“If the UN was fully funded, would we still need social enterprise or Arc?”

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The issues present in society are so complex that traditional charitable giving will no longer effectively address them. As well, there also must be a collective, global effort to resolve the social and environmental problems that plague the global community, instead of one governing body alone.

What resonates with me the most about social enterprise is the idea of opportunity generation vs. problem mitigation; the former is more sustainable in the long run. Grameen bank and Arc initiative offer independence directly to their market, invaluable in the process of advancing society as a whole. Whereas if the UN simply took the initiative to establish programs, or provide food or clothing for example, they increase the people’s reliance and destroy local business and opportunities. I believe that if the principles for which businesses exist, to provide value for its customer segment by resolving an issue through innovation, were directed towards a greater cause, an ideal world is attainable.

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The values of global citizenship and responsibility to our neighbours must be engrained in our generation. The issue of “out of sight out of mind” in the west will prevent progress. Besides Arc’s positive impact, it makes the business leaders of tomorrow more aware, inspired and responsible to make change through the humbling experience.

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Shannon raises an interesting point about how companies gain a competitive edge by targeting new customer segments. This article discusses how the jewellery industry is adjusting and taking advantage of socio-cultural changes.

However, I believe that male customers will respond to the food more readily than jewellery because of the different needs that they satisfy. Food is a fundamental need whereas accessories fulfil the discretionary want of self-identity. Despite society’s tolerance, “jewellery still provokes ambivalent feelings among men.”

I would recommend that jewellery companies conduct market research to determine their value proposition to this customer segment. Direct questioning of both males and females is the most effective in this case. Personal interviews with male customers could reveal psychological conflicts, the source of reluctance, or negative attitudes towards jewellery. Questioning females on their reception of these males indirectly reflects male intentions and motives to adorning themselves. Determining the source of discouragement will allow companies to offer products that “limit pains.”

Both food companies and jewellery companies must recognize that the value and marketing targeted towards women is not necessarily received by men. By adjust their designs and marketing strategy from the results of this research, they will “gain momentum” over companies that aren’t as perceptive and flexible.

Image Source: The Economist

The tragedy of the Rana Plaza Garment Factory reflects the ignominious practices of the retail industry. This article condemned the disaster as “the worst [accident] in the garment industry,” for the killing of at least 400 workers.

I believe that these recurring disasters will act as the catalyst for change; economy and commerce must exist for a great purpose than to make profit. I recommend that the clothing companies establish supportive programs for the labourers to increase productivity therefore accomplishing financial goals. The Western companies could implement higher wages, workplace environment standards and providing healthy meals to help their workers meet their basic needs. The increased revenue generated as a result would allow the companies to invest in infrastructure or company growth.

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Ironically, these “cutting corner” scandals make companies pay the higher price of compromising brand reputation. Not only do I think this breach will affect Joe Fresh and Loblaw’s ability to market their products to the Western consumer, the company creates pains for the consumer through unethical practices in two key ways which is disadvantageous: guilt of condoning this activity by purchasing their products, and contradicting the global push for human rights that most consumers support instead of promoting. This would prevent the clothing companies from generating revenue to sustain the company in the long run.

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IKEA is admirable for its progressive, innovative, and strong business strategy and there are several key reasons for their success. The economist accredits their success to “thrift [being at] the core of IKEA’s corporate culture,” and I agree because operationally, they have refined their transformation process by reducing costs in areas such as distribution. As a result, the company reaches the efficiency stage on the road to sustainability by saving corporate dollars.

Image Source: Economist online

However, I believe that IKEA’s achievements result from the lack of discrepancy between internal company culture of “thriftiness” and their value proposition. The company epitomizes disruptive innovation by making a product accessible and affordable to the majority. Their point of difference of DIY and buy-take home convenience parallels the efficiency IKEA strives for in its production line.

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I believe that the company maximizes the amount of value generated for its target market because all strategic decisions either for long-term growth or operations that reflect their “thrifty” philosophy will benefit consumers. For instance, “designers found a way to pack [products]… that shaved $135 from the price tag.” This improves the financial gain to customers as well IKEA’s ability to maintain introducing new models and styles, two important factors that IKEA relies on for brand marketing and positioning.

Image Source: GreenBiz.com Blog

Nespresso has demonstrated its superior business acumen through its $536 million sustainability strategy “A Positive Cup.” I believe Nespresso recognizes how the economic, social and environmental challenges of their suppliers increase risk in the productivity chain. The farmer’s supplier power increases as the farming population ages without younger generations pursuing agricultural careers and the lack of infrastructure that does not yield enough to expand Nespresso’s business.

I respect Nespresso for their project because they developed a strategic plan that is both selfless and selfish; by combatting the threats faced by farmers and providing them with supportive programs, Nespresso reintroduces the value in coffee farming which will accelerates the industry. If Nespresso supplier efficiency increases through building these supportive industry clusters, Nespresso will be able to generate the revenue necessary to improve the overall infrastructure of farming. This in turn will allow Nespresso invest in sophisticated recycling programs or energy efficient processes that would reduce its net impact on the environment – the root of their business. By reducing waste, the company will be able to finance support programs and infrastructure improvements in the long run.

Shared Value Diagram

I think companies like Nespresso will redefine the power and purpose of capitalistic markets and the standards for viable business model.

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Although the federal government’s decision to reject Taseko’s $1.5 billion gold-copper mine project may appear as an appeasement of tensions with First Nations, I believe the decision resulted from the society’s change in attitude andt priorities. Taseko faces new social, political and environmental external pressures.

Largely due to the First Nations, British Columbia has embraced ecological values, becoming more conscious of the effects of industry on the environment. In order for Taseko to deliver on its value proposition, they will inevitablely disturb to the fragile ecosystem of Tsilhqot’in tribal park through its key activities. The court outcome is a result of the advent of a cultural limitation.

Image Source: Edmonton Journal

From an ethical standpoint, the government has a social responsibility to act in accordance with societies values but also to promote economic activity. I believe there is a chance that Taseko will receive the grant to proceed because of the potential economic benefit, but the company will face environmental regulations. This will increase costs as they must use ecofriendly practices and alter the way they channel and market their product.

Image Source: Globe and Mail

Lastly, in order for Taseko to be allowed to operate near protected land, they must cooperate with First Nations. This is an opportunity as First Nations could provide the resource of knowledge of the land, and also to gain society’s support.

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Shannon discusses an interesting topic in her blog about Apple’s success and loyal customer base as a result of maximizing its value proposition.  Not only does Apple stand out for its innovative, quality and aesthetically-pleasing technology, the company has associated an experience to its products which could be its point of difference.

The successful use of the Value Proposition Canvas has led to the creation of the “Apple Ecosystem” as this article describes.

ec·o·sys·tem: (n) a system formed with interconnecting & interactive parts

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For instance, the newly released Apple watch must be used in conjunction with an iPod or iPhone; It compliments existing products instead of of being a stand-alone product. Stephanie discusses how Lululemon has diversified from workout wear in order to dominate the woman’s closet. This is comparable to Apple, as they are branching out into all facets of life, from exercise, to entertainment, to potentially transactions.

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This is a smart business strategy because Apple makes it easy for customers to adopt their technology and ensures all customers’ needs and wants are satisfied. Most importantly, this increases consumer reliance: “the more they are locked in, “the more they must stick with Apple.” This is where it is crucial for Apple to consider ethics as many stakeholders would be jeopardized by a security breach.

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The catastrophic failure of Blackberry as a company should act as a warning to all companies that currently dominate the market of what happens when a company becomes complacent. Blackberry “only accounts for less than 1% of sales worldwide” and has lost customer favour to competitors like Apple, Samsung, and Android.

However, John Chen’s Focus differentiation strategy to revitalize Blackberry theoretically is promising. By marketing itself as “the one-stop shop for security-conscious businesses” it targets narrow segment of governments and big corporations. The company can direct innovation to satisfying this unmet need of security.

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It would be futile to compete head on against Apple (for instance). In order to move up “the ladder” Blackberry could instead try to reposition the consumer’s opinion on the safety of competitors’ products by capitalizing on the Jennifer Lawrence’s iCloud scandal and the danger of Chinese hackers. This is an example of a “Transient Advantage” as Blackberry becomes relevant by recognizing opportunities and exploiting them.

Another recommendation is co-creation with these large firms and governments or providing customization services to satisfy their exact needs. This would give Blackberry a point of difference.

Can Blackberry recover, or is the company permanently damaged from committing the first of the Seven Dangerous Misconceptions?

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I agree with Eric that the Tim Hortons – Burger King Merger is advantageous for both companies, but not on the premise of selling similar products in each chain. This article confirms that the top executives of each company do not plan to make changes to the brand – “no Tims’ coffee in Burger King and no Whoppers at Times.”

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In my opinion, the problem with serving similar products in Tim Hortons and Burger King restaurants is it weakens each companies value proposition. It would also reposition each company in the consumer’s mind. For instance, Tim Hortons’ food is perceived as being healthier than Burger King, which contradicts the need the company satisfies.  This could be considered a risk of merging.

However, both companies benefit by achieving economies of scope with more access to distribution channels. This is especially important since the main reasons for the partnership is “growth … and [bringing] beloved brand[s] internationally.” Knowledge is power, and each company has an understanding of the markets they have operated in. For instance, the merger allows Tims to share strategy, market experience, and consumer expertise so Burger King can emerge successfully into the Canadian market, and vice versa.

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Chiquita’s decision to be environmentally friendly and transparent backfired by creating detrimental loss to the company, and accumulating American and Colombian lawsuits. Chiquita’s unsuccessful attempt to fulfill its “social responsibility” further strengthens Milton Friedman’s position that the duty of the “executive agent” is to legally raise the greatest profit for shareholders instead of acting as an unqualified, socially-conscious, civil servant. By acting in accordance to environmental activists like ForestEthics and Rainforest Alliance, Chiquita “agreed… to avoid fuel from Canadian tar sands” enraging Canadian suppliers.  In an attempt to make Chiquita transparent, the entire company and its reputation are open to scrutiny.  However, Fernando Aguirre, the company’s chief executive, remains confident that “[Chiquita] can do good and do well at the same time.”

My opinion on Chiquita’s future is actually optimistic when considering the stakeholder theory discussed by R. Edward Freeman. In the long run, I believe consumers will appreciate how Chiquita strives to establish itself as an honest, respectable, and clean company making an effort to reform past wrongdoings. In order for business to be successful, it must consider the social- and eco-consciences of its consumers who will not support companies that harm the environment. Major companies are capable or raising awareness; the executive must find the balance between the needs of the firm, stakeholders, and society.

References:

The Economist – Business Ethics Going Bananas