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Starbucks & Wal-Mart Contrasting Sustainability

Introduction to Business Sustainability

Business sustainability generally refers to the management of triple bottom line and a process by which organizations manage their financial, social and environmental risks that are present in the business environment.  These three influences are sometime regarded as profit, people and planet. In the present era due to rise in competition level and various hurdles in the market it has become difficult for firms to sustain in the market and is leading to decline in their efficiency level (Carroll, 2014). In the present report Starbucks and Walmart has been chosen as the organizations where main motive is to analyse their mission, vision and core competencies that are linked with sustainability. By analysing all these elements it is possible to identify sustainability strategy of which company is effective and is profitable for the enterprise. Starbucks Corporation is one of the world’s biggest coffee chains which have its headquarters in Seattle, Washington, USA. Company has almost 21, 536 stores in 64 countries including United States, China, Canada, Japan, etc.

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On the other hand Wal-Mart Inc is also one of the biggest American multinational retail corporation that operates almost 11, 000 stores in 27countries under 71 banners. Company is very famous because of its different operations in terms of using ethical means to protect people, environment and business in most appropriate manner In case of both the firms ethics are the most notable difference which causes Walmart to experience myriad of dilemmas which Starbucks doesn't (Doppelt, 2009). For sustainability Starbucks follow 3 overlapping circle models and Walmart follow 3 nested dependencies model where main focus is on environment and people. Various tasks have been covered in the report which includes mission, vision of both the firms and their core competencies that supports in gaining competitive advantage.

ANALYSIS

For sustainability both firms Starbucks and Walmart has adopted varied strategies that provides support to the companies at the time of serving their markets. Mission of Starbucks is to inspire and nurture the human spirit- one person, one cup and one neighbourhood at a time (Starbucks., 2013). Values of company consider developing a culture of warmth and belonging where every individual is welcomed, acting with courage, challenging the status quo and determining new ways to grow the enterprise, delivering the best to target market. So these are some of the main values that firm has developed so as to satisfy need of its target market in efficient manner.  Main core competencies of Starbucks includes quality, customer service, product advancement and care for its employees. All these core competencies differentiates Starbucks from other firms operating in the same sector. On the other hand mission of Walmart  is to save people money so that they can live better (Wal-Mart., 2013). Furthermore core competencies of Walmart includes culture, low cost operations and distribution. It supports to perform well in the market. Mission,vision and core competency of both the firms are effective and provides idea about the aims and objectives being set by management.

As per view of  Carroll (2014) firm like Starbucks operates in very large platform so it is required for company to carry out sustainable business so that every activity must be in favour of environment and customers of the firm. Presently 3 overlapping circle model has been adopted by the management where economic, environmental and social factors are integrated by firm so as to work in favour of them (Flamholtz and Randle, 2012). All the three factors are considered very important by management especially environmental and social through which business is affected. Environmental challenges are increasing at faster pace so firm has to started to respond in favour of it by using raw materials that are eco friendly and for dealing with social factor coffee is offered to them keeping in view their taste and preference.

According to Coleman, Gulati And Segovia (2012) sustainability is the most crucial issue that organization has to consider as it has direct impact on sales and profitability position of the enterprise. Starbucks has started to take initiatives in favour of the surroundings where management has introduced Earth Sleeve which is designed with less raw material make up almost by 85% post consumer fibre content and by 15% truckload yields of the entity has improved (Leavy, 2013). As per view of Doppelt  (2009) Starbucks has started to focus on recycling programs and reducing wastage which is beneficial for the society. Management has made many commitments so as to develop 100% of the firm owned stores in accordance with LEED certification requirement. Company has started to provide its customers with five pounds bag of soil enriching coffee grounds that could have landed in the landfill.  Organization has also developed recycled content cup sleeves so as to prevent customers from double cupping. Through all these strategies organization wants to work in favour of environment (Leavy., 2012).

As per view of Farver (2013)  management has taken initiative so as to reduce its energy consumption by 25% for which LED lights have been installed in every outlet. Firm has reduced its water consumption by 25% and new filtration system has been installed for the same so as to save water in every possible manner. On the other initiative has been taken so as to support farmers so that quality of coffee can be improved to extent. Furthermore Starbucks has started to work with different policy makers, non government organizations and other agencies in order to save environment in best possible way (Coleman, Gulati And Segovia, 2012). So in this way it can be said that sustainability model adopted by business enterprise is quite effective and supports in dealing with the environmental and other issues that affects overall operations of the organization. According to Fishman (2006) company well serves its customers by offering different type of coffee that is totally different in taste and this type of product is not offered by any other company worldwide in the market. Furthermore for satisfying need of all the stakeholders sustainability strategies of the firm are effective like for customers Eco friendly products are offered, to satisfy need of government company strictly follows environmental regulations and other guidelines.

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Starbucks embeds CSR philosophy into its website and press release by assessing the importance of sustainability in the modern era and it is a part of strategic goals of the enterprise (Farver, 2013). In annual report of Starbucks issue of sustainability has been clearly highlighted and benefits derived by offering products in favour of environment has been shown by entity.  In short sustainable business can easily survive in the market for long period of time and assist in dealing with all the major challenges being faced.

On the other hand entity like Walmart has adopted 3 nested dependency model where organziation carries out operations to work in the direction of protecting people, environment and profit in appropriate manner. As per view of Senge Smith, and et. Al (2010) when issues linked with sustainability raised in the environment then Walmart was the first company to respond in favour of it and started to sell eco friendly products. But it was not successful and lead to negative publicity for the enterprise (Fishman, 2006). Organization believes in saving money in order to live better life and through this entity is able to support people to live better life in various ways. Firm is supporting society in every possible manner so that environmental burden can be reduced to extent.

According to Soule (2011)  Walmart concept of saving money of the people is totally unique in nature and this is supporting customers to live a happy life that is full of joy. Organization is assisting other firms to share same mission as developed by the management and timely new programs are designed for supporting environment. Firm is regarded as the largest retailer and various goals have been developed for saving environment such as to become 100% renewable energy enterprise and to offer products that are eco friendly (Senge, Smith, And et. al., 2010). Firm has started to install solar panels in all its plants so that renewable sources of energy can be used maximum. Company also tries to exceed the expectations of customers by providing them superior services at each and every opportunity and also by providing the quality products at very low prices.

Walmart serves its target market in unique manner where different type of products are offered to them that are highly differentiated. Firm has developed sustainability strategies through which all the products offered are eco friendly and supports in reducing the environmental burden of the organization. As per view of Flamholtz and Randle (2012) for satisfying need of stakeholders different plans have been prepared where expectation of every stakeholder is kept on the top of priority and is profitable for the enterprise. In case of customers eco friendly products are provided to them at an affordable price and timely they are modified so that customers may not shift towards other brand. To satisfy need of government firm complies with the guidelines developed linked with saving surroundings from its adverse impact etc. Furthermore firm has developed healthy relationship with its suppliers so that best raw material can be supplied to firm in favour of the environment. So in this way expectation of every stakeholder is satisfied in efficient manner and provides many advantages to firm like rise in profitability level and sales (Soule, 2011). According to Leavy (2013) all the plans are developed by management by keeping in view overall expectations of its stakeholders so that they may work in favour of business enterprise. Furthermore Walmart embeds CSR philosophy into its website and press release by showing its business as environmental friendly and all the initiatives that management is taking to reduce its environmental burden. This has positive impact on the brand image of organization and supports in accomplishment of desired objectives. Two companies are vastly different in their approach to CSR as Starbuck's approach to CSR does not  strongly focuses on environment and main stress is on economy and society also. But approach adopted by Walmart supports in reducing environmental burden and firm is working in favour of surroundings since past (Carroll, 2014).

CONCLUSION

From the entire study it has been found that CSR model of Walmart is more effective as compared with Starbucks as it totally focuses on environment and is regarded as one of the major factor that needs to be considered to become sustainable business.  On the other hand model adopted by Starbucks gives equal importance to society, economy and environment.  Initiatives taken by Walmart are more effective as compared with Starbucks where firm is offering Eco friendly products since past and other actions have been taken so as to save surroundings. So in this way it can be said that both companies are working hard to respond in favour of sustainability and models adopted are providing them support for the same.

REFERENCES

  • Carroll, A., (2014). Business and Society: Ethics, Sustainability, and Stakeholder Management. Cengage Learning.
  • Coleman, J., Gulati, D. And Segovia, O., (2012). Sustainability Integrating Preservation and Profits. Harvard Business Review.
  • Doppelt, B., (2009). Leading Change Toward Sustainability - 2nd Edition: A Change-Management Guide for Business, Government and Civil Society. Greenleaf Publishing.
  • Farver, S., (2013). Mainstreaming Corporate Sustainability: Using Proven Tools to Promote Business Success. Paperback.
  • Fishman, C., (2006). The Wal-Mart Effect: How the World's Most Powerful Company Really Works--and HowIt's Transforming the American Economy. Penguin.
  • Senge, P., Smith, B., And et. al., (2010). The Necessary Revolution. Working together to create sustainability. Trade paperback.
  • Soule, S., (2011). Accomplish the Impossible: The Six Secrets of Sustainability and Transformation for Business, Art, Science & Life: Revealing Wisdom Hidden in the. ATOM Press.
 
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