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

Image Source: Google Images

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.

Image Source: Google Images

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.

Image Source: Google Images

Image Source: New York Times

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.

Image Source: Google Images

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.

Image Source: Google Images

Image Source: Google Images

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.

Image Source: Google Images

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.