Creating Shared Value Paper Example

The concept of creating shared value is a term that refers to the idea that businesses must do coordinated things to achieve its long-term success. It serves to create economic value for both the business and society at large. This term is close to corporate social responsibility (CSR) but differs in that creating social value (CSV) focuses on creating value for the competitiveness of the organization while corporate social responsibility focuses on the responsibility of the organization towards other shareholders. While CSR capitalizes on cost, CSV majors its focuses on opportunities the business has, marketability, and the profitability of the organization (Porter, 2019. Nestle is a company which elaborates the concept of creating social value. Fortune magazine is an example of a company which demonstrates shared value as its goals are aimed towards connecting positively with the market. It was motivated by other companies such as Unilever and Nestle which were in its listings of top worldwide companies which aim at creating share value. It was after that that Fortune was challenged and motivated to be among the companies which change both the local and worldwide society.

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Yara, a company based in the production of fertilizers faces several challenges which made the brand embrace the creation of social value. There was stiff competition from other companies that made them look for different ways to remain relevant to the industry and to maintain their customers. The other challenges included limited Agro-Dealer capacity where they did not have adequate storage facilities. The other problem Yara faced was the low rates of fertilizers used. Agriculture was emerging as one of the leading sectors in the economy of Africa, and the company faced the challenge of capacity for their products.

To curb these challenges, Yara used the CSV concept in various ways. One of the things they did is by engaging farmers, supporting active agricultural development and agricultural infrastructure. This collaboration involved required multiple actors and not the company itself. Therefore, they sought to expand their capacity by creating more warehouses in various regions to utilize the opportunity. The other strategy that Yara used was partnering with companies such as the AgDecCo and the Agricultural Council Corridors. The aim was to create stable markets and enable farmers harvests to increase and also quality products. The company also collaborated with the government in the execution of its creation of social value by enhancing the farmer's livelihoods. Yara provides the farmers with jobs hence making them get an income. The company identified two potential regions that they capitalized in to increase their capacity. This was to help them grow their market share aimed towards profitability and growth within the sector.

Another thing the company did was expanding its warehouses in various countries to accommodate the massive demand for the fertilizers. The company provided linked infrastructure to the small-scale farmers hence providing better access to the market. It gained economic progress in rural areas as well as increased sales. This indicates that the shared value initiative can lead to the establishment of successful businesses. Laid down operating practices and policies enhanced the competitiveness of Yara while advancing the social and economic features in the area of operation. The company trained local farmers on Agro-based knowledge about their products. The initiative Yara procedure reduced food insecurity incredibly and has sustained agricultural productivity. The N2 catalyst technology used by the company reduces nitrous oxide from the nitric acid plants. The partnerships with other organizations have enabled the promotion of sustainable agriculture globally. Generally, the expansion in agriculture and the associated difficulties it faced mainly made Yara introduce their CSV. They look forward to taking advantage of the expanding agriculture and providing reliable products to their customers and in return, increasing its market share.

Conclusion

Nestle is a local Emirati company which mainly focuses on creating shared value than any other aspect. The company depicts improved efficient performance indicators. It primarily aims at producing high-quality dairy products, to build its brand and increase profitability (Lopez & Monfort, 2017). Its primary objective is to increase the sales over a vast region with consideration of top-notch quality. Nestle works in hand with the local farmers to teach them some of the technical ways of producing high-quality raw materials. The workers sell the products to Nestle at a subsidized price in return. Nestle has an outline of commitments which lead it to create share value in the Middle East. The company reports that it focuses on nutrition, wellness, and health and they consider environmental sustainability as well. They also ensure responsible sourcing of the factors involved in the production of goods. Nestle is focused on meeting their duties and contributing to the addressing of issues facing the local society. Their nutrition standards primarily consider nurturing healthier generations. Their commitments also allow other partners and stakeholders to hold them accountable to their promises and give feedback so that they can increase their performances and actions.

References

Murphy, P. E., & Murphy, C. E. (2018). Sustainable Living: Unilever. In Progressive Business Models (pp. 263-286). Palgrave Macmillan, Cham.

Porter, M. E., & Kramer, M. R. (2019). Creating shared value. In Managing sustainable business (pp. 3 Porter, M. E., Krammer, M., Mirrez-Vallejo, J. and Herman, K. (2017). Yara International: Africa Strategy. Harvard Business School, pp.1-24.27-350). Springer, Dordrecht.

Lopez, B., & Monfort, A. (2017). Creating Shared Value in the Context of Sustainability: The Communication Strategy of MNCs. In Corporate Governance and Strategic Decision Making. IntechOpen.