Case 2: Method Flashcards
Method’s mission?
- In short: Dedication to environmental and social values and health; clean production, use and disposal of all its stylish products
- They want to provide beautifully designed, stylish cleaning products that are not needed to be stored beneath the sink with sustainable ingredients and without harming the earth.
- They “believe in using business to solve social and environmental problems”, their purpose drives their business and not profits and shareholders
- When making business decisions, they keep society (employees, community) in mind
- They meet highest quality standards that are good for the planet
- Animal friendly: they don’t perform animal testing on their products and don’t use animal by-products
- Climate conscious: Method takes steps to reduce carbon emission from the products and production; Method uses alternative energy in their offices and manufacturing sites
- Method “green-sourcing” program: working together with suppliers and manufacturers towards the ultimate goal of zero-waste manufacturing
- Renewable + recyclable: plastic bottles are (at least 50%, many 100%) recyclable, formulations are with renewably sourced ingredients
- Method wants to reduce the amount of water and energy needed for their production
Method’s products + product’s characteristics?
- Method offers stylish and eco-friendly home cleaning products (e.g. for hand, body, laundry, dishes) without toxic ingredients and with renewable formulations as well as recyclable packaging materials that are nonetheless high performing
- Product as a statement => strong customer base
- Appearance: stylish, nice design => different to competitors who focused only on price
- Sustainability: healthy, eco-friendly, biodegradable, recyclable => different to big players
- “packaging design and materials are evaluated for safety, sustainability and recyclability”, packaging of the cleaning products as well as the cleaning products themselves are not harming the earth
- Offered at little premium (price)
Method’s problem ?
- Lowry must decide: produce biodegradable cleaning cloth out of PLA in China (only possible there) or not at all
- Uncertainty whether the raw materials for PLA in China are from genetically modified organisms (GMOs) or not => many large retailers in US might refuse to buy then
- Production in China depicts a departure from Method’s usual business where most products are sourced (90%) in the USA
- far transport distances would result in many carbon emissions => contradicts Method’s environmental mission
Pro’s of outsourcing to China
- differentiation from competition
- PLA cloth is environmentally friendly
- When considering the whole product life cycle, it might make sense to outsource the production to China since Lowry wants the PLA based product because it is environmentally friendly and biodegradable even though there are high transportation costs and emissions attached
Link to CSR theory: Caroll’s 4 part definition of CSR?
- Philanthropic Responsibilities: No, because they do not contribute resources to the community.
- Ethical Responsibilities: Yes, because Method tries to avoid harm for humans and the environment. In contrast to cleaners of the competition, Method offers clean and healthy household cleaners. They are animal-friendly, i.e. don’t perform animal testing. Method is climate conscious and tries to use renewable energy as much as possible. Also, they use renewable or recyclable packaging to avoid further harm.
- Legal Responsibilities: Yes, they obey the law as it is required.
- Economic Responsibility: Yes, they intend to be profitable as it is required and the basis for business.
=> Method might be placed in between the philanthropic and the ethical stage. They do more than just fulfill the ethical expectations, but don’t really contribute resources to society.
Link to CSR theory: Vision of CSR (Benabou + Tirole)? Arguments for Vision 1?
doing good:
o animal friendly => not harming animals
o human friendly => espacially children
o green products, green supply chain, renewable energy usage and recyclable packaging => environmentally friendly
o green-sourcing program to reach zero-waste manufacturing => good for environment
doing well:
o thus, differentiation from competition
o many consumers agree with mission and what Method stands for, they become customers, make a statement by buying at Method instead of competitors
o thus, fast growth
Link to CSR theory: Vision of CSR (Benabou + Tirole)? Arguments for Vision 2?
Vision 2: “Delegated Philanthropy”: “the firm as a channel for the expression of citizen values”
- Customers not only buy the product, but also buy the brand
- Customers thus agree with slogan “people against dirty” and the mission statement:
They are animal-friendly, i.e. don’t perform animal testing. Method is climate conscious and tries to use renewable energy as much as possible. Their products are friendly to humans, especially children. - customers make a statement and use Method’s brand as a channel for the expression of their own values by buying good, i.e. environmentally friendly, products instead of those of competitors. Furthermore, some customers proudly present it by buying merchandise of Method. Thus, they show how much they agree with what Method stands for.
- customers are willing to spend money (they pay a small premium) to make the statement by buying at Method and not harming the environment by buying at competitors
Link to CSR theory: Vision of CSR (Benabou + Tirole)? sample text for Vision 2
Methods customers are buying the brand and the mission statement of Method as an environmentally friendly company. Customer thereby agree with the slogan “people against dirty” and the corresponding mission of Method being against “toxic chemicals” in household products, against pollution with “nonrecyclable materials”, against “animal testing” (case, page 2). By buying these products, customer express that these values are important to them. The biodegradable products are free of toxic ingredients and manufactured with renewable formulations as well as recyclable packaging materials. As a result, they are environmentally and human friendly (especially for small children). By buying Method’s products for a small premium, customers make a statement and use Method’s brand as a channel for the expression of their own values by buying good, i.e. environmentally friendly, products. Customers proudly present it by buying merchandise of Method. Basically, some customers are buying a good conscience.
