The Consuming Public and the Effects of Environmental Damage - Research Paper Example

 STRENGTHS 1. Promoted on basis of Fair Trade Principles 2. Deals in High Quality and Innovative Products 3. Local involvement of Producers and Distributors of Products resulting in strong supply chain 4. Upholds generation of shareholders value and earning investor’s confidence 5. Proven track record of innovative designs and performance in sport balls 6. Has great concern for environment hence purchases latex from sources that have respect for ecology and pays a premium for this product 7. Very conscious of working conditions of the workforce of its suppliers 8. Ensures proper health and environmental safeguards as well as fair pay for the workers of its suppliers. 9. Partner is involved personally to ensure the welfare of these workers even in remote locations 10. Partners have even gone beyond the workers to ensure that the entire community they come from received benefits like sanitation and education in order to raise the loyalty and the productivity of the workers 11. Partners have also provided stimulus to the community by providing sports, skills and fair dealing with distributors for the benefit of the entire communities 12. The company regularly invites volunteers from Universities in England who work as apprentices and are given opportunities to work as brand ambassadors for the company in its overseas supply chain locations 13. Universities and educational institutions too appreciate the company’s efforts and seek the company’s sponsorship for their students 14. The mutual arrangement augments and fosters a great public relations environment and also creates a wider marketing experience for the participants 15. This moral approach pitches DTCo in a favourable competitive position with its competitors 16. WEAKNESSES 1. Lack proof of Fair Trade, has no certification from recognized bodies respected by buyers 2. The self promotion of Fair Trade Practice is seen as unverified self judgment by consumers 3. Consumers are swayed more by authentication and certification by a third party like Fairtrade © 4. Product range limited to sport balls, sports shoes and sport clothing only 5. The company is fairly small compared to larger players with wider range of products 6. The company is also unable to support the certification fees by FairTrade© 7. The volunteers are not well trained and are unprepared for the work as a result their behavior is detrimental to the cause of the company OPPORTUNITIES 1. Even in a large market a niche segment can be created representing higher values that DTCo symbolizes by highlighting the fair trade practices undertaken by the company with workers and communities of the production channels. 2. Many consumers conceive that larger corporations are far removed from the workers they profess to benefit hence believe that the fair trade practice of a smaller company are more reliable and here the DTCo can project itself as a more caring company since its partners are personally involved in the fair trade practices 3. There is also the perception amongst many consumers that Fairtrade© as a brand has become too commercialized and may not be able to portray the true effort by the certified users which may be less than what they stand for and this represents a big window of opportunity for DTCo 4. The net offers a great opportunity as niche consumers are now turning to this medium for purchases and the social media is a great gateway for projecting the DTCo’s fair trade policies in comparison with Fairtrade© policies which cannot be so enlightening. 5. Today the consumer is quite keen in participating in the social governance hence DTCo is in a more receptive position and can offer a unique opportunity for a consumer to feel involved in a project that enhances fair trade and this personal satisfaction helps in purchase decisions THREATS 1. Large Multinationals who have entered this trade are a threat for small operators like DTCo 2. Fairtrade© has become a commercial symbol recognised by both trade and the consumers as authentication of fair trade that represents both environmental concerns as well as welfare concerns of the workers involved in the production distribution supply chain 3. Fairtrade© has become a worldwide symbol of fair trade and great value has accrued to it as a brand which is very difficult to compete with 4. FairTrade© makes its easier for the consumer to decide in favour of a product since its authoritative status makes purchase decisions Ans. 2 An examination of each weakness will provide an answer to deal with the issue. 1. Lack proof of Fair Trade, has no certification from recognized bodies respected by buyers. This is a weakness that is exploited by some consumers and not by all. The perception that needs to be promoted here is that bigger companies are more concerned with their profits hence adopt fair trade practices in name only by doing minimal in this regard. If they adopt fair trade practice in full this affects their bottom lines. Hence DTCo should aggressively highlight the point that it takes personal care at partner’s level to ensure that fair trade is indeed exercised by its suppliers and distributors. 2. The self promotion of Fair Trade Practice is seen as unverified self judgment by consumers. This is the perception that needs to be tackled at its root. The question that needs to be posed to the consumers by DTCo should be that such activities can be vetted and verified by making probe by other consumer forums and bodies. Fairtrade© is another competitor and hence not reliable in validation of DTCo’s practices. Moreover their can be a question on the certification provided by Fairtrade© as it is not shown as to what depth they have probed on the activities of their certified clients. Even they have to relay on the replies of their clients about their activities. 3. Consumers are swayed more by authentication and certification by a third party like Fairtrade ©. This is an unfortunate case as the consumers do not wish to undertake the exercise of checking by themselves. In many cases the larger organizations have pure intentions but the actual survey or inspection is carried out by individuals who may or may not be as scrupulous as their employer. What then is the guarantee that the certification is true to its intentions? 4. Product range limited to sport balls, sports shoes and sport clothing only. This is a true weakness as this restricts the number of consumers. One answer could be that DTCo does not wish to expand intentionally and wishes to cater to a niche market only. However the better way to overcome this issue would be to expand the product range and create interest for a larger number of buyers. This will mean more efforts on the fair trade practice front but this is something that needs to be done eventually if competition is to be met head on. 5. The company is fairly small compared to larger players with wider range of products. This weakness can indeed be turned into a major asset by using this as a feature that ensures integrity of the company and its employees. There are always customers who prefer to go to a smaller company as they get more personalized attention and feel more comfortable to discuss their concerns on a personal platform. This aspect is realized by bigger players too as they are also understanding the growing importance of relationship management and are appointing increasing number of customer relationship managers for this purpose. DTCo needs to use this leverage cleverly in its favor. 6. The company is also unable to support the certification fees by FairTrade©. This is indeed an area where DTCo should aggressively inform its clients that it prefers to spend a larger amount directly on the communities it serves in persuit of fair trade practices rather than pay it as fees for getting a certification that is not so active in the actual practice itself. This apparent weakness too can be converted to its advantage if it can properly portray this fact and back it up by actual figures which will indeed be very impressive for its clients. 7. The volunteers are not well trained and are unprepared for the work as a result their behavior is detrimental to the cause of the company. This is a key area that needs unqualified attention from the top level. Apart from giving bad publicity this also shows an indifference on the part of the company that takes so much care for the welfare and benefit of the workers and their communities. This is an anomaly that needs to be corrected immediately. This should be done by offering and enforcing proper training, both in theory as well as in practice, and inculcated as the company culture. The training modules should be properly designed and evaluations need to be done at every stage before volunteers are given independent charge of their work. This will eliminate the ugly scenes and events that tarnish the image of the company and leaves sour notes for both the participants of an event. Ans 3. A certificate from Fairtrade© is helpful for those companies that try to do the minimum required to get such a certificate. The real intention behind getting such certification is never to evaluate one’s own service level. It is the need to get this for the purpose of displaying that a minimum service level has been achieved. There would be meaning to such certification if there were grades which would show that the next level is still to be reached. A good example is that of a performance based standard where the quality of performance is judged on a scale of say 1-5. Having achieved level 1 means that there are 4 more to achieve. In case of a certificate like the type issued by Fairtrade© would indicate that the company is practicing fair trade policies that are envisaged to be good for the under trodden. But what is the benchmark for this level? Who can set such a benchmark for different communities in different countries with a variety of differences? Fair trade has often been misunderstood as free trade. The underdeveloped economies of the world have now been given a chance under fair trade to practice free trade and get a share of profits or benefits from the developed world. The Multinationals have for long exploited the workers of the under developed countries and have encouraged sweatshop practices for financial gains. However a movement created by the awareness aroused by Government and Non-Government agencies has lead to boycott of such products and has forced companies to rethink ethical sourcing to bring back alienated customers. These companies look out for certification by organizations like the Fairtrade© as this will symbolize their fair trading practice. But their patronization of Fairtrade© brings about the impartiality of the brand itself. Indeed it is the independent organizations that often come out with true facts and generally they point to the misuse of such certification by the larger corporations. Ethical sourcing is at a nascent stage and the consumer is the final decider of the issue. Only with the consumer’s strong convictions can this movement be taken ahead and for this communication of ethical issues including their damaging contribution to environment needs to be highlighted. With the demise of colonialism democracy became the chosen form of governance, barring few dictatorships, in the whole world. This brought about two major changes. One was the promotion of capitalism as a practice of free trade and the second was slow but certain removal barriers in trade between nations. The first gave the public a choice they never had before and rags to riches stories fired the imagination and fuelled the entrepreneurial spirit. The second offered the opportunity of equality in status that lured the buyers to opt for foreign made goods for raising their own standards of living. Multinationals have always claimed that the world is becoming smaller with the introduction of Free Trade practices that have evolved with the democratization of countries. But this was mere cover for their greed to add to their market share and to the bottom lines. It is true that some ethical values were also developed to offer better quality at competitive rates but the driving force was the capitalistic urge for more profits and better financial clout. The real issue with DTCo is that if they go for a certification from Fairtrade© it will be perceived by their consumers that they have reneged on their pledge to uplift the communities that they were serving. Indeed what DTCo is now doing is more than what is required under the certification norms of Fairtrade©. This would mean that they are downgrading themselves only in order get a larger share of the market. Ans. 4 DTCo have a difficult choice. Before we delve into the present economic situation it would be prudent to see how the fair trade movement evolved and what will be the implication in the current recessionary scene that exists on a world wide scale. The expansion of civilizations has been largely based on trading practices. Trade and Commerce have been drivers of extension of territorial forays in the past and, in modern days, with the royalty become defunct, even extinct in some cases, the role has been ably taken over by large companies, the Multinationals. The twin objectives of war for territorial gains of the former kingdoms and the present day Multinational remain the same; expansion of markets to cater to larger populations and obtaining cheap labor for work from the new territories. Whereas formerly they made use of slave labor, often not caring about their survival, today they pay subsistence or even less for running their factories and establishments. All the high talk of Human Rights is meant for conference tables and for the populations of the victors and not the vanquished. In the present context the Multinational need to expand their markets and in search for consumers globally they are attracted by the huge populations of the developing or the under-developed world. They take advantage by offering them the goods that they have developed for their own affluent populations. However where they face the possibility of lower sales due to the high prices they tend to manufacture their products locally for local sales at lower prices compared to their home markets. The other angle to the story is that when they face competition from their rivals who are as big and as powerful, they need to lower prices to face such competition. The obvious way out is again to manufacture their products in the underdeveloped or developing markets at lesser cost and consequently be able to lower prices to their home markets. With the demise of colonialism democracy became the chosen form of governance, barring few dictatorships, in the whole world. This brought about two major changes. One was the promotion of capitalism as a practice of free trade and the second was slow but certain removal barriers in trade between nations. The first gave the public a choice they never had before and rags to riches stories fired the imagination and fuelled the entrepreneurial spirit. The second offered the opportunity of equality in status that lured the buyers to opt for foreign made goods for raising their own standards of living. Multinationals have always claimed that the world is becoming smaller with the introduction of Free Trade practices that have evolved with the democratization of countries. But this was mere cover for their greed to add to their market share and to the bottom lines. It is true that some ethical values were also developed to offer better quality at competitive rates but the driving force was the capitalistic urge for more profits and better financial clout. The few bastions of non-capitalist countries were not prone to be left out and one by one they too fell for the lure of profits and their populations too could not remain immune to the world wide phenomenon of free trade. But the free trade was not fair trade as was trumpeted by the same Multinationals who were guilty of unfair trade practices for profit. Like the old kingdoms they too exploited the new markets and both the consumers and the workers were exploited unabashedly. The consumer of course had some choice by not buying their product, but the labor had none. For the first time most were getting employment, albeit at subsistence wages, and they accepted this as a gift. Local laws were either too skewed or were too subservient to the Multinationals wishes that they ignored the plight of the sweatshop labor practices. The emphasis on Fair Trade is generally consumer driven.  There is research that 25% people are making their decisions on social and ethical issues rather than price. This percentage is big but not significant enough to change the retailers who have larger patronage from people who look for bargains and discounts and have little concern of the source. Unless the consumer feels strongly about it, out of concern or guilt, not much will change. It is futile to expect the retailers and Multinationals to go out of their way and change the situation by adopting ethical habits. They will do so only when compelled by consumer movements. The Multinationals have a larger stake as they are in the eye of the storm both from consumers and governmental regulators, egged on by the NGO’s. They do take confirmative action but the idea is more to appease the noise makers. They care to the extent to which they can get away with the exercise without damage to their bottom lines. However it is now easier to send information across to consumers. The net savvy population turns to the World Wide Web and this is the surest way of connecting to the ordinary consumer and telling him to join the global concerns. Communication of the plight of the third world workers needs to be highlighted through various mediums and in time there is a good chance that people will matter more than price. The consumer is the last link and the last resort to put things right and the right perspective needs to be hammered home for effectiveness and for achieving the goals of ethical sourcing for the larger benefit of mankind. With Global warming now affecting the ordinary person everywhere in the world this would be the right time to touch the humane chord and inform the consumers that this is partly due to wrong manufacturing practices, aided by unethical means of sourcing that is contributory to the predicament of mankind. Maybe this will ring true and consumers will finally accept that better practices can delay if not avert the larger environmental disaster that seems to loom over the planet. In the light of the above the choice before DTCo is to retain its identity and not to get the Fairtrade© certification and get tainted like the multinationals. It can raise the funds required on this basis and it has a track record to prove this. The investors are also aware of the twin fact of the environmental concerns as well as the tight money conditions. They too would back the company with real concerns for fair trade and not by just getting the label of Fairtrade©. The same investing public is also the consuming public and the effects of environmental damage as well as the world fiscal status is clear to them as well. Read More