A. How did you find this company? What are the main facts about its activities?
I found this company looking for Patagonia, before knowing their environmental agenda I used to buy few pieces of outfit from this company just because I liked them but not too much because of its price. Since I’ve looked at the environmental agenda of the company I have decided to stop buying from some really big brands and started buying less but trying to be more responsible with the brands I picked, because it is better to have a long lasting polo or trousers but that are responsible with the environment than 10 trousers that will last only half a year.
Timberland is a company in the outfit market. The name of Timberland is synonymous with both quality and dependability, with store locations in the United States and in countries around the world. The company was founded in 1978. Its headquarters are located in Stratham, New Hampshire. Both men’s and women’s clothing and accessories were added to the Timberland product mix in 1988. The company opened its first specialty stores soon after: on Newbury Street in Boston, on Madison Avenue in New York, and on New Bond Street in London. The activities of the company are oriented to create fashionable outfit in a sustainable manner. To do this hey improve in every part of the value chain, not only they have financial objectives but also environmental objectives that are set for 2015.
B. What are the Ethical challenges this company is addressing?
One of the main challenges is how to be profitable when you have to compete with other companies in the sector that do not operate under any type of environmentalist agenda. For them this leads to better economic indicator in raw materials and even in labor.
Also the inevitable use of resources that all companies have is a problem. Due to the fact that they need to use ways to deliver their products or even take their products from the countries where they are done to the main locations where they are sold, this methods of delivery use to use a lot of fuel. If we look at the results for their greenhouse house emissions the main reason why they have increased is because of thetransportation of goods via water. This is unavoidable because a company needs to transport their goods to the locations, even though this a policy of a more located production near the distribution centers would improve a lot the results of use of fuel in transportation but this would mean to renounce to a lot of profits because the cost of goods sold would increase.
C. What makes this company really inspiring to you and why would you trust it?
This company is a result of what I like to call “good capitalism”. In my opinion capitalism is not a good or bad thing, like many other things in life. Imagine that we would be able to calculate the output of greenhouse emissions and the effect of each product we buy in costs for society. If this would happen we would be able to see which products are more and less expensive in the end, for example we have two products; product A costs 32 $ and product B has a cost of 20$ but a social cost of 20$ due to pollution, in this case informed customers would choose the first product due to a reduced cost. If the market would start operating like this companies would strive to provide more social cost free products, this would only happen if the customers are encouraged and aware of what social cost means.
Timberland is in a market where they are competing with companies like Patagonia, The North Face, etc. Most of this companies also have an environmental agenda and each company tries to give more and more reasons and proof to support that they are the most environmental-friendly company, this is a clear case of increase of competition in the market that leads to a decrease in price (social price) for the customers.
The reason I trust this company is because if they would not be environmental-friendly and if at some point it would be discovered that they are polluting I am sure many heads would roll in the company because one of their main core advantages would disappear and the other companies would take their share of the market in the environmental-friendly market.
I think that the main problem of the capitalist system is that requires a total asymmetry of information free society; customers must know what the companies are doing and the components of the price that they are paying, otherwise the externalities of the agents end up screwing the whole system. If governments were more eager to develop different measurements for this costs and force companies to keep a track of their environmental and social footprint we would be much more eager to pay more for some products in order to keep our planet in a better shape.
D. What are the possible challenges facing the company in the future and how do you think this company may improve?
I think their main challenge is to keep in the same track as the sales grow. May analyst say that being an environmental-friendly company requires you to be in a niche position forever. Their main objective in this sense is to make aware people more and more about how dangerous is for them to harm the environment. Hopefully we are in a situation in which all the companies in his sector will move and push in order to make more people aware of it. Patagonia, North Face and other companies that share the same core advantage will work together to make their market bigger and this will led to increase in market size each year. Maybe will not lead to increase in market share for all the agents in the market but for sure will lead to increase in revenue.
Another factor that these companies must have in mind is the problem of being public. You have to make a very clear statement in your mission about your environmental mission, otherwise shareholders will be led to buy your shares only by and economical interest and might try to change the policies of the company in order to achieve higher profits.