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How strategic is your corporate social responsibility? - Part 3 of 5

11/5/2014

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In our second installment of this series, we discovered how differentiation is a key element of creating a strong, competitive advantage. We also saw how corporate social responsibility (CSR) can be one of those ways to differentiate your operational activities.

For today's examination of CSR into Michael E. Porter's "What is Strategy?" we talk about trade-offs. New opportunities are all around you and the opportunity cost can be too great to say no to. It is necessary that you do ensure you are picking the opportunities that best align with your future vision.

Trade-offs are important in strategy because they help prevent competitors from trying to copy some or all of what your business does. If they did try to copy your business and there were not any trade-offs, all businesses would try to copy each other. With trade-offs they have to take a bigger leap to try and copy you - and they may likely fail because the activity you are doing may not align with their brand as well..

In your CSR activities, it may be easy to set up a quick and easy event that can help any charity - like a monthly campaign where portions of your sales go to a new charity each month. However, if you can focus on a few charities that relate to your organization's strategy, the impact will be bigger for those organizations. You end up trading-off being able to help everyone a little bit for helping a few charities more significantly.
Part One:
Part Two:
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How strategic is your corporate social responsibility? - Part 2 of 5

10/22/2014

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In part one of our series, we learned the importance of either doing different activities from competitors - or - doing the same activities but in a different way. You may have seen some activities your business does better or more efficiently than competitors. In the article by Porter, he uses examples of how Southwest and Ikea operate differently from their competitors in their respective industries which gives them a unique and difficult-to-replicate position. 

To use an example of a company using CSR in a strategic manner, lets look at Swedish global hygiene and forest products company SCA (Svenska Cellulosa Aktiebolaget).  SCA owns Europe's largest private forest which has become one of their main resources and they have been recognized for their highly responsible forestry practices. Due to this, SCA has more effective operations in comparison to their competitors in this capacity. Although it may be difficult for SCA competitors to replicate and purchase 2.6 million hectares of forest near their production facilities, owning the forest is not a strategy it only moves SCA closer to the productivity frontier. What makes it a sustainable competitive advantage is incorporating it into several other tactics within the company to create a strategic position.

Porter claims that strategic positioning uses three tactics: variety-based positioning, needs-based positioning, and access-based positioning. Lets see what these tactics are and how you can use it when for your CSR program.
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