Case Studies

Nike: Caring About Supplier Relationships

 

“Fifteen years ago, Nike underwent intense scrutiny and brutal attacks for its global supply chain management policies and priorities. People across the world were burning Nike shoes instead of wearing them; customers were boycotting Nike products; and in 1998 the company’s earnings dropped by 69%.

 

So, what began fifteen years ago as Nike’s horror show of globalization has evolved today into the inspirational story of its transformation to a sustainable global enterprise. Nike is passionately committed to “build a sustainable business and create value for Nike and [its] stakeholders,” and not just its shareholders. Sustainability is no longer about risk management for Nike; it is about growth. Leaders and employees of the company recognize the interconnection between sustainability, brand enhancement, capital efficiency and profitability — Nike’s growth strategies are built on these four pillars. CEO and President Mark Parker is also greatly committed to “decoupling” Nike’s “profitable growth from constrained resources.”

(Dr. Aarti Sharma , “Swoosh and Sustainability: Nike's Emergence as a Global Sustainable Brand”, May 17, 2013.)

Costco: Caring About Employees and Customers

 

“Some Wall Street analysts assert that Mr. Sinegal is overly generous not only to Costco's customers but to its workers as well.”

“Costco's average pay, for example, is $17 an hour, 42 percent higher than its fiercest rival, Sam's Club. And Costco's health plan makes those at many other retailers look Scroogish. One analyst, Bill Dreher of Deutsche Bank, complained last year that at Costco "it's better to be an employee or a customer than a shareholder."

“Mr. Sinegal begs to differ. He rejects Wall Street's assumption that to succeed in discount retailing, companies must pay poorly and skimp on benefits, or must ratchet up prices to meet Wall Street's profit demands.”

“Good wages and benefits are why Costco has extremely low rates of turnover and theft by employees, he said. And Costco's customers, who are more affluent than other warehouse store shoppers, stay loyal because they like that low prices do not come at the workers' expense. "This is not altruistic," he said. "This is good business."

http://www.nytimes.com/2005/07/17/business/yourmoney/how-costco-became-the-antiwalmart.html

CVS: Caring About Customers

 

“CVS, the nation's second-largest pharmacy chain, said Wednesday it would stop selling all cigarettes and tobacco products nationwide by October, saying they have no place in a drugstore company that is trying to become more of a health-care provider.

For CVS, the move will be costly. The drugstore chain estimates it will forgo $2 billion in annual revenue from tobacco and other sundries as a result. That hit on revenue will shave about six to nine cents a share off of operating earnings this year and about 17 cents annually from next year's earnings. ” (CVS to Stop Selling Cigarettes, Wall Street Journal, Feb. 5, 2014)

Southwest: Caring About Culture and Employees

 

“On Sept. 12, 2001, there were no commercial flights in the United States. It was uncertain when airlines would be permitted to start flying again—or how many customers would be on them. Airlines faced not only the tragedy of 9/11 but the fact that the economy was entering a recession. So almost immediately, all the U.S. airlines, save one, did what so many U.S. corporations are particularly skilled at doing: they began announcing tens of thousands of layoffs. Today the one airline that didn't cut staff, Southwest, still has never had an involuntary layoff in its almost 40-year history. It's now the largest domestic U.S. airline and has a market capitalization bigger than all its domestic competitors combined. As its former head of human resources once told me: "If people are your most important assets, why would you get rid of them?“ (Newsweek, 2/4/2010, “The Case Against Layoffs: They Often Backfire”)

Salesforce: Caring About Communities

 

“Defining a higher sense of purpose at Salesforce was very important to Marc Benioff, founder, Chairman and CEO of Salesforce. “Companies can do more than just make money, they can serve others,” says Benioff. "The business of business,” he continues, “is improving the state of the world."

“Salesforce solidified its organizational purpose by instituting what it refers to as the “1-1-1 Model.” The model utilizes Salesforce's technology, people, and resources to help improve communities around the world.”

“When a new employee joins Salesforce, the 1-1-1 Model is the highlight of orientation. Once they receive their computer, company messages, and so on, Salesforce sends the new cohort of recruits into the community. On an employee’s very first day, they go out and spend time doing something useful as a volunteer. It is an example of the company’s intent to walk the talk of its higher purpose.” (Salesforce CEO Marc Benioff Says The Business Of Business Is Improving The State Of The World, Dan Pontefract, Forbes, Jan 7, 2017.)

https://www.forbes.com/sites/danpontefract/2017/01/07/salesforce-ceo-marc-benioff-says-the-business-of-business-is-improving-the-state-of-the-world/ - 4e7467907eb0