Marketing Strategy and Competitive Positioning pdf ebook

Moral obligation: the duty of a company to be a good citizen and to do ‘the right thing’. 
However, there are many dilemmas faced in such questions – Google’s entry to the China 
market created a major conflict between Western dislike for censorship and the legal 
requirements imposed by the Chinese government.
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Sustainability: emphasis on the environmental and community impact of the business. 
To an extent this may reflect enlightened self-interest – changes to packaging at McDon-
ald’s have reduced its solid waste by 30 per cent.
● 
Licence to operate: the tacit or explicit permission a company needs from governments, 
communities and other stakeholders to do business – this permission is being progres-
sively withdrawn from the tobacco industry.
● 
Reputation: CSR initiatives to enhance a company’s image, strengthen its brand, improve 
morale, or even raise share prices. Some organisations have a distinctive position based 
on an extraordinary long-term commitment to social responsibility – for example, Ben 
& Jerry’s and The Body Shop.
Perhaps, to this list can be added the need to respond to the CSR-based positioning of 
competitors, who are seeking advantage through an enhanced franchise with the customer, 
and to coping with explicit customer demands for the standards they expect in, for example, 
their suppliers. Interestingly, Porter and Kramer note that ‘all four schools of thought share 
the same weakness: they focus on the tension between business and society rather than their 
interdependence’ (2006, p. 83).
Thomas Stewart (2006) underlines this point. He notes the contradiction between the 
classic argument that a company’s only responsibility to society is to make as much money 
as it legally can, compared to the modern reality that a company that shunned society would 
be ostracised, in turn, to its cost. The opposite problem for executives may be the conflict 
between social initiatives and business goals – is there perhaps hypocrisy in the brewer 
urging consumers not to drink, or the oil company promoting fuel conservation? Stewart’s 
point is that such views share a logical flaw: they assume that companies and society have 
opposing interests. Thus, it follows that starting from the premise that business and society 
are interdependent identifies CSR as a strategic opportunity that is of far greater importance 
than moral duty alone.
Importantly, CSR may be associated with significant and measurable benefits for com-
panies. Indeed, Peter Senge and colleagues argue that after years of scepticism, big com-
panies are genuinely acting to cut waste, cut carbon emissions, find sources of renewable 
energy and develop sustainable business models (Senge et al., 2008). There is an increasingly 
widespread view that there is a business case for social initiatives – behind the drive for 
sustainability lies a growing belief that environmental and social projects not only improve 
corporate reputations, but also foster innovation, cut costs and open up new markets 
(Skapinker, 2008b). Unilever’s Pureit machine is illustrative – it cleans water to provide 
drinking water without boiling or the use of mains electricity, and purifies water more 

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THE OTHER SIDE OF CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
cheaply than boiling. Developed by Hindustan Unilever in India, the social and health 
benefits of lower costs for clean drinking water are evident, but also the potential market 
for the product in the rural areas of developing countries is huge. 
Indeed, some companies have made high-profile efforts to position themselves as socially 
responsible, as an explicit part of their strategy, which may in part be a response to external 
critics, but also part of the underlying vision of what a business is about. Some go even fur-
ther in advocating the combination of business and social goals. Moss Kanter uses the term 
‘vanguard companies’ to describe those that are ‘ahead of the pack and potentially the wave 
of the future’ because they aspire to be ‘big but human, efficient but innovative, global but 
concerned about local communities [and] try to use their power and influence to develop solu-
tions to problems the public cares about’. She concludes from her studies of companies such 
as IBM, Procter and Gamble, Publicis, Cemex and Diageo that ‘humanistic values and atten-
tion to societal needs are a starting point for smart strategy in the global information age’. In 
particular, ‘the leaders of a vanguard company espouse positive values and encourage their 
employees to embrace and act on them’. Social purpose creates strategic advantages, but only 
if those social commitments have an economic logic that attracts resources to the firm ( Moss 
Kanter, 2009 ). The Moss Kanter concept of a ‘vanguard company’ reaches for a post-CSR 
setting of successful businesses sustained by moral purpose as well as economic achievement. 
In 2010, Paul Polman, chief executive of Unilever, outlined his company’s ‘sustainable 
living plan’ to City investors. His commitment to sustainability and a new type of business 
led to the statement: 
Unilever has been around for 100-plus years. We want to be around for several hundred 
more years. So if you buy into this long-term value-creation model, which is equitable, 
which is shared, which is sustainable, then come and invest with us. If you don’t buy into 
this, I respect you as a human being, but don’t put your money in our company. 
 (Skapinker, 2010)
This is a very strong statement for a chief executive to make to investors, which under-
lines his determination to combine commercial and social goals. Nonetheless, some inves-
tors are nervous that Mr Polman’s focus on sustainability and climate and social issues may 
be a distraction from strategy and performance ( Daneshkhu, 2015 ). However, the success 
of ‘purpose-driven’ firms such as Patagonia and the like, across many business sectors, 
suggests that a large body of customers at least are very enthusiastic about such messages. 
Nonetheless, there is wide recognition that firms face choices in their responsiveness to 
social responsibility (see section 17.7 ). This background provides the basis for examining 
the linkages between CSR and competitive advantage and strategic positioning in the mar-
ketplace, in ways that have not been fully recognised in earlier stages of the consideration 
of CSR initiatives. In particular, we distinguish between CSR as a defence against attacks 
that can undermine competitive position, and as a strategy that can provide new business 
opportunities. Prior to making that distinction, it is important to note that there are poten-
tial downsides to the innovation of CSR initiatives in companies.
17.4 
The other side of corporate social responsibility 
initiatives 
It is important that well-meant enthusiasm for combining social and commercial goals for 
the greater good of society and the business should not blind executives to the fact that 
there are vocal critics of CSR initiatives, and that not all CSR efforts have achieved their 
intended beneficial effects. There are risks to companies in CSR initiatives that misfire, as 
summarised in Figure 17.2 .

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