In recent years the concept of shared value has gained significant traction in the international business development community. As we have highlighted on previous posts, innovative companies such as IHG and Coca-Cola have implemented shared value initiatives in emerging markets and have boosted economic performance while creating quantitative social outcomes that benefit local communities. As the concept of shared value moves from an early adopter phase to mainstream acceptance, and corporations begin the process of integrating corporate philanthropy into their day to day business operations, several key issues should be addressed.
As illustrated by the Coca-Cola Coletivo initiative (highlighted in our September 30 newsletter), innovating on a platform of ‘good’ to create tangible social impact and profitable financial returns in a competitive context is being adopted by companies with the purpose of gaining a first-mover advantage. Coca Cola’s selection of youth unemployment among recent high school graduates is an ‘outside-the-box’ social issue to identify that requires an innovative approach to structure a business initiative on.
While creating strategy on youth unemployment is highly complex and differentiates a company from the competition, how does a company innovate on a social issue that is directly linked to a company’s business model and already generates a great deal of publicity?
How does a company innovate on a social issue that is directly linked to a company’s business model and already generates a great deal of publicity?
In our last article on shared value on July 23, 2013, we discussed how innovative companies are gaining a defendable competitive advantage while simultaneously creating tangible social benefit by using their ‘doing good’ platforms (CSR, philanthropy, etc.) in a strategic context. This week, we will focus our attention on Coca Cola’s Coletivo initiative in Brazil.
In this case study, we examine how Coca-Cola strategically collaborates with a local Brazilian NGO as a ‘distribution partner’ on educating and training low-income youth with the objective of reducing unemployment among low-income youth while simultaneously increasing product sales.
For those not familiar with the rapidly evolving business strategy concept of Creating Shared Value, it can be best defined as an approach by which an organization creates economic returns by developing solutions to solve social problems. Multinationals (MNCs) such as Coca-Cola, Nestle, Intel, Intercontinental Hotels Group & Nova Nordisk are embedding shared value into their global business platforms and demonstrating measured impact both to the bottom line and community. Meanwhile, proactive nonprofits are quickly identifying new impact measurements and funding opportunities to evolve with the change.