Sonae

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Monday 3 June 2013, by thevenoux

A. The main facts about the activities of the company.

Sonae is a Portuguese conglomerate created in 1959 by Alfonso Pinto Magalhaes. Nodaway, the company is owned and ruled principally by the Portuguese billionaire Belmiro de Azevedo and his family. The entry of Portugal in the European Union in 1986 correspond to a period of high development and growth for Sonae which diversified its activities in various sectors like food retailing, real estate, telecommunication and technology.

We will give examples of facts that make Sonae an ethic company.

Sonae established an environmental policy that basically says that all the business develop-ment of the company has to be based on an « eco-efficient management » which implies reducing the consumption of energy for the company and also to encourage suppliers to do the same. What is interesting in this case is that Sonae doesn’t hesitate to « blackmail » the suppliers to make them eco-friendly. Moreover Sonae organize formations for its employees to make them more concerned about the environment.

Another activity of Sonae was the project “mission smile”, launched in 2003 to respond to the needs in medical furniture’s for pediatric service in public hospital in Portugal. Sonae, threw its supermarkets chains, donated a part of its benefits on children products sales to fundraise the purchase of medical equipments. This resulted in the buying of more than 1500 health care equipment for 31 hospitals.

One other example of the environment protection engagement of Sonae is the participation threw Optimus, its telecommunication branch, to various reforesting actions like in October 2012 when Sonae took part to the plantation of hundreds of trees in a national park in Por-tugal after it was destroyed by a wildfire.

B. The Ethical challenges this company is addressing.

As Sonae is operating in a lot of different industries the company faces different challenges. Here some of the main or generalised challenges the company has to deal with:
Especially now, in a crisis, everybody tries and has to cut costs. Many companies tried to minimize the crisis by cutting costs and therefore reducing quality. In the case of Sonae, they still want to offer high quality food. For them the challenge is how to offer high-quality food, but cut costs in order to still being competitive. An important way to achieve this is to improve efficiency; e.g. Sonae has already implemented the Supplier Portal or the Sonae Producers’ Club to facilitate and support the communication process. It also helps to establish long-term contracts and stable relationships that are getting more and more important for a company.
Another challenge is to find new ways that allow a sustainable growth of the industries So-nae is operating in. This means new partners, new markets or new methods of financing. A possibility could be to find new markets abroad in countries with a better economic situa-tion. The challenge here could be to find a market that really contributes to the sustainable growth of the company. To find such markets they must be analysed in a long term perspec-tive. However, Sonae also has to be able to increasingly adapt faster and better to the needs of a market.
Furthermore Sonae has now to work even more on customer relationships, e.g. by enhancing the customer services and facilities. To maintain the loyalty of the customers, Sonae has to think about new values or reasons why customers should buy their products.

C. What makes you believe this company is really ethical and why you trust it?

Voted in 2013 by Ethisphere Institute and publicized globally through companies such as Forbes, SONAE is one among those companies who are recognized for its ethical practices. Its mission statement, which emphasizes social responsibility, claiming they improve the communities in which they operate and takes into account environmental concerns and pol-icies.
This company, which products range from food to financial investments, contains all types of products; however, strives for transparent business and governance practice. Transparency though has only a soft connotation is remarkably imperative to ethical contribution of a company. The lack of has caused multiple companies to become berated and immortally reprimanded by the world. This transparency that SONAE produces is both conclusive and meticulous and is available to the public to help stakeholders, government agencies, and consumers to see the company’s plans. In this report, as I quote verbatim, is to inform “about the strategy, management system, performance and economic, social and environ-mental commitments of its activity.” (Sustainability Report, 2011)
Aside from transparency, SONAE also puts an emphasis on the environment and sustainabil-ity. SONAE Sierra, a sector of SONAE, has even gone so far as to implement the Planet Sierra Tenant Award. Indubitably bold, this award is given to 15 Tenants with the best environmen-tal practice. Also, in part of the Sustainability report, SONAE supplier chain is held in ac-countable the quality and work practices. In accordance with the SONAE Environmental Poli-cy, suppliers have checks and regulations regarding to the environment, working conditions, human rights, safety and quality.
This company is first Portuguese company to be part of the most ethical company in the world and has been on this ranking for three years now. Aside from the awards and recogni-tion, I believe that this company is ethical and I trust it. The praised 160+ page sustainability report; undeniably depict the transparent nature of this company. Touching upon business practices, environmental pursuits, company activities, and production and supply chain, it is evident that the company has nothing to hide.

D.The possible challenges facing the company in the future and how you think this company may improve.

The challenges facing the company in the future are focused in the crisis that is affecting the Mediterranean countries. More specifically the decreasing demand due to the restricted policies implemented for the Iberian governments. This has affected the company because an important part of their businesses are located in Portugal and Spain. To counteract this diminution of incomes from southern Europe the company is diversifying and investing in growing markets as Brazil to compensate and balance their accounts. Because of this de-creasing demand Sonae is closing some plants in Spain, Portugal, France etc. and opening new ones in growing markets. It is logical movement as a business management to search new opportunities and go where there are growing markets, the key here is try not to close and reduce the firings in crisis countries and maintain as much as possible the plants open thinking in a long run.

Bibliography

https://en.wikipedia.org/wiki/Sonae
http://www.sonae.pt/en/
http://www.cincodias.com/articulo/empresas/sonae-industria-quiere-cerrar-fabrica-lerida/20121204cdscdsemp_21/
http://www.estrategiasdeinversion.com/noticias/sonae-planea-cerrar-planta-sudafrica

Sonae first quarter results 2013

Location: Maia (Portugal)

Sector: Wholesale and retail trade

Official website: http://www.sonae.pt/pt/

Key figures:

Annual Revenue: 5.379 million euros
Annual Profit: 169 million euros
Number of Employees: 43270 (end of 2010)
Countries of operations: 66 countries (mainly Europe, Australia, South Africa, USA, Mexico, Chile, Brazil, Russia, Japan, China …)
Number of Active Loyalty Cards (Sonae MC): 3,2 million (3 out of 4 Portuguese households)

Nbr. visits: 462