16. By investing in green technology and practices and becoming a more socially responsible organization Tesco may benefit in a number of ways:
• Improved corporate image and possible creation of a USP or competitive advantage as a result. This is important given the criticism of Tesco’s practices by the pressure group described in the case. Tesco can find a unique position of a socially responsible firm who provided good quality/value for money products
• Improved image may attract green customers. Revenue can increase as well as profit
• A possible increase in the price of its products despite the intense competition
• A larger market ...view middle of the document...
A unique/differentiated market positioning as a socially responsible org offering good value for money products may not be sustained in the longer term or even in the short term
• The implementation of the practices will require a considerable investment. Profit might fall in the short run
• given the fact that Tesco sources out food overseas this may adversely affect domestic supplies, which might mitigate its attempt to become more socially responsible by being more “green”
• lower profit to be distributed to shareholders in the form of dividends might create some resentment among the non-ethical investors especially given that the profit margin is predicted to level off. Shareholders might sell their shares
• Extra management time might be necessary to implement the suggested practices
• Some training might be required, which might also increase the costs in the short run
• Any other relevant point.
Despite the possible limitations/shortcomings, especially in the short run, it looks as if to reap the benefits in the longer term Tesco has to implement its “green” policies and become a more socially responsible firm. It can therefore be said that to a large extent Tesco will be able to achieve the benefit resulting from positioning itself as a socially responsible firm. However, Tesco must look at the other issues mentioned in the case if it is to become a truly socially responsible organization not just truly “green” one and sustain its position in the longer run.
Credit any substantiated judgment.
N.B. The candidate should refer...