Paul Rice knew that Fair Trade could do more, much more. While the model had benefited approximately 10 million people in developing countries, they were a small percentage of the 2 billion people worldwide who lived on less than $2 day. Fair Trade was not charity. It was a certification model that had started around coffee and ensured that money flowed back to the people who grew the coffee, giving them a "Fair Trade" price. As president and CEO of Fair Trade USA (FT USA), the leading third-party certifier of Fair Trade products in the United States, Rice had reason to be proud. Since its founding in 1998, the nonprofit had grown Fair Trade CertifiedTM coffee from 0 to 5 percent of the U.S. coffee market. Fair Trade coffee had made tremendous inroads with large roasters such as Starbucks and Green Mountain as well as mainstream brands like Dunkin' Donuts. Rice, however, was not satisfied with 5 percent of the U.S. coffee market. He wanted to take Fair Trade to scale-widespread adoption in terms of volume, market share, consumer awareness, and impact for farmers. And Rice was confident that he knew how to get there. This case explores FT USA's market based approach and philosophy for increasing the reach and impact of Fair Trade. It reviews the concept of Fair Trade and the three pillars of the "Fair Trade for All" strategy: expand Fair Trade to include certification for large coffee growing estates and independent smaller farmers, invest in cooperatives to make them more competitive, and increase consumer awareness. The case highlights the controversy that ensued from FT USA's 2012 split from the international certifying body and why Rice believes that this was the right decision.
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Case Analysis of Fair Trade USA: Innovating for Impact
Fair Trade USA: Innovating for Impact is a Harvard Business (HBR) Case Study on Strategy & Execution , Texas Business School provides HBR case study assignment help for just $9. Texas Business School(TBS) case study solution is based on HBR Case Study Method framework, TBS expertise & global insights. Fair Trade USA: Innovating for Impact is designed and drafted in a manner to allow the HBR case study reader to analyze a real-world problem by putting reader into the position of the decision maker. Fair Trade USA: Innovating for Impact case study will help professionals, MBA, EMBA, and leaders to develop a broad and clear understanding of casecategory challenges. Fair Trade USA: Innovating for Impact will also provide insight into areas such as – wordlist , strategy, leadership, sales and marketing, and negotiations.
Case Study Solutions Background Work
Fair Trade USA: Innovating for Impact
case study solution
is focused on solving the strategic and operational challenges the protagonist of the case is facing. The challenges involve – evaluation of strategic options, key role of Strategy & Execution, leadership qualities of the protagonist, and dynamics of the external environment. The challenge in front of the protagonist, of Fair Trade USA: Innovating for Impact, is to not only build a competitive position of the organization but also to sustain it over a period of time.
Strategic Management Tools Used in Case Study Solution
The Fair Trade USA: Innovating for Impact case study solution requires the MBA, EMBA, executive, professional to have a deep understanding of various strategic management tools such as SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.
Texas Business School Approach to Strategy & Execution Solutions
In the Texas Business School, Fair Trade USA: Innovating for Impact case study solution – following strategic tools are used - SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.
We have additionally used the concept of supply chain management and leadership framework to build a comprehensive case study solution for the case – Fair Trade USA: Innovating for Impact
Step 1 – Problem Identification of Fair Trade USA: Innovating for Impact - Harvard Business School Case Study
The first step to solve HBR Fair Trade USA: Innovating for Impact case study solution is to identify the problem present in the case. The problem statement of the case is provided in the beginning of the case where the protagonist is contemplating various options in the face of numerous challenges that Fair Trade is facing right now. Even though the problem statement is essentially – “Strategy & Execution” challenge but it has impacted by others factors such as communication in the organization, uncertainty in the external environment, leadership in Fair Trade, style of leadership and organization structure, marketing and sales, organizational behavior, strategy, internal politics, stakeholders priorities and more.
Step 2 – External Environment Analysis
Texas Business School approach of case study analysis – Conclusion, Reasons, Evidences - provides a framework to analyze every HBR case study. It requires conducting robust external environmental analysis to decipher evidences for the reasons presented in the Fair Trade USA: Innovating for Impact.
The external environment analysis of Fair Trade USA: Innovating for Impact will ensure that we are keeping a tab on the macro-environment factors that are directly and indirectly impacting the business of the firm.
What is PESTEL Analysis? Briefly Explained
PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in Fair Trade USA: Innovating for Impact case study. PESTEL analysis of " Fair Trade USA: Innovating for Impact" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.
How to do PESTEL / PEST / STEP Analysis? What are the components of PESTEL Analysis?
As mentioned above PESTEL Analysis has six elements – political, economic, social, technological, environmental, and legal. All the six elements are explained in context with Fair Trade USA: Innovating for Impact macro-environment and how it impacts the businesses of the firm.
How to do PESTEL Analysis for Fair Trade USA: Innovating for Impact
To do comprehensive PESTEL analysis of case study – Fair Trade USA: Innovating for Impact , we have researched numerous components under the six factors of PESTEL analysis.
Political Factors that Impact Fair Trade USA: Innovating for Impact
Political factors impact seven key decision making areas – economic environment, socio-cultural environment, rate of innovation & investment in research & development, environmental laws, legal requirements, and acceptance of new technologies.
Policy Making Impact on Fair Trade USA: Innovating for Impact
Government policies have significant impact on the business environment of any country. The firm in “ Fair Trade USA: Innovating for Impact ” needs to navigate these policy decisions to create either an edge for itself or reduce the negative impact of the policy as far as possible.
Data safety laws – The countries in which Fair Trade is operating, firms are required to store customer data within the premises of the country. Fair Trade needs to restructure its IT policies to accommodate these changes. In the EU countries, firms are required to make special provision for privacy issues and other laws.
Competition Regulations – Numerous countries have strong competition laws both regarding the monopoly conditions and day to day fair business practices. Fair Trade USA: Innovating for Impact has numerous instances where the competition regulations aspects can be scrutinized.
Import restrictions on products – Before entering the new market, Fair Trade in case study Fair Trade USA: Innovating for Impact" should look into the import restrictions that may be present in the prospective market.
Export restrictions on products – Apart from direct product export restrictions in field of technology and agriculture, a number of countries also have capital controls. Fair Trade in case study “ Fair Trade USA: Innovating for Impact ” should look into these export restrictions policies.
Foreign Direct Investment Policies – Government policies favors local companies over international policies, Fair Trade in case study “ Fair Trade USA: Innovating for Impact ” should understand in minute details regarding the Foreign Direct Investment policies of the prospective market.
Taxation & Regulation Impact on Fair Trade USA: Innovating for Impact
Corporate Taxes – The rate of taxes is often used by governments to lure foreign direct investments or increase domestic investment in a certain sector. Corporate taxation can be divided into two categories – taxes on profits and taxes on operations. Taxes on profits number is important for companies that already have a sustainable business model, while taxes on operations is far more significant for companies that are looking to set up new plants or operations.
Tariffs – Chekout how much tariffs the firm needs to pay in the “ Fair Trade USA: Innovating for Impact ” case study. The level of tariffs will determine the viability of the business model that the firm is contemplating. If the tariffs are high then it will be extremely difficult to compete with the local competitors. But if the tariffs are between 5-10% then Fair Trade can compete against other competitors.
Government Scheme & Subsidies Impact on Fair Trade USA: Innovating for Impact
Research and Development Subsidies and Policies – Governments often provide tax breaks and other incentives for companies to innovate in various sectors of priority. Managers at Fair Trade USA: Innovating for Impact case study have to assess whether their business can benefit from such government assistance and subsidies.
Consumer protection – Different countries have different consumer protection laws. Managers need to clarify not only the consumer protection laws in advance but also legal implications if the firm fails to meet any of them.
Political System & Stability, and its Impact on Fair Trade USA: Innovating for Impact
Political System and Its Implications – Different political systems have different approach to free market and entrepreneurship. Managers need to assess these factors even before entering the market.
Freedom of Press is critical for fair trade and transparency. Countries where freedom of press is not prevalent there are high chances of both political and commercial corruption.
Corruption level – Fair Trade needs to assess the level of corruptions both at the official level and at the market level, even before entering a new market. To tackle the menace of corruption – a firm should have a clear SOP that provides managers at each level what to do when they encounter instances of either systematic corruption or bureaucrats looking to take bribes from the firm.
Independence of judiciary – It is critical for fair business practices. If a country doesn’t have independent judiciary then there is no point entry into such a country for business.
Government attitude towards trade unions – Different political systems and government have different attitude towards trade unions and collective bargaining. The firm needs to assess – its comfort dealing with the unions and regulations regarding unions in a given market or industry. If both are on the same page then it makes sense to enter, otherwise it doesn’t.
Economic Factors that Impact Fair Trade USA: Innovating for Impact
Social Factors that Impact Fair Trade USA: Innovating for Impact
Technological Factors that Impact Fair Trade USA: Innovating for Impact
Environmental Factors that Impact Fair Trade USA: Innovating for Impact
Legal Factors that Impact Fair Trade USA: Innovating for Impact
Step 3 – Industry Specific Analysis
What is Porter Five Forces Analysis
PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in Fair Trade USA: Innovating for Impact case study. PESTEL analysis of " Fair Trade USA: Innovating for Impact" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.
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