Supplier’s Strategy of Corporate Responsibility (CR) Peter Zhou

Agenda The Evolution of Global CR Developing a CR Strategy CR Strategies Case Study The Point of View of 3 rd Party

The Evolution of Global CR

Business Objectives and CR “ The business of business is business ” A company ’ s role is to make money “ In a free society...there is one and only one social responsibility of business - to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game. ” - Milton Friedman 1970 A Company ’ s role: Make money for the owners at cost of community and stakeholders? Make money for the society and bring benefits to community and stakeholders?

CSR is about corporate actions beyond compliance, undertaken on the basis of a business case. From peripheral activity to business imperative. From ad-hoc contributions to strategic approach to building community partnership. CSR is a set of mechanisms for aligning corporate behavior and objectives with the wider interests of society. CR as an integral part of long term business strategy. Business Objectives and CR

The Evolution of Global CR

Enterprise Management Trend Consumer Needs Propel the Development of Enterprise Management Production Mgmt EHS Environment Mgmt Quality Mgmt Capacity Quality Environ- ment Safety Social Responsibility Mgmt Society

Developing a CR Strategy

Steps to Develop CR Strategy Analyze the market and the industry Risk Assessment SWOT analysis Value Chain Analysis Adjust CR strategy and programs to be operational, systemized, review and assessment Redesign organization and responsibility

Major Corporate Stakeholders

Analyze Market & Environment CR Strategy Business Value Chain Raw Material Stakeholders Stockholders Clients Customers Employees Local Community Process Distributi on Marketin g & Sales Environment Employment Education Poverty ・・・ Social Issues WhomWhat Why How Service

Risk Assessment Focus areas: Working and living conditions Labour and environmental practices Health and safety Environmental impact Local laws and regulations Stakeholders concerns Business Goals Risk Assessment Mitigation/ CR activities Licence to operate Do no harm Do good Manage indirect effects

SWOT Analysis

Value Chain Analysis

D Delivery Q Quality P Price Five criteria of customer demand R Corporate Responsibility R Corporate Responsibility Customer Demand P Product

Strategy: Solving Business Issues by CR Suffered by the price competition recently Pay attention to CR and change the existing area of competition Can not lower in cost any more Pay attention to CR and it is possible to lower in cost Need to find new markets but have no clue Pay attention to CR and find new marketing opportunities →Make use of outer resources from the CR perspective → Increase the additional value from the CR perspective →Discover marketing opportunities from the CR perspective

Discover Market Opportunities Existing Customer Segment Existing Customer Needs Social Customer Needs Social Customer Segment Existing Market New market opportunities

Staying One Step Ahead Staying one step ahead than: Government’s requirement to obtain biz license; Customer’s requirements to obtain biz orders; Competitor to win industry leadership; Employee’s requirements to retain human resources; Community’s requirement to be an admired citizen Innovative/positive/proactive/preventive/partnershi p approaches

Improvement Opportunities Awareness and understanding Lean Production system/productivity Labor relations/communications Energy efficiency/saving Purchasing/shipping planning Hiring planning Employee retention Worker welfare Environmental, Health and safety Management systems

Environmental Programs Provide energy efficient products (Energy Star). Minimize product packaging material. Maximize eco-friendly packaging materials. Utilize eco-friendly product materials. Minimize Product Transportation requirement. Adopt environment friendly manufacturing and packing processes. Support Product Recycling Efforts.

HKWHC, a NGO from HK– Experience Sharing Session (April,2008)

Thank You!

Tea Break See you in 30 minutes