Marketing Strategy and Competitive Positioning pdf ebook

New business models
The compelling logic of the Porter and Kramer (2006) approach is that the real impact 
of corporate social responsibility imperatives is in encouraging the development of new 
business models that address both commercial and social needs at the same time. Porter 
and Kramer conclude that adding a social dimension to the value proposition adds a new 
frontier for our thinking about competitive positioning and competitive advantage in busi-
ness and marketing strategy. They also note that the number of industries and companies 
whose competitive advantage can involve social value propositions is rapidly growing. We 
saw earlier that companies such as Whole Foods Market are illustrative of this.
For example, consider the emergence of ‘eco-entrepreneurs’ – transforming traditional 
business models with new technologies. Fast-moving ‘eco-upstarts’ may be better positioned 
than established companies to pursue social goals with commercial benefits. For example, 
PlanetTran is a chauffeur and airport shuttle service that uses only hybrid cars and aims to 
save the planet ‘one car journey at a time’. Successful with the eco-conscious business com-
munity in Boston and San Francisco, PlanetTran supplies corporate clients with quarterly 

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HOW COMPANIES ARE RESPONDING TO THE CSR MANDATE
reports measuring the environmental benefits of using PlanetTran compared to traditional 
transport arrangements (Knight, 2008).
Or, look at the impact of the ‘sharing economy’ on traditional car companies – BMW 
has extended its DriveNow, pay-as-you-go car-sharing club to London after its successful 
origins in Germany, Austria and the United States. One estimate is that one sharing vehicle 
removes the need for 32 personal car purchases (Sharman, 2014).
17.7.2 Employee/manager perceptions
The impact of CSR initiatives on customer value perceptions is also likely to be moderated 
by a company’s employee and manager perceptions of the initiatives and the relevance 
and importance of them. On the face of things, companies can often anticipate positive 
and supportive employee/manager perceptions of CSR that will enhance the impact on 
customer value. Nonetheless, questions may still be raised about the degree to which CSR 
initiatives shape interactions between company personnel and customers in ways that impact 
positively on customer value. Giving approval to CSR concepts may differ from changing 
the way work is done to reflect actual CSR initiatives. For example, consider the degree to 
which salespeople buy-in to CSR and the degree to which their selling efforts reflect CSR 
to enhance customer value – this appears often to be limited and a victim of salesperson 
cynicism (Piercy and Lane, 2011). Certainly, research suggests that high-performing compa-
nies fully engage their employees in their CSR objectives, rather than adopting a top-down 
approach (Pohle and Hittner, 2008).
17.7.3 Other stakeholder perceptions
Supply chain partners may be very significant in creating pressures towards more responsible 
behaviour. Walmart has, for example, led the way in asking suppliers to measure and report 
their greenhouse gas emissions, with the goal of helping suppliers to ‘get the costs of carbon 
out of the system’ (Harvey and Birchall, 2007). Recall also that we commented earlier on the 
impact of other stakeholders, such as investors, the government and regulators, and other 
stakeholders in the value chain.
17.7.4 Company social credibility
An additional complication is whether a company’s corporate reputation supports CSR 
initiatives, in the sense that such initiatives are perceived externally as well-meaning and 
sincere (and likely to be reinforced and maintained), or alternatively as cynical and manipu-
lative (and likely to be minimised or abandoned in favour of the next ‘marketing gimmick’).
The impact of social credibility (or the lack of it) may be profound. For example, US 
retailer Walmart has long had a reputation for aggression and ruthlessness in dealing with 
suppliers, competitors and employees – branded the ‘merchant of shame’ by critics of its 
labour policies (Berner, 2005). Nonetheless, in recent years, Walmart has focused consid-
erable attention on employment diversity issues and environmental protection, and yet 
has failed to convince its environmental critics of the company’s sincerity. To champion 
Walmart’s social contributions, then-chief executive Lee Scott used his annual shareholder 
meeting to offer to partner with governments on issues from the environment to healthcare 
reform. Yet many still doubt the sincerity of Walmart’s social change intentions (McWil-
liams and Zuckerman, 2008).
Similarly, as noted earlier, Coca-Cola continues to struggle to overcome the perception 
that its business model involves ‘waste, pollution and questionable nutrition’, and is work-
ing hard through water- and energy-saving projects to overcome criticisms, collaborating 
with environmental campaign groups such as Greenpeace (Wiggins, 2007). Establishing 
credibility as an ethical company may require overcoming perceptions of a company’s his-
tory as well as initiating new CSR projects.

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