Be green, be environmentally friendly, improve efficiency…this list can go on and on, addressing the same concern. Due to consumer’s concern, substantial pressure is imposed upon business entities, to seek a more Eco-friendly approach in the production process of a product; as environment and profit seem to positively correlated to each other,
The quote that is visited and revisited in COMM101 is “The Social Responsibility of Business is to Increase its Profits“, by Milton Friedman. and it is also mentioned in the class preparation article Green to gold: how smart companies use environmental strategy to innovate, create value, and build competitive advantage. Like many of the other consumers, some of my friends believe that the corporate social responsibility (CSR) of the companies should go beyond the idea of making profits. Nevertheless, I agree with Friedman in the sense that profit is always number one for profit-seeking businesses. Indeed, there are some businesses and claims that they are “going green” by implementing certain changes, but this change simply serves as a point of difference that will increase their competitive advantage. Starbucks, for example, advocates about its “bring your own cup” approach by offering a 10 cent discount to customers. It is clear that Starbucks is demonstrating a desire to reduce the consumption of trees and to protect he environment. However, 10 cent is simply too little to be attractive for consumers to take this suggestion seriously, and there is high chance for customers to just purchase the coffee at normal price. Also, it is legitimate to assume that the price of coffee charged by Starbucks probably covers the average total costs and includes a satisfactory profit margin; a 10 cent deduction will be very insignificant, as the price of coffee is often around 2 to 3 dollars with tax. Does Starbucks have the intention to reduce the consumptions of trees? Yes, however, only to the extent that they will still gain substantial, satisfactory profit. The CRS to be eco-friendly is therefore, simply a by product of the company’s desire to be successful and to attract customers (as they care about the environment).
(Starbucks coffee menu)
Are there businesses that build their entire value proposition about being eco-friendly? There maybe. However, we should keep in mind that profit is the actual base of most businesses, regardless of what they claim to be. Eco-friendly approaches are used to disguise the company’s desire to differentiate themselves from competitors, and to generate higher revenue, which leads to higher profit.
URL Pictures:
http://blogs.swa-jkt.com/swa/11156/2012/01/24/money-or-environment-which-is-more-important/
http://www.wegotcoffee.com/news/starbucks-trenta-prices.php
URL Articles:
http://site.ebrary.com/lib/ubc/docDetail.action?docID=10210221
http://www.businesspundit.com/25-big-companies-that-are-going-green/
http://news.starbucks.com/article_display.cfm?article_id=694