While some, like Rita McGrath, argue that competitive advantage no longer exists in a technologically advanced, fast moving business world of today (McGrath, 2013), I disagree. To stay competitive in today’s market, companies must be extremely efficient while continuously being innovative with strategies. It is more efficient for a company to outsource work than to try and be completely self-sustainable. A company very familiar with outsourcing is Apple. Part of Apple’s strategy is in fact to outsource all of their manufacturing of product parts, and assembly, so they can focus on their strength: design (P.K, 2013). Apple’s outsourcing strategy has been effective thus far, allowing them to create a strong brand name, creating innovative touch-screen phones for a reliable customer base. That is until recently.
Customer loyalty has recently started to be questioned as Apple’s innovation seems to be slowing down, and their models seem to be copying that of Samsung’s Galaxy phone (Samsung Mobile USA, 2014). Samsung,their biggest competitor, also happens to be their largest supplier of parts (P.K, 2013), which is seemingly counterintuitive. Why would Apple help their rival make profit? As part of their business model, Apple has many key partners. Without these relationships they would not prosper. The fact is, business is not a zero-sum-game. Even though Apple is helping their competitor create revenue, they are helping themselves the most.
McGrath, R. (2013). Transient advantage. Harvard Business Review, 91(6), 62–70.
P.K,. (2014). Slicing an Apple. The Economist. Retrieved 28 September 2014, from http://www.economist.com/blogs/dailychart/2011/08/apple-and-samsungs-symbiotic-relationship
Samsung Mobile USA,. (2014). Galaxy Note 4– Then and Now. Retrieved from https://www.youtube.com/watch?v=oxhSnNZH3Rk#t=25
The most important ingredient in Hershey’s chocolate, what makes it so delicious, is, of course, cocoa. The average consumer doesn’t pay mind to how Hershey acquires this coca. Each time you pay for a Hershey bar, you are supporting it’s production chain, which starts at the hands of children. Hershey has been behind its competitors for years in addressing issues of child labour, forced labour, and other abuses.
Recently, Hershey announced a new line of chocolate, named Bliss, that uses cocoa sourced from Rainforest Alliance Certified which ensures the farms meet certain ethical standards such as safe and healthy conditions for smallholder farmers. This seems to be a step of social responsibility for the company, showcasing the ethics of the company. Although Hershey seems to be acting in social interest, the movement was the result of a threat to publicize the company’s use of child labour with a Super Bowl add, which would have resulted in public revolt against the unethical practice, thus reducing the demand and profit for Hershey bars. The “Raise the Bar, Hershey Coalition” has been campaigning against Hershey for years without success because their actions did not significantly threaten Hershey’s profit. As soon as the business’ profit was threatened, they reacted. Though they seem to be showcasing corporate social responsibility, they are in fact only acting in self-interest, which Milton Freidman discusses in the chapter entitled “The Social Responsibility of Business is to Increase its Profits” where he unveils the “cloak of social responsibility”(Friedman).
Friedman, Milton. “The Social Responsibility of Business is to Increase Its Profits.” Corporate Ethics and Corporate Governance. By Walther Ch. Zimmerli, Klaus Richter, and Markus Holzinger. Berlin/Heidelberg: Springer, 2007. 177. Site.ebrary.com: The University of British Columbia Library. Web. 9 Sep. 2014.
International Labor Rights Forum. Laborrights.org,. ‘Hershey Will Offer Certified Chocolate Following Consumer-Driven Campaign’. N.p., 2014. Web. 9 Sep. 2014. from http://www.laborrights.org/releases/hershey-will-offer-certified-chocolate-following-consumer-driven-campaign