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Gill, Maddie, Nanfei, Rob & Tina
Introduction
Company Overview
Sustainability
Creating Sustainable Value
Natural-based view of the firm
Sustainable Value
Conclusion
Overview
Do Whole Foods Market Embed Sustainability?
Whole Foods Value Matters
Whole foods: An Organic HistoryThe early age:1978- twenty-five year old dropout John Mackey and twenty-one year old Rene Lawson Hardy, opened the small natural foods store.
1980- John and Rene partnered with Craig Weller and Mark Skiles to merge SaferWay with their Clarksville Natural Grocery.
Expansion:
1984- Whole Foods Market began its expansion.1989- We expanded to the West Coast.1990-1999- acquiring other natural foods chains throughout the 90's.1998- Development of "virtual" store began.2000- Additional acquisitions.2001- Whole Foods moved into Manhattan.2002- Saw an expansion into Canada2003-2004- Whole Foods Market entered the United Kingdom.2007- Merger with Whole Foods Market
(Whole foods Market,2007)
Conscious Capitalism
(Conscious Capitalism, 2015)
Whole Foods Core Values
Promoting the health of our stakeholders through healthy eating education
Selling the highest quality natural and organic products available
Satisfying and delighting our customers
Supporting team member happiness and excellenceCreating wealth through
profits & growth
Caring about our communities & our environment
Creating ongoing win-win partnerships with our suppliers
Definition of sustainability
Sustainable Development
Meeting the needs of the present generation without compromising the ability of future generations to meet their own needs.
(Brundtland Commission, 1987)
The Brundtland Report recommends that the international community should meet to discuss the growing environmental issues, and to examine how best to reduce the effects of human activity on the environment for future generations that is in line with their newly developed concept of sustainable development.
(The Brundtland Report, 1987)
Triple Bottom Line
Financial performance: improve profits and share dividends to shareholders.
Social performance : the responsibility of other social stakeholders.
Environmental performance: the measure of environmental protection.
(Merriman and Sen, 2012)
(Elkington, 1998)
The Importance of Embedded Sustainability
Embedded Sustainability is the incorporation of environmental, health, and social value into the core business with no trade-off in price or quality.
(Laszlo and Zhexembayeva, 2011)
Resourced Base Perspective
Environmental Perspective
Bolt-on sustainability Embedded sustainability
Goal Pursue shareholder value Pursue sustainable value
Scope Add symbolic wins at the margins
Transform core business activities
Customer Offer “green” and “socially responsible” products at premium prices or with diminished quality
Offer “smarter” solutions with no trade-off in quality and no social or green premium
Value capture
Focus on risk mitigation and improved efficiencies
Reach across all seven levels of sustainable value creation
Value chain
Manage company’s own activities
Manage across the product or service life cycle value chain
Bolt-on vs Embedded Sustainability
(Laszlo and Zhexembayeva, 2011)
Bolt-on sustainability Embedded sustainability
Relationships
Leverage transactional relationship. Stakeholders such as customers, employees, and suppliers are resources to be managed and sources of input
Build transformative relationships. Co-develop solutions with all key stakeholders including NGOs and regulators to build system-level change
Competitor Operate only in win-lose mode in which any gain is competitor’s loss
Add cooperation with competitors as potential sources of gain
Organization Create a “scapegoat” department of sustainability
Make sustainability everyone’s job
Competencies
Focus on data analysis, planning, and project management skills
Add new competencies in design, inquiry, appreciation, and wholeness
Visibility Make green and social responsibility highly visible and try to manage the resulting scepticism and confusion
Make sustainability performance largely invisible but capable of aligning and motivating everyone
(Laszlo and Zhexembayeva, 2011)
Creating Sustainable Value
6 Business Context
3 Product
2 Process
1 Risk
7 R
ad
ical
Inn
ovati
on
CostLaszlo (2003; 2011)
1 + 7 Value Creation
Value Destructiono Short term viewo Profit trade-offso Did Wholefoods consider this?
Risk mitigationo “Fail to prepare, Prepare to fail”o Sourcingo Embedded ethicso Collaborations
Efficiencyo Environmental efficiencyo Sustainable Sourcingo The Upper Room and Streetlytes
1 + 7 Value Creation
Product differentiationo Organico Healtho Lifestyle
New Marketso Conscious consumer market (Scotland)o Higher disposable incomeo Allegro Coffee
Protecting and enhancing the Brando Risk mitigationo Good practices = good reputation
1 + 7 Value Creation
Raising industry standardso Food labellingo British and Scottish produceo Ethics and sustainability
Radical Innovationo Supply Chain innovationo Renewable energy o Lifestyle
Harts (2005) Natural-Resource-Based View
A theory of competitive advantage based upon the firm's relationship to the natural environment.
Firms resources operationalized via 3 interconnected strategic capabilities:
1. pollution prevention
2. product stewardship
3. sustainable development
Driven by the challenge of irreversible global environmental damage
Harts (2005) Natural-Resource-Based View
Believes both the firms internal capabilities and environmental factors are important in gaining competitive advantage. View derived from Andrews (1971) Chandler (1962) Hofer & Schendel (1978) Penrose (1959).
Believes a firm should be concerned with its future position. Taking from Hamel and Prahalad (1994) idea of "competing for the future".
Valuable and costly to copy resources of a firm are key to maintaining competitive advantage. The capabilities creating the advantage should be supported by resources that are not easily duplicated by competitors (Rumelt, 1984)
Challenges of the Natural EnvironmentClimate Change
U.S. Historical Climatology Network (USHCN) (2010)
Challenges of the Natural Environment
Co2 Emissions
NASA (2012)
Challenges of the Natural EnvironmentGrowth in Population
United Nations (2011) World Economic and Social Survey 2011
Challenges of the Natural EnvironmentGrowth in Energy Consumption
United Nations (2011) World Economic and Social Survey
Whole Food's CompetenciesStrategic capability
Core Competencies Competitive advantage
Pollution prevention
Encourages store to Purchase from local suppliers
Code of Conduct
Ethical image
Product stewardship
Stakeholder integration by Whole Foods
Offering enjoyable grocery shopping experience
Highly selective in products they sell: Natural and Certified Organic
Perishable foods 67% of sales
Sells Private Label organic food as lack of organic brands
Quality and Service
Appeals to above average income earner
Sustainable development
Organizational set-up: locating where the demand is
Team-based environments- independent decisions
Acquisition as a means of expansion
Shared vision
In the 100 best Corporate Citizens
Reputation as No.1 natural food chain
Sustainable Value
Unsustainable (Value
Transfer)
Sustainable Value
Unsustainable (Lose/lose)
Unsustainable (Value Transfer)
Shareholder Value
+
+ Stakeholder Value
(Laszlo and Zhexembayeva, 2011)
Shareholder Value
Investors
Stewardship
Profits
Stakeholder Value
Employees
Benefits
Shared Fate
Culture
Suppliers
Local Producer Loan
Programme
Rewards Farmers
Community
Donations to food banks
5% Days
Whole Planet
Customers
Service
Education
Quality
Environment
Can they do more?
Whole Foods Walmart
Do Whole Foods Markets embed sustainability?
YES
Core Principles
Sustainable Aims
Stakeholder Orientation
Conscious Environmental Awareness & Effort
“It is our dissatisfaction with the current reality, when compared with what is possible, that spurs us toward excellence and toward creating a better person, company, and world.” (Whole Foods Market, 2012)
Balancing Triple Bottom Line
Organic
Happy Famers
Biologically Viable
Health & Safety
Zero Pesticides
372 Miles
Travelled
Non-Organic
Mistreated Farmers
Wasted Land
Poor Health & Safety
68 Pesticides
Flush and Wax
11,552 Miles Travelled
Andrews, K. 1971. The concept of strategy. Homewood, IL: Irwin.
Brundtland Commission (1987), Our Common Future , United Nations World Commission on Environment and Development. Oxford: Oxford University Press.
The Brundtland Report, 1987. Report of the world commission on environment and development: Our common future.[Online] available at: http://www.undocuments. net/wced-ocf.htm (accessed: 1st March, 2015).
Chandler, A. 1962. Strategy and structure. Cambridge, MA: MIT Press.
Conscious Capitalism. (2015). An Introduction to Conscious Capitalism. [Online] Available: http://www.consciouscapitalism.org/node/3998. [Accessed: 9th Feb 2015]
Elkington, J. (1998). Enter the Triple Bottom Line. [Online] Available: http://kmhassociates.ca/resources/1/Triple%20Bottom%20Line%20a%20history%201961-2001.pdf [Accessed: 1st March 2015]
Hofer, C., & Schendel, D. 1978. Strategy formulation: Analytical concepts. St. Paul, MN: West.
Hubbard, D.W. (2010). How to measure anything: finding the value of intangibles in business. New York City: John Wiley & Sons.
Laszlo, C, Zhexembayeva, N. (2011) Embedded Sustainability: The Next Big Competitive Advantage. Sheffield: Greenleaf Publishing. P121
Levy, D. L. (1997). ‘Environmental management as political sustainability’, Organization & Environment, 10 (2), pp.126-147.
References
References
Mackey, J, Sisodia, R (2013). Conscious Capitalism: Liberating the Heroic Spirit of Business. Boston: Harvard Business Review Press. p 87, 137, 194, 217, 218, 241
Michaelis, K. (2015), ‘Your apples are a year old”, Journal of lifestyle and food, 6 (22), pp.56-63.
National Pesticide Information Centre (2015). http://npic.orst.edu/
Penrose, E. 1959. The theory of the growth of the firm. New York: Wiley.
Hamel. G.. & Prahalad. C. K. 1991. Corporate imagination and expeditionary marketing.
NASA (2012) Climate change: How do we know? [Online] Available at:http://climate.nasa.gov/evidence/ Accessed 15 February 2015
Rumelt. R. 1984. Toward a strategic theory of the firm. In R. Lamb (Ed.), Competitive strategic management: 556-570. Englewood Cliffs, N: Prentice Hall
The Scottish Government (2013), Obesity Indicators 2013. [Online] Available at: http://news.scotland.gov.uk/News/Obesity-Indicators-2013-69f.aspx (Accessed: 10th March 2015).
Whole Foods Market (2015). Whole Foods Market: Home. [Online] Available: http://wholefoodsmarkets.com [Accessed: 10th March 2015}
U.S. Historical Climatology Network (USHCN) (2010) [Online] Available a: http://www.forbes.com/sites/eriksherman/2014/07/15/the-latest-climate-change-denial-fact-twisting/ Accessed 15 February 2015
References
United Nations (2011) World Economic and Social Survey 2011 The Great Green Technological Transformation. Department of Economic and Social Affairs
Vaughan, D. (2011)” The importance of capabilities in the sustainability of information and communications technology programs: the case of remote Indigenous Australian communities”, Ethics and Information Technology, 13(2), pp131-150.
Wong, J. (2015), ‘Organic Apples: Does it really matter?”, Wake the Wolves. [online] Availbale at: http://wakethewolves.com/organic-apples-vs-regular-apples-does-it-really-matter/ (Accessed: 10th March 2015).