Examine as to whether the consumers will be willing to pay increased prices to ensure that their products are sustainably produced and packaged.
Question number 1 : Read the following case study and answer the underlined question.
The retail giant Walmart is trying to compel its suppliers to “go green” as part of its efforts to build a more environmentally sustainable global supply chain. As it did with promoting EDI and RFIDs in the early stages of those technologies, Walmart is leading the curve with its sustainability efforts. On an occasion, Walmart’s CEO, Lee Scott, told a large gathering in China, “A company that cheats on overtime and on the age of its labor, that dumps its scraps and chemicals into our rivers, that does not pay its taxes or honor its contracts—will ultimately cheat on the quality of its products. And cheating on the quality of products is the same as cheating on customers. We will not tolerate that at Walmart.” As part of this initiative, Walmart will survey its 100,000 global suppliers and ultimately create a “sustainability product index,” which will allow the company to evaluate suppliers on their sustainability efforts. Suppliers anxious to keep Walmart as a customer will be motivated to improve their rating on the sustainability index. Some experts think Walmart can change the business climate on sustainability. According to Harvard Professor Rosabeth Moss Kanter, Walmart’s determination to use its considerable influence to raise the standards for environmental sustainability “shows that a single company using its unique clout can accelerate public action to reduce greenhouse gases and reverse climate change.” Walmart’s new initiative translates into a new burden on suppliers. By some estimates, the company’s efforts to improve sustainability could increase the cost of products by 1–3 percent, due, in part, to new requirements that suppliers label products with a green index. However, these costs may be offset if the suppliers, as part of their efforts to reduce their impact on the environment, can also improve their supply chain efficiency.
Examine as to whether the consumers will be willing to pay increased prices to ensure that their products are sustainably produced and packaged.
Length of the answer: Between 225 -250words
Marks distribution of the question is as follows:
Originality: 2
Critical examination of the expected consumers’ response: 6
Contextual understanding of the case study: 1
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