Monthly Archives: October 2012

Wal-Mart has made a strong commitment to build a more sustainable global supply chain, starting with China. In 2008, Wal-Mart placed environmental requirements on its Chinese suppliers (source). Recently, Wal-Mart announced that it will fund research to develop sustainable businesses in China, and work with suppliers to “increase the standards of its sourcing and product design” (source).

Following a broad cost leadership strategy has already made Wal-Mart’s operations around the world largely successful. Why does having a sustainable supply chain matter?

Supply chain management is critical to a business’ success, especially for ones operating on a global scale like Wal-Mart. Common supply chain challenges are cost control, risk management and supplier relationships, which can really affect the bottom line (source). Now, supply chain sustainability has become a competitive advantage. China faces ever-mounting criticism for its harmful environmental and social practices so building a more sustainable chain first in China is a smart step. I can see many benefits from this strategy. Wal-Mart will be able to generate new sources of revenue from innovating to create “greener” products. Increasing energy efficiency, and working with suppliers to cut down wastes will reduce costs. Wal-Mart’s business model and operations will be improved, allowing for better risk management. Brand value and shareholder trust will increase. Ultimately, a sustainable supply chain will continue Wal-Mart’s success in the global market.

Offical Press Release and Video from Wal-Mart:

http://news.walmart.com/news-archive/2012/10/25/walmart-announces-new-commitments-to-drive-sustainability-deeper-into-the-companys-global-supply-chain

Frozen yogurt is once again experiencing growth and rise in popularity, but this time there’s a new twist. As explained in this article, brands such as Pinkberry, Menchie’s and Yogurty’s are opening up stores in urban centers across North America. Menchie’s and Yogurty’s allow customers to grab a cup, mix and match flavours to their heart’s delight, choose the quantity and variety of toppings, add different sauces, and pay by weight.  Pinkberry has its servers build the dessert at the customer’s request and charges per size of the yogurt cup. Also, they are catering to more health conscious consumers by offering low or non-fat and sugar free flavours as well as fruit and granola toppings.

Self-serve frozen yogurt capitalizes on the growing marketing trend of personalization. By letting their customers make personalized choices, these frozen yogurt brands are getting consumers to associate a unique, individual experience with the brands, building brand loyalty. Even Yogen Fruz is renovating to include new self-serve machines in order to compete in this market. Today’s young consumers are pushing this marketing change with their desire for services and products that they can customize to their tastes. We are increasingly unwilling to settle for what’s readily made for the masses.

In his blog post, Jeremy Liang states how some restaurants in China use cheap “recycled” cooking oil to maximize profits even though it poses health risks. The businesses in China which endeavor to make money fast by producing unsafe foods are harming the health of the world’s population and China’s image.  The world is already cautious of China’s food products because of scandals such as baby deaths caused by milk powder contaminated with melamine (source).

This is a situation where government needs to step in to enforce ethics. China must find a way to implement stricter food safety regulations faster and give incentives for people to follow them. If Chinese government succeeds in instilling the message that “ethical practice equals better business“, then individual businesses will gain more, China’s economy will grow more, and the rest of the world benefits. Jeremy mentions how his father’s restaurant in China earns less profit in order to be responsible for customer’s health by providing good quality food. The restaurant has built a reputable name and a large customer base. Over time, his restaurant actually earns more than those using low quality foods which turn customers away.

In business, operating ethically and making profits aren’t mutually exclusive, they should go together.