceived value for money of its food). Conversely, when economic conditions are improving, consumers may spend their extra disposable income elsewhere, and McDonald's may suffer. Availability of Funds → currently has available US$3.5 billion line of credit should it be needed. Low interest rates globally have ensured businesses like McDonald's have relatively easy access to funds if required. Interest Rates → McDonald's has fixed 91% of its total debt at an average interest rate of 3.2% p.a., a reduction from 3.3% p.a. In 2017. As a comparison, in 2007, Mcdonald's had fixed 58% of its debt at an average interest rate of 4.7% p.a.

Supply chain management

Engage in long term agreements with key suppliers to negotiate lower prices and ensure the availability of components. Challenges were echoed in the following extract from Apple's 2016 Annual Report: "Although most components of the iPhone are available from a number of sources, many components are obtained from a single supplier. This exposes Apple to risks such as shortages and pricing fluctuations. Such supply chain uncertainties may adversely affect Apple's ability to achieve its operational objectives, such as speed and flexibility.". Uses warehousing to distribute phones to retailers. Global sourcing e.g Korea (LCD screens, chipset), Europe (Gyroscope), Mongolia (rare minerals used in glass polishing), USA (software, audio chip) The logistics system Keystone distribution facilitates the flow of supplies within the three legged system (suppliers, M, franchises), reduce L costs by using local suppliers e.g 100% Aus beef. 2014, labour disputes between dock workers = 45% decline in import of French fries from the US to Japan. Mcodnald J announced that it would only serve small orders of fires until regular supply could be restored

Training and development

For example, when 3 new models of the iPhone were launched in 2019, Apples retail employees would have received training and design and specifications of the model and "geniuses" were trained in the repair and maintenance of these new products. Customer service etiquette is spelt out in a former Apple Store training manual: A: Approach customers with a personalized warm welcome P: Probe politely to understand all the customers needs P: Present a solution for the customer to take home today L: Listen for and resolve any issues or concerns E: End with a fond farewell and an invitation to return Before being offered the opportunity to purchase a store, potential franchisees must undergo extensive T + D - minimum 9 months in Aus full time. Ray Kroc, founder of M said "If we are going to go anywhere, we've got to have talent. And, I'm going to put my money in talent" → M Aus spends 40 mil annually on training. Prior to first shift, a new employee must complete an induction program both in store and online via the MeTime portal M Aus is a Registered Training Organisation with 40 trainers and assessors so it can deliver certificates in a variety of courses from crew trainers completing a Certificate II in Retail Services to restaurant managers obtaining an Advanced Diploma. As of 2018, the RTO had awarded almost 41,000 qualifications. Formalised training + on the job experiences = tailor development opportunities to benefit needs of employee and company. Has the Hamburger University (8 campuses). Since its inception in 1961, it has trained more than 275,000 employees and franchises worldwide in courses that usually fun for 5 days at a time, run in 28 languages

Debt

For the first time in Apple's history, external debt was of greater value than its shareholders equity in 2014. Overall, Apple's level of debt compared to owner's equity (gearing) increased significantly in recent years (from 1.43% in 2015 to 241% in 2018) Said purpose of debt is "repurchases of our common stock and payment of dividends under our program to return capital to shareholders, funding for working capital, capital expenditures, acquisitions and repayment of debt" Overdraft → has available US $3.5 billion overdraft that it is not using = provide a quick source of short-term finance if needed. Commercial Bills / Unsecured Notes → issues "commercial paper" to raise funds through its global-medium terms notes facility and debentures. Long Term Debt Mortgage → equipment or machinery Leasing → In 2018 McDonald's leased 12,334 stores.This reduces the initial capital outlay required for new stores = more stores to be opened in a shorter time frame. It also retains cash in the business that can be used for other purposes. This strategy is used to match cash outflow with cash inflow. Unsecured Notes / Debentures → borrowed cash at fixed interest rates using unsecured notes and debentures.

Social

Foxconn statistics show that male employees increase from 59 to 64% between 2009 and 2011." Having the world's largest population also makes China a highly flexible location for operations due to the abundant supply of human resources. And it's employees can be recruited without delay in response to changes in demand, such as prior to the launch of a new model of iPhone. CWP: 62% of Aus M open 24/7 = employees working varied shifts , change in traditional working patterns of 9-5 mon-fri. A work at home policy = greater flexibility, allows employees to start work earlier or finish later from Mon to Thurs, to allow a 1 pm finish on Fridays. 18 weeks paid parental leave for company employees, also discounted childcare and breastfeeding rooms for parents returning to work. Employees also have option of gaining additional 4 weeks leave per year by reducing their pay = greater choice and flexibility LS: In US, large campaign called "Fight for 15" has been arguing for the minimum wage for low paid employees, including those at M, in the US to be set at US $15/hour, claims that current wage levels are too low to live on. M responded by increasing wages at the rate of US $1 above the local minimum wage at company owned stores

Global financial management

Hedging: "the company may enter into foreign currency forward and option contracts with financial institutions to protect against foreign exchange risks ...The company's practice is to hedge a portion of its material foreign exchange exposures, typically for up to 12 months." Exchange rate fluctuations → When the Russian ruble appreciated in 2014, Apple was able to increase the price of iPhone and this market by 25%. Exchange rates: At 31/12/2018, M held US 11.8 billion worth of debt in countries other than the US = this represents 38% of total long term debt. It has a policy of financing local asset purchass with debt in local currency, as well as purchasing G + S in local currency where possible, acting as a natural hedge Interest rates: Varies between 0.3% pa and 5.3% pa. Makes use of interest rate swaps, currently has 91% of its debt fixed. Enters into fair value hedges to reduce the impact of interest rate changs in either direction. Stated in 2018 AR that its modelling suggests a 1 % pa rise in interest rates would not have a material impact on the company's results or cash flow

Performance objectives

Speed→ adjust to changes in demand with new product launches. In 2007 Steve Jobs wanted a glass screen for iPhone a few weeks before launch = Chinese factory with dormitory so employees work 12 hour shifts, 10,000 screens/day Flexibility → in product design, iPhone 5 embrace colour, rearrange production lines, flexible in retraining e.g iPhone 5c change in design to embrace colour + achieve lower produc. costs Customisation → Apps, music, cases Cost → outsourcing, switching to cheaper suppliers, designing 5c with cheaper components, targeting developing countries with older models Dependability → critised for lack of D, e.g maps function, functionality flaws with touch ID and technical glitches, respond to maintain customer confidence. No. of days takes to shift replacement part to manage customer expectations Quality → CEO Tim Cook "We have never been about selling the most. We're about selling the best experience and the happiest customers", must successfully repair products 1st time Quality → source quality raw materials, inputs regularly checked for freshness and levels of bacteria, HAACP, 10 min holding time for sandwiches = max freshness + quality Speed → process layout, alterations to drive through footprint shaved av of 6 s off each transaction. Kitchen crew 11s to toast a bun, 20 s to assemble the burger, 14 s wrap the burger. Flexibility / Customisation → McAus launched CYT menu : "means you can build your burger as unique as you are.'' - influenced by Subway model. impacted speed and cost = end of CYT. Cost → combat increasing food prices = 2019, slimmed down late night menu to cut costs through simplification, reducing food wastage and speeding up service. CL = increased automation, improved employee production and having reliable suppliers.

Government/ethical

Subject to corporate tax in the U.S. which previously was charged at 35% of company profits → 2017 Tax Cut and Jobs Act reduced business tax to 21% and offered companies a one time reprieve on returning foreign holdings to the US = Apple pay 38 billion in taxes under this Act European Commission declared that Ireland has been providing Apple with tax aid (pay a corporate tax rate of less than 1%) , instructed company to pay back 13 billion pounds, continuing legal battle. If A is required to pay tax owing to Ireland from previous financial years their future operating results, cash flows could be adversely affected operating in 120 countries = influenced by laws, policies and regulations of countless governments and government institutions. Eg. most countries have different rates of pay for employees, as well as minimum age of employees. ASIC: McDonalds Australia Holding Limited must report information such as the names and personal details of directors, the company share structure and resolutions to ASIC. Due to size + foreignly owned - 2011 Corporations Act requires M to submit audited financial statements that can be accessed by Aus public Company tax: 2018 AR, rate of income tax on profit was 24.2% globally. Criticised for using inter-company transfer payments to shift profit from Aus to countries that have lower tax rates e.g a trade union report, M Aus reported paying over AU 1.9 billion to a related entity in Singapore (a country with lower tax rates), = tax deduction for M

Maintenance

Wall Street Journal 2012, "earlier this year, Apple told some employees about a new initiative called Blue Sky that allows a small group of staff to spend a few weeks on a pet engineering project...allows employees to spend up to a fifth of their time on projects outside their normal responsibilities.", Tim Cook has also signalled he is more open to let employees take sabbaticals. Apple is moving to address long term employee gripes, like flexibility on what they work on. CEO, Tim Cook has also signalled he is more open to let employees take sabbaticals. Runs a rewards program which follows a pay for performance philosophy. Includes cash and shar bonuses, recognition programs and company cars. Offers a sabbatical program = 8 week break after 10 yrs of service. Discounted childcare, food, gym memmebrship and other deals for US employees

Working capital management

(Accounts Receivables): Apple's Annual Report; "When possible, the Company attempts to limit credit risk on trade receivables with credit insurance for certain customers or by requiring third party financing, loans or leases to support credit exposure. The company's cellular network carriers account for 71% of trade receivables" (Cash): Apple's holding of cash and equivalents remained steady between 2016 and 2017, but increased by 28% between 2017 and 2018 due to a significant sale of marketable securities previously held by the company (Inventory): Apple's inventory increased by over 120% in 2017, possibly due to lower demands for products than anticipated. Main challenge is its reliance on a single or limited number of suppliers to source some of the iPhone components, the same suppliers are also sourced by some of A's competitors, potentially causing a shortage of available stock at times = Apple pre pays the suppliers of some components to ensure the stock will be available when required (Accounts payable): current liabilities increased between 2016 and 2018 including; lease commitments for Apple's expanding numbr of retail stores, purchase commitments with outsourcing partners and suppliers, R and D WCM Current Assets Cash → has contractual arrangements with franchises for regular payments of rents and royalties e.g F royalty fees must be paid in full by 10th day of the month Receivables → Late repayments of rent or royalties may attract high interest for franchises. Inventory → M relies on 100% external suppliers for inventory, assembled burgers only when ordered by customer = reduce wastage at POS. Uses Manugistics which predicts sales for the following week + place the necessary orders with suppliers WCM Current Liabilities Payables and other loans → the company takes on average, 32 days to pay its accounts. stores have little control over the monthly payable to Mcdonald's head office (10th day policy) Overdrafts → has a US$3.5 billion line of credit facility at its disposal should it be required. To keep this overdraft facility open, McDonald's pays a fee of 0.08% p.a. WCM Strategies Leasing → 2018 Annual report M was the lessee of 12, 334 locations, has built a further US $12.9 billion worth of buildings on land that it leases = rapid expansion without large initial capital outlay Harry Sonneborn (company executive in the 1960s) said "We are not basically in the food business. We are in the real estate business".

Solvency

1.8:1 → 2.4.1 Apple's total liabilities increased by 151% between the financial years of 2015 and 2018, largely due to increased long term debts (via bond sales) and the related interest payable. Apple's strategy to further increase its debt to equity is evident in a report by CNBC, 17th May 2017: "In an environment of low interest rates in Europe and elsewhere, corporates have been tapping the bond markets to raise money. Low yields are good for companies as they don't have to pay as high a rate to investors" McDonald's is considered very highly geared. As much of the business's debt is long-term, it appears as though it will easily be able to meet its obligations.

CSR

2009 - 12 Foxconn employees jumped from buildings over 6 monthsApple's response- "we launched an international search for the most knowledgeable suicide prevention specialists"Foxconn starting salary is $2; 60% of a worker's monthly income was from overtime - 136 hours overtime (100 hours more than legal amount). In recent years Apple has attempted to intensify its its rules regarding underage labour by scrutinising recruiting practises, employment records and worker ID's website notes that it is attempting to use its "scale for good" as a corporate citizen Menu choice: work with dieticians → reduce sodium in sig cheese by 20% SC: Ensures that products are sourced in an ethical manner that "contributes to the development of sustainable agriculture and food manufacturing processes". Animal welfare: McLibel trial "culpably responsible" for cruel treatment of animals → founding member of Roundtable for Sustainable Beef Australia Aus = works with stakeholders to create beef industry that promotes AW

Global

2012 supplier responsibility report revealed: employees regularly worked more than 60 hours a week children as young as 15 were being recruited many work more than 6 days a week over time payments often were not paid there were incidents of discrimination and improper safety precautions 4 employees were killed and 77 injured in workplace explosions The Macca's Prospectus for employment applicants states that employees could try "working internationally, participating in cross functional teams with colleagues in other countries and leading the organisation". Uniform nature = employee skills transferable between countries. A large disparity exists between wages. Lowest paid M workers in India earn around AU $1.20/hr while highest paid in denmark earn US $20/hr

Government (marketing)

2014, the launch of the iPhone 6 and 6 Plus was delayed for Chinese customers due to government concerns regarding Apple devices. The issues surrounding privacy and accessibility of third parties to iPhone customers accounts such as iCloud and location tracking features were the subject of the Chinese government inquiries. Pricing strategies e.g price discrimination: In 2017, Russia's antimonopoly agency found Apple guilty of forcing retailers to coordinate over prices of iPhones. Apple could face a fine of up to 15 % of its Russian sales, according to a report by the Financial Times Section 1.2.8-6 of ANZFSC states that nut info led to the publishing of calories on all food items served at McDonald's in Australia. The interactive menu = customers can add items to a nutritional calculator which totals key nutritional facts such as calories, sodium, fat and sugar.

Corporate culture

"Apple's culture has been shaped by a history of innovation; it's leaders (who forbid the use of that's not possible) and the peer pressure among employees to be among the contributors to the final product that the customer sees."

Liquidity

1.28:1 → 1.12:1 Both current assets and current liabilities increased, however due to a more significant increase in current liabilities, there is a steady decline in the company's liquidity 1.85:1 → 1.36:1

Selling approach

: introductory phase of the product life cycle because Apple was creating new products beyond consumer expectations. They focused on the design and development of new technologies so marketing strategies were aimed at educating customers on the features of earlier iPhones

Cost leadership

A reduces op costs by forming partnership with Foxconn in China, cost of production cheaper and EOS achieved, also redesign products to reduce av unit cost of production e.g cheaper models such as 5c and SE M sells more than 75 burger/sec + feeds 69 mil/day = EOS. Lean production techniques & minimise waste vs accurate stock management and correct demand forecasts

Recruitment

Apple also has a practice of presenting employee referral cards. Recruiters and senior employees who experience impressive customer service at other retail stores hand the individual a referral card stating "You're amazing. We should talk". "The culling begins before the seminar starts. They turn away people who are 3 minutes late," says Graham Marley, who attended his seminar in a hotel in Dedham in 2009. Foxconn recruiters have been distributing leaflets to woo migrant workers at railway terminals in labour-rich inland Chinese provinces. Recruited externally, central application process makes it efficient and streamlined for local managers. Most management positions both at the local store and at corporate headquarters are filled internally via the promotion of existing employees. 51% of restaurant managers in stores owned by the company started their careers as crew members = retains talent with commitment to the business and demonstrated knowledge of the business process

Legal HR

Apple attempts to negate it's responsibility for the working conditions in foxconn factories, claiming to be distanced from these practices. working more than maximum hours, workers have wages docked as punishment. According to Apple's annual Supplier Progress Support im 2012: "the company found 106 cases of children being employed at factories making its products. Chinese labour law stipulates that temporary workers "shall not exceed 10% of the total Workforce" and that "monthly overtime work hours shall not exceed 36 hours" A Report released by China Labour Watch detailed that temporary workers recruited through contracted agencies now make up half or more of the workforce at the Zhengzhou facility with workers putting in at least 100 overtime hours a month. Common law obligations: gives injured parties avenues to sue for neglience. In 2013, a M e was allegedly injured by a falling stack of boxes, court awarded damages of AU $327,000 which included a claim for the lost earnings the employee would suffer as a result of the accident EA: In 2018, M issued all employees with a notice that it was opening bargaining on a new agreement as they had come under pressure by media reports (claimed that M employees were worse off under the previous enterprise agreement than the applicable award). M proposed new agreement 59% yes, 41% no, FWC has to approve and say it passes BOOT With such a large workforce, the vast majority of whom perform very similar tasks, an EAcan be a quicker, easier + fairer method of industrial relations negotation that individual contracts WHS: Measure workplace injuries using the Lost Time Injury Frequency Rate which is calculated at the number of hours lost to injury per 1 million hours worked, goal is to have less than 8.5 hours/ mil hrs worked. It is a self insurer for worker's comp = it funds +processes all claims internally. Standards of Buisness Conduct- The Promise of the Golden Arches: "McDonald's provides equal treatment and equal employment opportunity without regard to race, colour, religion, sex, age..." → chief diversity officr who oversees worldwide efforts to mkae biz diverse + fair workplace, 70% of US es are either women or from an ethnic minority In Aus, M has partnership with JobCentre Aus which runs a program called Golden Opportunities = aims to place job seekers with a disability into employment with McDonalds. By early 2019, over 750 such jobs had been filled

Outsourcing (role HR)

Apple initially estimated that it would take up to 9 months in the US for the company to find 8700 industrial Engineers to supervise the more than 200000 assembly line workers involved in manufacturing iPhones. Factories in China generated this workforce in 15 days."Foxconn could hire 3000 people overnight", said Jennifer Rigoni, Apple's former worldwide supply-demand manager. What US plant can find 3000 people overnight and convince them to live in dorms?" M uses a company called SafeWork to help comply with WHS requirements → ensures stores are better equipped to meet legal mandates + safe work practices. A McDonald's manager said "SafetyWorks knows our business. They've worked across all our Departments over the past ten years- supporting me and previous safety managers" Although McDonalds is a Registered Training Organistion in its own right, it also regularly engages third parties to deliver training to staff

Quality management

Assurance: Ensure suppliers understand Apple's ethos and committed to delivering quality products Control: uses database called Supplier Information Database which provides info on potential suppliers including capabilities, supplier diversity certifications A report by China Business, 22nd April 2013 claimed: "Apple returned at least 5 million iPhones to Foxconn in 2013 due to some kind of unnamed defect." Quality Control → McDonald's checks the quality of raw material for freshness and bacteria, temp + time controls throughout process Quality Assurance → Telarc is a NZ based company that conducts food safety audits at mc restaurants against ISO 17020 requirements TQM → Every member of org must be involved from the highest executive to the crewmembers. 3 basic principles = putting customer 1st (MR, choice+ service, exceeding expec.), making contin, improvement by reducing costs, maintain. Good ordering systems & aim for zero defects (rigorous quality testing) A: All e's are respn for Q, Q becomes focus for all activities, everything M does is designed to sat their customers = greater MS + profit D: well trained, responsive staff $, e may be resistant to change

Environmental sustainability

Chinese suppliers causing pollution = plan to build 200 megawatts of solar projects which will help to offset the energy used in A's supply chain, Renew initiative (old iPhones can be returned sent to recycling plant, parts used for new phone). Concerned for future generations, products are designed "for better environmental performance to try and reduce our carbon footprint" A website. In 2011, Chinese environmental organisations published a report saying apple had taken advantage off "loopholes in environmental management" and used Chinese suppliers known to cause pollution and they were "Pumping large amounts of toxic heavy metals into nearby rivers" Wall Streat Journal : Reducing energy use, Reducing water use, Environmental responsibility and waste packaging, Waste minimisation, Transport and distribution Eg. 2010 McAus states : "McDonalds Australia signed up to the Sustainability Advantage program run by the NSW Department of Environment, Climate Change, and water to assist us in improving our sustainability initiatives" Installation of time-flow taps = saves approx 100-200 L of water/day 70% of M worldwide packaging comes from renewable, recycled or certified sources. The refitting of a four flap Mcflurry cap saved 47.82 tonnes of plastic p.a by eliminating the need for a lid M UK recycles 99% of their cooking oil and use it to make biodiesel which supplies 40% of fuel for the trucks

Profitability management

Cost controls: Apple's expenses increased by 15% between 2017- 2018 largely due to R + D → Strategies to reduce costs such as taxation, leading to international investigations e.g Ireland Reduce variable costs: designing low cost models with cheaper components such as the SE, Replacing supplies with in-house development of components, such as graphics and audio chips, reducing other input costs such as labour by changing outsourcing partner's to assemble products such as the iPhone. In 2017 Apple moved the production of the iPhone se from China to India. This also reduced the price of iPhone in India due to eliminating import taxes, vertical integration Revenue controls: Altering elements of marketing mix Price → The company has relied on increasing the average price of iPhones to increase sales revenue since 2018 Place → marketing older iPhone models, iPhone SE and iPhone 7, using competition-based pricing strategies 4 India, also began manufacturing some models of the iPhone in India which reduces import taxes and allows the company to open Apple retail stores in the country. Controlling variable and mixed expenses for M stores can be problematic. Royalty and rental percentages and written into contracts and cannot be changed. Fixed costs e.g council rates are difficult to change, may negotiate lower insurance premiums M adoption of a new inventory system that responds to customer orders lowering the wastage of food and other inputs, which will lower this variable cost.

peformance management

Developmental PM = skills and quality of employee performance E.G apple's Genius Bar employees are regularly retrained and retested on their knowledge. Administrative PM= focus on outcomes such as sales and profit, which may then be linked to employee pay, rewards or promotional opportunities. "Workers are judged on how many accessories they can add to the sale of a core product. They're also being told to Direct customers to buy accessories through the EasyPay system. But those sales are credited to the store and not the employee, which in turn affects the workers job rating" CNET 28 August 2012, Apples retail vice President John Browett highlights the flaws in performance management process In aus, corporate and restaurant manager employees undertake annual performance and salary reviews = regular, formal opportunity to ensure that company goals and individual staff goals are alignedAt the store level, crew members are encouraged with pins that they wear to signify achievement. Also rewards such are "crew member of the month".

Economic

During the GFC and economic recession, Apple experienced a negative growth in iPhone sales in some regions of Europe and the USA = developing the low cost iPhone SE in 2016, as well as continuing to sell older models that are more price competitive, such as the iPhone 7 that is available in selected markets such as India 2018 AR, results "are substantially affected by economic conditions, which can vary significantly by market and can impact consumer disposable income levels and spending habits".

Establish marketing objectives

E.g Increase market share in India by 2% in the next 12 months by securing agreements with the Indian government to reduce import costs. Increase global online sales by 5% in the next quarter by offering price discounts aims to consolidate and increase market share, and may also focus on modernising the menu. The new growth plan suggests a customer-centric strategy to accelerate growth that focuses on: Retaining existing customers Regaining lost customers Converting causal customers

Identifying target markets

Economic data will indicate opportunities for business based on the level of economic growth in given countries India and China continue to experience the highest rates of economic growth in the world and are important target markets for the iPhone M UK aims to appeal to a wide audience including families and busy workers e.g. Happy Meal and playground in most stores and campaigns such as 'A Little Bit Fancy' and the introduction of table service to appeal to older demographics In a world first, a NSW store in Warilla trailed the use of real crockery → 400 UK stores offering a more upmarket dining experience Aim to expand Asian market, add more than 1,500 new restaurants in China, Hong Kong and South Korea by 2021

Physical evidence

Encourage hands on approach, allowing customers to test drive Apple products. Elaborate building entrances, for most stores, positioned in prime city locations, A stores designed to reflect importance of innovation + quality

Stakeholders

Employers → legal requirements in conflict w key interests such as sales targets, cost minimisation + improving return on shareholder investments Employees → strive for high wages, improve working conditions, job security and opportunities for career advancement. Trade unions → Apple retail Workers Union (ARWU) was launched in 2011 to represent the interests of Apple retail employees as stated on the organisations FB profile, "ARWU was established as a movement to empower workers to discuss working conditions and demand improvements to compensation, training and promotional opportunities" = created ShiftBoard (makes it easy to find + post available shifts for trade), organised day in solidarity where A workers protested for Foxconn Government → He'nan government paid subsidies of 200 RMB to encourage new employees to work at foxconn → assist foxconn in maintenance production targets and continue to be a leading outsourcing partner for Apple Society → China's 1 child policy led to greater proportion of males employed at foxconn factories due to lower number of female births Employers → directly or indirectly employs staff at head office and company stores or locally through individual franchises. Significant employer in Aus accounting for 7% of all restaurant & cafe workers. Employees → 1.9 million employees worldwide. First job = developed a policy restricting the working hours for employees still at school, has clearly defined training pathways designed to encourage progression through the organisation "We believe that a team of well trained individuals with diverse backgrounds and experiences, working together in an environment that fosters respect" Their Standards of Business Conduct states. Employer associations → member of The Franchise Council of Australia (FCA) - represents franchisors, franchisees and suppliers. M is also a member of the Australian Industry Group which is an employer organisation promoting members views to "government, regulatory, agencies, tribunals, interest groups, the community and the media" → used its influence to try and prevent fast-food employers having to pay employees penalty rates on weekends Trade Unions → 8,000 M employees in AUS belong to the Shop, Distributive and Allied Employees' Association (SDA)/ 2nd union, the Retail and Fast Food Workers Union (RAFFWU) believes they will do more than SDA. Its website states "SDA and McDonald's have teamed up to make dodgy backroom deals which smash workers rights" Government org → FWC checks and approves the enterprise agreement between the company and its employees. FWO and M have a Proactive Compliance Deed where McDonald's "self audits" and reports on workplace relations. FWO states "A Compliance Partnership is a collaborative relationship between us and businesses that want to publicly demonstrate their commitment to creating compliant and productive workplaces" Society → Value high school education = McDonalds has a Responsible Student Employment Policy which restricts the hours school children can work, Came under pressue for a "learn and churn" policy → stores either train staff as managers or reduce their hours as they got older

External sources of finance

External equity (share repurchase plan): aimed to reduce common stock, In 2018, the value of Apples share increased by 40%, surging the company's stock market value to a record $US 1 trillion. Fewer shareholders means greater returns per share= happy shareholders Issued 1660 million shares but currently buying back shares The business consistently pays its shareholders a high dividend = greater commitment and interest in business. When a new franchisee wants to buy the rights to a store, M expects their company to have at least AU $1.2 million in owner's equity

Sociocultural

For example, the exploding popularity of social media, online gaming and video streaming in recent decades has led to a strong focus on design features that support these capabilities. Consequently, the marketing of iPhones tends to heavily promote the camera, screen and processing specifications of iPhones in attempt to differentiate the product from competitor smartphones M differentiates to deliver G and S that its customers will choose to buy → deliver customers value, quality and convenience. US focused on providing a "consistent national value offering" through the Extra Value Meals menu

New product design/development

For the Awatch: market research (based on customer feedback, wanting more convenience), product + quality design (A engineers spent months living out of hotel rooms to be close to manu.tweak process to translate proptypes into produced devices), testing + assessment (cust. Feedback, glitches in software), product refinement (testing = 2nd model w more features + larger storage capacity), product launch + distribution (2015 launch of AW delayed to allow launch of iPad Pro to stand alone) Takeaway coffee makes up 86% of M Aus total coffee sales → June 2014, announced that barista made coffee from cafe would be available to drive thru. 2008, McDonald removed 2nd slice of cheese from its budget double cheeseburger = saved the biz nearly us 279 million that year

Process

Free upgrades of iOS for existing customers. Pre-ordering available prior to new product, online ordering system

Profitability

G(38.5%), N (21%) , ROE (36%)→ G(38.3%), N (22.4%), ROE (55.6%) A significant increase in the average selling price of iPhones in 2018, allowed the Company to increase profitability. Increase in ROE resulted from an increased NP and decreased owners equity → achieved by decreasing retained earn. Profitability: G (68%), N (18%) → G (68%) , N (17%) Engaged in programs where shares have been purchased back by the company = negative ROE

Global marketing

Global branding → When companies such as Apple launch new products in the global market they have a competitive advantage due to global brand recognition. They are able to use the same strategies in the global market, reducing costs by creating marketing economies of scale. Standardisation → When companies such as Apple launch new products in the global market they have a competitive advantage due to global brand recognition. They are able to use the same strategies in the global market, reducing costs by creating marketing economies of scale. Customisation → The first customised ad for iPhones in India in 2015 was tailored for the market as explained in the news extract; "Apple is looking to capture the Indian market's attention with the release of its first India specific television commercial, based around the immediately identifiable ritual of the great Indian wedding" Global pricing → here are influences on pricing in different markets such as currency exchange rates, transportation costs and local taxes. The price of an Iphone 11 was considerably higher in India and Russia than the US in 2019. In 2016, the depreciation of the Euro compared to the US dollar led to a 30% increase in the price of iPhones in France. In the UK, VAT- government taxes made it the third most expensive country to purchase an iPhone in 2017 Competitive positioning → A competitive advantage can also be achieved by establishing distribution channels in new markets. In 2014 Apple secured a contract with China Mobile Inc, China's largest phone carrier. This resulted in a significant increase in iPhone sales in 2015 and an increase in Apple's market share for smartphones. One of the key challenges in the Indian market is the high price of iPhones compared to competitor products. In 2016 the average selling price of a smartphone in India was US $122. Apple initially attempted to sell pre owned and refurbished iPhones to Indian consumers at lower prices, but this practice was promptly banned by the Indian government → 5s and SE Global branding: 2019, Forbes recognised M as the world's 10th most valuable brand. 88% of people surveyed could identify the golden arches logo, compared with 54% of pople who were able to identify the Christian Cross. Since 1976, offical sponsor of the olympics, further advance unified worldwide image Standardisation: M sells 2.5 million big mac a day globally, largely standard products Customisation: local tastes to meet needs better

Seperation

In 2004, Apple's decision to outsource operations to partners in China led to the retrenchments of 348 employees in the US. This initial restructuring involves redundancy payments of 1.9 million USD. In 2014, Apple acquired Beat Electronics for USD 3 billion, making redundant 200 Beats employees inoverlapping positions. employs young people = significantly higher annual staff turnover. McAus annual turnover rate is 42% for crew and 20% for management. McAus also conducts anonymous exit surveys of employees.

Sequencing and Scheduling

In the assembly of an iPhone, certain components e.g circuitry will need to be assembled prior to others being installed in the phone. Apple have tracked an order-delivery sequence of delivering an iPad at 12 days, 18 hours and 8 minutes, this lead time is used as a scheduling and planning tool for management. Sequencing → sequences its processes at the store level so that the assembly of a burger can be managed in a way that promotes efficiency and consistency. developed strict routines that must be followed Scheduling → manage their time = ensure customers receive their order in a timely manner with the maximum freshness. uses computer systems to communicate orders directly to the kitchen where menu items are then assembled. CPA can be done in the new franchises which can include the number of employees that are functioning slowly and then the number of processes including the delivery of the raw material which can have an impact on the final delivery time.

Inventory management

JIT is employed as once products are ordered online, the product is shipped directly from China, reduces lead times,warehousing low to avoid goods becoming obsolete. Generally forecasts and purchases inventory to meet manufacturing requirements for periods up to 150 days 2012 ABC report Dr Karl - M throws out unsold chips after 7 minutes, burgers = 20 → now makes food to order JIT. Forecasting calculated using specific historic product mix data from the last 2 years & info from store managers about factors that might affect demand e.g road colsures, local events and promotions. They hold a small buffer stock which Is an extra quality of stock held to meet unexpected higher demand Raw materials = FIFO

People

Job titles such as "Genius" and "Specialists" to raise employee status, In store, online and phone support for after sales, repairs, complaints and warranties, strong focus on customer service

Leadership style

Jobs= autocratic, Cook= demoncratic "A visionary is how he is most often described in relation to Apple. Jobs exerted his control over every aspect of the business in his quest for perfection...Job's control even extended as far as a design of the company bus and the food served at the cafeteria." Sydney Morning Herald "[Cook] he decided to build consensus and foster cooperation among the considerable talent at his disposal" Wall Street Journal A successful franchise system relies on uniformity between outlets, M has nearly 38,000 stores worldwide and operates using strict business guidelines, it follows that the management of the corporation is somewhat autocratic. Complaints that corporate management decisions such as increasing store rent, running promotions and changing menu items sometimes occur without proper consultation with franchisees. M Aus Franchising Overview booklet states; " We're looking to find a certain type of business partner: one prepared to follow a proven system...If you're not good at taking advice then don't become a McDonalds Franchisee" = Implies that all staff must precisely follow the detailed operational instructions that limit the scope for participative, democratic decision making. Has a structured hierarchy → starting with crew member all the way to store manager and consultant. Establishes a chain of common througthe local store. Allows for consistency and uniformity.

Market research

MR such as sales data and market share updates provides valuable insights to marketers of the iPhone.According to Network World 2012," Every month, Apple suryes iPhone buyers. The surveys reveal, country by country, what is driving customers to buy Apple's iPhone products versus other products such as the Android products that Samsung sell, what features they most use, customers' demographics and their level of satisfaction with different aspects of iPhone. In 2018, Chinese smartphone maker Xiaomi overtook Samsung as India's top smartphone brand, with more than 30% market share. iPhone are considered a premium brand in India, with less than 3% market share by volume and 11% share by value in the country The company uses a range of techniques including interviews, focus groups, questionnaires and polls. November 2005, M Aus launched "Project Discovery" → qualitative (2, one on one interviews with 35 people) and quantitive (phone interviews with 2,602 people in Aus) A key theme was health = inclusion of RDI figures, use of improved vege oil blends that r virtually free of trnasfatty acids, salt reduction in sauces, launch of seared chicken in salads + burgers US = online satisfaction survey on McDVoice.com, customers enter specific data found on their receipt that will identify info such as the store number, serving crew member, ask questions using a five point scale to indicate their level of satisfaction Steve Easterbrook stated that listening to customer feedback is what prompted moves to introduce an all-day breakfast menu as well as McPicks

Government

March 2013 Apple were summoned to appear before a federal parliamentary committee to explain their pricing policies and why Australians were forced to pay more for some of their products compared with other countries Legal: A must continually patent/trademark their innovations to compete with Samsung + Microsoft. A + S have ongoing legal battle as they each claim infringement on their intellectual property → affects ability to produce certain P's + design of models may be limited by legal decisions. 2015 US Court of Appeals reaffirmed that Samsung had copied specific design patents in A phone but court decided that S wasn't infringing on A's overall trade look, A's overall 390 mil award was downsized. 2013, ACCC concerned that A had made misleading representations to consumers- including that A was not required to provide a refund, replacement or repair to consumers in circumstances where thes remedies where required by the consumer guaranties in the ACL → A had to change warranty regulations Meat patty goes thru 52 checks before it actually arrives in M restaurant. July 2018, M Illinois removed salads from rest & supply centres for being linked to food poisoning, enforcement of GP = public safety

Cash flow management

Overall, a negative net cash flow in 2017 was offset by a positive net cash flow in 2018, leading to an overall 23% increase in Apple's holding of cash over the given period dividends (decreasing company cash). Increasing spending on capital infrastructure (decreasing company cash). Decreasing the number of company stores, and increasing the number of franchised stores = generating cash from initial sale and more stable income streams from rent and royalties.

Monitoring, control (Marketing)

Monitoring- Monitor sales data for the iPhone to identify market saturation- when sales are no longer increasing Control- Apple may require a new model of iPhone to be launched or identify new distribution channels to increase sales and market share Create Your Taste - total system wide sales declined in 2015 to US 82.7 bil from US 87.7 bil the previous year. As a result of monitoring the high operational costs and poor sales revenue, removed CYT

Accidents

NYT 2012: "137 workers at an apple supplier in Eastern China were injured after they were ordered to use a poisonous chemical to clean iPhone screens. Within 7 months last year, two explosions at iPad factories including in Chengdu, killed 4 people and injured 77 ". Measure workplace injuries using the Lost Time Injury Frequency Rate which is calculated at the number of hours lost to injury per 1 million hours worked. Its goal is to have less than 8.5 hours lost per million hours worked

Staff turnover

NYT 2013; "The average tenure is two-and-a-half years, as Apple retail stores have become increasingly busy, turnover rates have increased too. Internal surveys at stores have also found surprising this satisfaction levels, particularly among technicians, or Geniuses who work out what is called The Genius Bar" McAus annual turnover rate is 42% for crew and 20% for management. UK indicated that "the average length of time a crew member stays with us has increased from 18 months to 2.5 years"

Product life cycle

New models are released in Q1, in preparation for peak sales in Q2- the christmas period. According to one analyst interviewed by Syd Morning Herald. in 2016, "Apple has been able to juice up sales by introducing larger screen versions of the iPhone and by expanding into new markets like China" "The smartphone market at the high end is looking totally penetrated. The upgrade cycle is every two and a bit years and it's getting longer and longer. Now they've already got the bigger screen, what's going to convince you to get a new one?" Global sales plunging 7% and profit falling by 15% = 2015 The Guardian reported that burger lovers are falling "out of love with the world's largest restaurant chain" differentiating M to reverse trend, extended the availability of its popular breakfast menu with an all-day breakfast menu. Gave the company an"earnings boost" in early 2016 resulting in an increase in same-store sales of 5%. In 2018, the trend continued with the company reporting a 4.5% growth in sales.

Ethics and CSR

On the string of suicides at Foxconn: " Recognising that we would need additional expertise to help prevent further tragedies, we launched an international search for the most knowledgeable suicide prevention specialists - particularly those with experience in China " t employment laws continue to be breached by Apple's outsourcing partner's. An undercover reporter showed how forced overtime, unpaid meetings, and cramped dormitory conditions were still major issues for Foxconn employees.. On Underage labour: "To address this difficult scenario, we intensified our search for underage labour in 2010 commer interviewing more workers and further scrutinizing recruitment practices, employment records and work IDS, especially where third-party labour agencies and schools were involved. Our audits of 127 facilities revealed ten Chinese factories that had hired workers under the age of 16 years, the minimum age for employment and China." Leader in employing a diverse workforce = good reputation. Employees 71% of staff on casual basis. (65% are aged 14-18) → first job and not part of trade union = potential power imbalance. To combat this, the business provides confidential commun. channels to resolve issues. Responsible Student Employment Policy: This "ensures that young full time students will usually work no more than two shifts per week during term time... students 17 years of age or younger... will not work beyond 11pm or before 5am on school days". Has a supplier Code of Conduct that states that all suppliers worldwide, irrespective of the local law- must not employ anyone below 14 years of age

Quality expectations

Premium pricing encourages perception of quality, high quality due to durable, functionally simple and clean designs. 5c received low sales = did not meet QE 3 quality centres (NA, E, A) provide supplier training and assesses product quality for consistency and taste. M operations based on HACCP. Move to fresh patties was met with 90% CS rate and 90% repurchase intent as fresher, juicier and more flavoursome patties meet QE Quality of inputs used e.g cage free eggs + by 2025 antibiotic free chicken + eliminated artificial preservatives in nuggets & replaced high fructose corn syrup with butter Durability and reliability of the good or service The good is fit for purpose Eg. 2011 McAus coffee did not meet customers' "sophisticated coffee palate" (feedback showed dissatisfaction with consistency and strength of the blend). Responded by barista made coffee.

Price

Price skimming is used when a new product is released, positioning it as a leading edge, quality product. When a model is upgraded, the older model price is reduced to be more competitive (competition based pricing) usually aligned with the latest Samsung model Loss leaders: positions a range of items in terms of price + quality to appeal to the value conscious consumer e.g. dollar menu range undercuts competitors & attracts customers who may purchase a cheaper item (50 cent ice cream cone) and a more expensive item (coffee) Price Points: Offer pricing flexibility whereby customers can select and modify menu items to accommodate varying levels of affordability. Loose Change Menu which offers several products from several products from AU $1.00 → gourmet burgers such as th Angus and Chicken Deluxe Price bundle: McValue meals and Family boxes → 16% saving with McValue meal over purchasing each of the component items individually

Differentiation

Product features (Health, iTunes), product quality (compared to Dell), Add-ons (accessories w airpods, watch), lead time with service delivery (Genius bar). iPhone 5 fell from top position as highest selling smartphone, superseded by Samsung for lack of innovation Services that enhance experience of M e.g. play areas, kids bday packages with M invitations, party favours + decorations, meeting rooms with wifi and power points → community, mothers, local sporting groups

Ethical concerns

Product placement → Critics raise ethical concerns with the subtle (and potentially deceptive) nature of product placement, particularly when aimed at children. E.g Transformers 4, Birdman and The Verge Encouragement of materialism → Apple aggressively markets each new model of iPhone = questionable given the high levels of consumerism and environmental issues surrounding e-waste Health concerns → In 2011, the WHO ranked mobile phone radiation alongside lead and DDT as potentially "carcinogenic to humans" as there are potential implications for reproductive health, hearing, memory sleep and neurological disturbances. Since 2016, it is against the law to give a mobile phone to a child aged 7 years of younger in Belgium and in France, Wi-Fi has been banned in nursery schools and must be turned off in elementary schools when not in use. Advertising to children → in 2015, the company was accused of producing a television advertisement that focused on the "premium" (the toy) rather than the product (the food). Children's advertising review unit told McDonalds to "take care to assure future advertising directed to children...focus on the advertised food product and not on the premium" 2009, McDonald's Australia launched a self-regulatory body - The Quick Service Restaurant Initiative for Responsible Advertising and Marketing Communication to Children = healthy food and beverages are promoted to children under fourteen years of age Fast-Food Contributing To Obesity → McDonald's Australia voluntarily works with accredited dieticians to improve the quality of its food. Eg. has reduced the sugar content in burger buns to 5%, The traditional happy meal now includes options such as seared chicken wraps, sliced apples, flavored milk and water, fries can be replaced w garden salad

E-marketing

Product: A well designed website allows the iPhone to be displayed as still image or video, increasing customer awareness of the company's products. FAQs and technical specifications can be provided online, reducing the expense of providing customer service in stores or by phone Price: Price comparison websites allow shoppers to identify the lowest price offered for a given product. increase their profit margins by selling online, reducing the costs associated with operating retail stores Place: The cost of using intermediaries can also be reduced by selling directly to customers online limitations as customers want to view product or distrust security of online shopping Promotion: New product launches and related activities are published on their website and digitally issued to media organisations (publicity). Online advertisements are used extensively on social media sites, online business journals and newspapers, search engines and leading retail websites

Global factors

S+L: protection of intellectual prop R+D: 2013 4.5 Bil on R/d comp advantage GS: Over 300 suppliers in China, cost savings by outsourcing, proximity to suppliers and overseas markets, and access to leading technologies. The majority of components come from China and Mongolia (reduces transportation costs). EOS: efficiency in production by using skilled labour of mega factories, technical expertise Fox R+D: 2018, A new 250 mil headquarters was opened, test kitchens allow M to replicate any of its restaurants and ensure new processes can be smoothly executed. Employ executive chef and vice president of culinary innovation, develop new menus, simulate processes in test kitchen S+L: CYT influenced by subway

Globalisation

Samsung= flash memory, mobile DRAM, Jabil Circuit= phone casings, Foxconn produces 40% of world's electronics =EOS Threat to Apple's reputation as reliable supplier of quality smartphones, security of information Competitive advantage = adapting to global conditions. 38 000 restaurants in 120 countries.

Product

Strong brand image and highly visible logos on Apple products, packaging suggestive of quality Branding: According to book Fast-Food Nation more people are able to recognise the "golden arches" than the Christian cross Packaging: does more than protect burgers, reinforcing info that M wants con. to know e.g golden arches are made visible at the bottom right hand side of each container = consistent brand design. Used to differentiate by highlighting attributes such as "Beef: Great Taste, 100% beef" or by including images of ingredients to make the burger appear fresh and unique.

Quality improvement operations

The iPhone 6 has a precision metal band, which is prone to scratching, customer feedback products with scratches = tightener production standards and tougher quality controls

Psychological

The more expensive model, the iPhone 5s was released in 3 metallic colours- especially gold = quality and refinement. The promotional information for the 5s was targeted at consumers with psychological preferences of quality, leading technology and innovation. promotion for the 5s; "The iPhone 5s is purposefully imagined. Meticulously considered. Precision crafted. It's not just a product of what's technologically possible" a growing "foodie" culture and a move towards healthier eating and diets = increased pressure on McDonald's to use fresh ingredients + products that are generally more gourmet. Eg. 2009 the McDonald's Corporation introduced an Angus Beef range that was marketed as "It's a little bit fancy". More recently = emphasis on value → 2019 promotions such as $5.95 Big Mac Meal and Cheeseburger Meal, $1 hamburger and $5 McFeast Lunch Deal

Promotion

The use of media to create highly publicised event of new product launches. TV and mass media advertising has traditionally focused on the innovation, quality and design features of the iPhone, as well as being connected with others (social media, Facetime), Celebrity endorsement in advertisements and product launches e.g rock band U2 and actor Samuel L Jackson Advertising: M has resources to fund 'above the line' ads which engage mass media to promote brand. Uses tv, shifting tack to promote luxury- masstige. E.g 2009 Mighty Angus and the Grand Angus range in TV voiced by Australian Actor, Michael Caton (opinion leader) describes the new burgers as "a big juicy slab of genuine Aussie Angus...loads of that fancy salad, the onions, the purple ones... its Spanish". 2017 US unbranded ad which featured actress Mindy Kaling who asked viewers to Google "that place where Coke tastes so good" 4 million views in 1st week, using celebrity endorsement and a partnership with other brands that appealed to modern consumers. Sponsor major world events. As official sponsor of the Olympics, Formula One and FIFA World cup, M logo appears on official merchandise and promotional materials, this enables M to achieve prime slots in televsion advertising during the events, reaching a global audience of up to 4 billion Relationship marketing: loyalty cards that reward repeat customers w free hot beverage after a certain number of purchases → incentivise customers to visit McCafe more often. Mymaccas site which gives customers access to: exclusive offers, a newsletter announcing great offers and deals, free unlimited wifi & an online offer wallet. Loyalty program encourages customers to give their feedback and in return they are rewarded with M offers and products Publicity: Good news articles abt biz include M all day breakfast a hit- shares hit record high New look M concept store opens in Hong Kong featuring a huge salad and dessert bar M wants parents to feel good about its new McNugget recipe Well known LA chef, Neal Fraser collaborated with M to provide an "elegant meal" that was entirely created out of M food he said that ingredients were not dissimilar to those he uses at his restaurant, Redbirf → lifestyle blog 'savvy sistah' by Roshona Payne said "It goes to show you that McDonalds is [real] food" Sales promotion: Monopoly promotion rewards customers when they buy promotional items with two game stamps. Major prizes can b won such as cash, cars, holidays, TVS, llimited time creates hype. 2018 Aus around 141,500 worth of Collect to win prizes, enough to perpetuate the feeling that the customer is winning so that they come back for more in attempt to win a major prize. M US introduced a McPick 2 promotion in 2016, customers select 2 out of 4 menu items for an introductory price of 2$, rotating menu to retain interest. Special deals such as $4 Hamburger meal with a raspberry and custard pie, the family favourites family box, a $1 Hamburger

4 vs

Volume → suppliers like Hanson Metal Factory have ability to adjust for changes in volume by adjusting staff numbers and reconfigutring tasks Variety → different colours and sizes e.g 5c Variation in demand → 2016, the demand for the iPad Pro exceeded the initial supply during the launch, iPhones receive the most amount of demand around the September period each year when a new model is announced Visibility → Customer feedback has helped Apple develop larger phones, thinner phones and longer battery life for their devices Volume → accurate inventory management = transformation processes to respond to changes in consumer demand, satisfy customer demand by developing systems that track volume of items sold in each store. Variety → McDonald's responded to changing consumer tastes and demands = altering the variety of menu items it provides. Create Your Taste and Gourmet Creations range offers customisation. Variation → prepared for expected shifts in demand e.g. 2011 Bangkok floods, substitute ingredients Visibility → values direct contact. Customers can give feedback using an online form or calling the customer service line - sometimes receive an incentive.

Rewards

Wall Street Journal 2012, "earlier this year, Apple told some employees about a new initiative called Blue Sky that allows a small group of staff to spend a few weeks on a pet engineering project...allows employees to spend up to a fifth of their time on projects outside their normal responsibilities.", Tim Cook has also signalled he is more open to let employees take sabbaticals. Individual rewards are provided based on performance and consist of stock grants and cash bonuses up to 30% of Base salary Group: Most employees at Apple get periodic stock grants to reward their contribution. By putting the focus on the stock, they send every employee a clear message that individual accomplishments are important only if they directly contribute to the overall success of the company. Offer discounted food and beverage prices (up to 50%). Aus ran a program rewarding top performing employees with what was known as the Maccas Enjoyment Bonus- where they were surprised by the granting of a wish.

Resistance to change

When Steve Jobs returned to Apple in the 1980s the ethos has always been to invest in innovations and change —> staff are continually retrained in technology, signs of inertia aren't tolerated, supply chains reorganised

Monitoring operations

With apple suppliers, there is a high level of supervision as many workers are unskilled and line configurations of tasks need continual monitoring and control checks to improve time management, minimise poor process flows, meet KPIS, and improve efficiency consistently measuring and reviewing aspects of the operational processes such as lead times, Drive - Thru wait times, inventory turnover, wastage and cost analysis. If data suggests that an element of the operational process has fallen short of its target, M takes remedial action.

Task design

a skills audit helps to complete the production in the most efficient and effective time frame. Recruitment of staff is based on specific duties selected for employees e.g. unskilled = repetitive. They are highly supervised and the speed of work is quick all employees understand what their role involves, clearly stating the steps required to fulfil a task (eg drive thru or food making) = smooth transformation process.

Process layout

assembly lines, machinery and equipment is arranged according to the sequence in which the iPhone is assembled. Mass production, form long assembly lines invests time and money in ensuring the kitchen and restaurant layout is organised in a manner that promotes work flow and ease of access to required equipment and machinery. Have a test kitchen facility that can replicate any McDonald's restaurant

Economic

bad economy = dissatisfaction due to less job opportunities, New York Times based on interviews with former Apple retail employees: "internal surveys at stores have found surprising dissatisfaction levels, particularly among technicians or geniuses". Fast rising wages, work activism, and intermittent labour shortages suggest that China, whose economic crisis has dependent on a vast supply of low-cost labour, is about to enter a period of widespread labour shortages... Foreign manufacturers may find it increasingly less profitable to produce in China Seen as recession proof as it is not impacted by general economic conditions. In China, (boasts a fast growing consumer class), the level of economic growth has driven McDonalds to open more stores rapidly than in its traditional markets

Technological

companies such as Foxconn are seeking to replace human labour with robots. In an interview with IT Times, a spokesperson for foxconn stated, "automation will be key to keeping labour costs under control in the long-term, as a company pushes to have robotic arms complete mundane tasks currently done by workers", 8K sensors to spot defects that cannot be seen with the human eye. According to Nikkei Asian Review, 24 Feb 2018: "The delicate work and stringent quality control requirements involved in iPhone assembly had previously made the process labor-intensive and difficult to automate. Foxconn plans a large-scale rollout of cutting-edge robots and also envisions using high-resolution 8K sensors to spot defects that cannot be seen with the human eye." All es use the app Metime -- used for rostering, pay and training. E's have personal log in = maintain effective communication. Self serve kiosks and mobile ordering apps = remove the need for the customer to interact directly with employee, automated drink dispensers allow staff to be free to perform other duties, or reduce staff numbers overall. Steve Easterbrook stated that technology at M is not about "job elimination"

Differentiation marketing

iPhone X in 2017, some analysts claim that most of the 'new features; of the latest iPhone have been available in competitor phones for years, such as OLED display, waterproofing and facial recognition. Apple's supporters tend to claim that whilst differentiation of features is not significant, as the quality of features particularly the iPhone camera give apple a leading edge adding greater value through innovation and enhancing in house experience e.g. play areas, kids bday packages with M invitations, party favours + decorations, meeting rooms with wifi and power points → community, mothers, local sporting groups. Bad publicity following doco Super Size Me = accused of selling food that was high in calories, sodium, fat and sugar. Attempt to change: A little bit fancy, Un-McDonalds, Vegan nuggets

Technology operations strategy

leading edge (touch + face ID), established (iOS operating system) Kiosks - Steve Easterbrook: adopting this tech has the potential to increase sales by 5-6% as people have more time to think about their order and select more items. 2019, spent over 420 mil AUD in acquisition of decision logic tech → better personalise menu logs e.g weather

Technology

used leading edge, eventually become established = criticism for lack of innovation and inability to differentiate iPhone McAus partnered with MenuLog and Ubereats = accessibility, online ordering app, automated drink dispensers, LED signage for reduced energy consumption, digital displays notify customers when food is ready.