It is very interesting to me when contrasting Starbucks and Wal-Mart. Starbucks receives positive media coverage for treating their employees very well and paying for their health insurance (even for part-time employees). But to do this, Starbucks charges a very high premium for their coffee. In fact, I know a lot of people who prefer Dunkin Donuts and McDonald’s coffee due to the cost savings. On the other hand, Wal-Mart has been criticized in the media for a reputation for paying low wages and skimping on health insurance, but their prices on most products are the lowest in the market and these savings to the consumer is obvious. Most experts say the savings that Wal-Mart creates for their consumers makes up for the Mom & Pop competition that they wipe out. Many economists consider Wal-Mart the greatest inflation fighter in history due to their ability to keep prices low across the board. So overall, which company is being more socially responsible and benefiting the consumer as a whole?
How many of us as an individual would like to pay premium for coffee knowing the fact that the premium charged for coffee would actually be used by company to pay their employees well. A large portion of populations are middle class who determine their purchase based on the cost savings and want value against the price paid.
StarBucks targets premium segments of society who pays premium for the value received. The profits derived hence is being used to pay employees well or for that matter be channeled towards social causes.
While Companies like Wal Mart targets large sections of society and operates on volume to boost profit by passing over profits to consumers. From a commercial view point, Wal Mart focuses on Consumers demand and believes that company can run and stay in cut throat competition with enterprise or customer first behavior. The higher profits again can be used for employees welfare and retention, but to do that an organization has to pass saving to consumer first.
Having said this, we still need both types of companies who can target both sections of society to boost overall economy.So it will biased to say that company socially responsible can only benefit the consumer as a whole.
It is very interesting to me when contrasting Starbucks and Wal-Mart. Starbucks receives positive media coverage...
Wal-Mart’s Global Expansion Established in Arkansas in 1962 by Sam Walton, over the last four decades Wal-Mart has grown rapidly to become the largest retailer in the world with sales of US$330 billion, 1.8 million associates (Wal-Mart’s term for employees), and almost 7,000 stores. Until 1991, Wal-Mart’s operations were confined to the United States. There it established a competitive advantage based on a combination of efficient merchandising, buying power, and human relations policies. Among other things, Wal-Mart was a leader...