Corporate social responsibility
Second, they pressure companies to think of CARS in generic ways Instead of In the way most appropriate to each firm’s strategy (Porter 2006). Cutbacks experienced Increasing pressure from Its stakeholders to act as a good corporate social citizen while still being profitable.
This Is perceptible In the shift of focus from a shareholder value to stakeholder value. The companies in the new economy are striving at balancing people, environment and profit.
Stakeholders have been progressively recognizing its power and continuously demanding of transparency in organizational communication and expect companies to acknowledge their impact on the society. These societal expectations pressure companies to act responsible with regards to their external as well as internal environment. With this, Cutbacks being a successful global company and made it to the list of Fortune’s “100 Best Companies to Work For” has received a lot of attentions from various stakeholders.
Cutbacks has taken measures on the increasing pressure and have engaged In various CARS Annihilates demonstrated through various communication tools on Its corporate website. II Objectives The objective of this study is to investigate how Cutbacks has succeeded in the equines world with CARS strategy and analyze how Cutbacks utilized various communication tools to express its CARS efforts to specific stakeholder groups, in legit, transparent and persuasive manner. Ill.
Relevant Case Facts and Analysis (SOOT Analysis) Cutbacks Is a major global coffee company recognized as one the most respected brand In the world. It was founded In 1971 by three partners In Cattle’s renowned open-air Pike Place Market and was named after the first mate in Herman Melville Moody DICK, Ana Colane Day Howard consult In BIBB as Loretta AT retail operations Ana marketing.
Cutbacks is now operating nearly 17,000 stores in over 49 countries. Cutbacks locates its stores in high-traffic and high-visibility places that provide an inviting coffee-bar environment and conveniently accessible.
Besides from selling premium coffee, Cutbacks has expanded its product line to include various warm and cold beverages, pastries, salads, breakfast, merchandise like coffee-related accessories and equipment, gift items, books, CDC, etc. Its mission is “to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time” (humpbacks. Com). Cutbacks has incorporated this statement into its overall strategy and is continuously striving at complying with – partly through its engagement in various CARS activities.
Cutbacks’ focal point relates to environment, its employees, suppliers, customers, and its communities. Cutbacks has paid the salary and compensation of its partners (employees) based on hours laws and regulations. Moreover, partners who work more than twenty hours per week are entitled to receive health benefits and to receive stock options, now as Bean Stock. However, in year 2005, the Company spent more on health insurance Han on raw materials required to brew its coffee, yet remained giving benefits package, as it is the key reason of achieving low employee turnover and high productivity.
All partners have been treated with respect and provided with a friendly working environment.
Cutbacks believes that good business has to involve and support communities as well. The company’s policy is that running ethnic business and doing the right thing are keys of the Company’s success. Cutbacks adapted the corporate responsibility paradigm in 2000 when it developed a partnership with Conservation International tit whom Cutbacks created its ethical coffee-sourcing guidelines.
This is in response to growing concern that it will pay a premium for beans grown on environmentally and socially responsible farms which the Company hopes will create positive changes within the global coffee market and eventually result in a fully sustainable coffee production supply chain. Since then, Cutbacks has expanded its CARS partnership with various nonprofit organizations around the globe, as well as it has founded its own Cutbacks Foundation.
Cutbacks coffee purchases are Fair Trade Certified that covers 5% of its total coffee purchases.
Cutbacks Joined with Boon’s Product RED in an effort tot raise money for HIVE and Aids research, and the African Wildlife Foundation and Business for Social Responsibility. The number one guiding principle in Cutbacks’ mission statement was to “provide a great work environment and treat each other with respect and dignity’ and Cutbacks has perennial put emphasis on this principles and it became the foundation of its organization’s culture.
This is evident throughout its corporate website where the company’s CARS activities are integrated into the entire website. Cutbacks executives believe that the experience customers have in their stores should be the same in any country. During the 2008-2009 global recession, Cutbacks seeks to regroup, reviewed its strategy and refocused the brand by upgrading its coffee machine Ana tottering Toots Ana Arles Tort ten Educate-conscious consumer.
Cutbacks refocused on the customer experience as one of the key competitive advantages of the Cutbacks brand.
Cutbacks replaced their old espresso machines with new high-tech to enhance the coffee shop experience and some stores are switching over to Clover Brand single-cup brewing machines so that each customer chives a freshly brewed cup of coffee made to the customer’s specifications Cutbacks’ likewise attempted to respond the global recession by creating a value meal and its became the most popular food offerings at Cutbacks as people continue to be health conscious and took advantage of the opportunity introducing VIA instant coffee since people cut back on their expenditures and many are choosing to brew their own coffee rather than purchase expensive coffee shop creations. In addition, Cutbacks aimed to foster brand loyalty through Cutbacks Card and offered the Pike Place Blend, bold-flavored coffee that brings back its distinctive essentials. After 16 years of expansion, it slowed its global growth plans to refocus on strengthening its brand, satisfying customers, and building consumer loyalty.
Despite of achieving levels of growth, financial success for shareholders, Cutbacks is still put at risk of criticism for its ability to strike the competition such as putting other coffee shops out of business due to its clustering strategy and issues on fair-trade coffee, generically modified milk and slow to increase the share of Fair-Trade products purchases marred to its competitors. In spite of this, Cutbacks holds at sustaining and maintaining high ethical standards, being one of the best-known brands in the world.
As of its fiscal year ended 2012, Cutbacks financial reflected the strength of their global business model. Total net revenues increased 14% to $13. Billion in fiscal 2012 compared to $1 1. 7 billion in fiscal 2011, driven by global comparable store sales growth of 7% and a 50% increase in Channel Development revenue (I. E.
Packaged coffee and tea). However, high commodity costs continued to be a significant drag on operating margin but operating income increased $61 million to $349 million for fiscal 2012. Cutbacks is expecting an increase in capital expenditures in fiscal 2013 reflecting additional store renovations, new store growth and manufacturing capacity. Struck Annual Financial Report FYI 2012 In the last five years, Cutbacks had a major dip of its stock price due to the economic crisis throughout 2008-2009.
It is notable that the Company was able to overcome the loss and continue to keep its stock price high and continue to expand and succeed.
Struck has several strengths in the coffee industry, being one of the most agonized and respected brands in the world, known for its high quality products, consumer friendly environment and able to rapidly expand domestically and internationally. In contrast, economic conditions affects Cutbacks high price since it is dependent upon consumer discretionary spending. Consumers may have less money for discretionary purchases as result of Job losses, foreclosures, bankruptcies, increased fuel and energy cost, higher taxes, etc.
In addition, Cutbacks financial performance is highly dependent on America’s operating segment comprising 75% of consternate total net revenues In 2012. IT revenue trends classes, It Is moss probable that the operating cash flows will be affected, likewise the funding of international expansion growth and earnings of shareholders.
The international market is the main source of opportunity for Cutbacks as a company. In emerging economies where there are growing upper and middle classes that want to spend money on specialty coffee, such as Brazil which is set to be rising largest coffee consumer in the world and India which is starting to embrace the coffee industry.
Cutbacks has a lot of growth potential with all of the opportunities that await them n the years ahead. A major threat that Cutbacks has to face is completion, of which McDonald’s is a rising competitor, however as an established specialty coffee company, this would be easier for Cutbacks than for new market entrants. Overall, Cutbacks remains to be competitive as it has a unique environment and atmosphere that cannot be copied by competitors.
It would be important for Cutbacks to take advantage of the opportunities while preserving and leveraging the value of its brand across all channels.