Question

1. What are the benefits of integrating Corporate Social Responsibility (CSR) activities and the goal of sustainability into a firm's value chain? How did it help the Ferrero Group to gain competitive advantage in the global chocolate industry?

Answer 1

Benefits of integrating Corporate Social Responsibility (CSR) activities and the goal of sustainability into a firm's value chain, are –

• It makes the organizations to transform their business activities to focus towards the needs of stakeholders
• It helps in developing organization's code of ethics
• Helps in promoting public relations initiatives
• It helps in initiating triple bottom line reports
• It helps in establishing moral obligations, sustainability and offers license for business operations
• It helps in improving organization’s image, strengthen the stock and brand value.

Hence, strategic corporate social responsibility (CSR) engages the firm’s value chain in social issues along with the present market opportunities and most importantly the core business operations directly links with the social issues. It helps in social value creation such as generating income for lower income groups or offering medial conditions to poor people, etc.

Ferrero Group to gain competitive advantage in the global chocolate confectionery industry, faced challenges with changes in consumer needs, and price volatility and scarcity of raw ingredients. Hence, to achieve sustainability goals, Ferrero incorporated numerous sustainability initiatives in its supply chain and raised the organization through vertical and horizontal integration. Ferrero group set sustainability goals for themselves, such as, controlling and being able to trace the supply of raw ingredients, use of packaging made from renewable sources, 100% sustainable palm oil certified RSPO, enhancing the activities of the Ferrero Foundation, implementation of a global action plan on energy, etc.