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.