The general definition of a tipping point refers to the discontinuities in the relationship between present conditions and the future states of a system. This refers to the changing circumstances in a particular field that usually cause a dramatic shift in the normal operation of the business in that field. It leads to a discontinuous jump in the state of the market at some future time. Tipping points are significant in a retail industry as they are used to determine the sustainability of a given business. Particularly in the retail business, tipping points help in achieving sustainability through the incorporation of new strategies, operations, workforce engagement, and connection to consumers and communities. The retail business is evolving to meet the changing needs of consumers and communities, and thus the balance between sustainability and adopting new strategies for customer satisfaction provides a unique tipping point. This situation is analyzed in the Patagonia case.
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The Patagonia Company had developed to become a well known leader of environmentally responsible business. It had maintained an annual growth rate of 6% in net sales, it donated 1% of its revenues to environmental causes, provided in-kind donations to environmental groups, and consequently invested thousands of dollars into reducing the environmental impact of its production process. However, the tipping point came when it had to wrestle with the challenge of implementing a new, radical environmental initiative that was at the forefront of their agenda (Lamberson and Scott, 2012). The new and radical environmental initiative could threaten their delicate balancing act between committing to sustainability while achieving 10% revenue growth in sales for the next five years. However, the initiative could have a positive impact as it would expand existing practices such as repairing and recycling old garments, while establishing a swap market of used products for its customers. Most radically, the initiative would include telling its customers to buy less and think twice before they purchased a garment. This is a classic example of a tipping point.
Therefore, in order to achieve sustainability, retail businesses have formulated different trends through which they employ in the conduct of the business. Firstly, they have started working a cross sectors in order to achieve sustainability goals. This is where the retailers reach out to non-profits, academics and governments, as wells as to their suppliers, consumers, investors and donors and communities which provide diverse perspectives that can accelerate sustainable innovation. Secondly, retail businesses turn from sustainability as a cost and risk reduction measure to an opportunity for business growth. Thirdly, the businesses have started developing systems for continuous improvements; the retailers build sustainability through the development of management, measurement, and IT systems for continuous improvements Forest (Reinhardt, Raman, and Hyun 2010). Finally, the businesses also foster transparency in operation and in the supply chain. This is driven by the need for public disclosure fostered through opportunities for risk mitigation, coupled with increased public scrutiny.
Retailers cannot achieve sustainability without having good regard to products which they supply in terms of how they are they manufactured, packaged, transported, consumed and consequently disposed off. The products thus play a critical role throughout their lifecycle from the design and manufacture, which facilitates the ecological performance of a product and thus determining the sustainability of the retail business through demand. The packaging of the product occupies a critical position between consumers and product supply chains and protects and maintains goods during shipping, on retail shelves, and before consumers use. As in regards to transportation, a more effective transportation system plays a critical role in the retail company’s efforts to achieving sustainability. Critically a product’s use and disposal is pivotal to the image of the company. All these issues are significant in the process of achieving sustainability of the business as they provide crucial tipping points that could change the cause of the business for the better or worse (RILA 2012).
Critical to the issue of attaining sustainability is the company’s integration of the consumers and the community at the large. Retail businesses form a vital part of the community and they play a central role in the development and the growth of the given community. How the business handles the consumers and community could be critical to its survival. By integrating the community, the business will thrive through the engagement between the retailers and their external stakeholders. Consumers usually want to be given sufficient information about the products they buy. They usually want to find out how the products will affect them, their families and the environmental effect at large. Retailers can thus undertake the duty of educating the consumers about the impacts of the products through conventional channels like marketing catalogs, in-store displays, Product labels and advertisements. How the retailers handle their customers could be the difference between failure and success of their businesses. Future trends in retailer-customer engagement indicate to a complete about turn by retailers where they engage customers via a robust and authentic marketing and promotion strategy as well as through in-store shopping experience (Malcolm 2002). Thus consumers will be more engaged in the process of marketing and the marketing process will be more consumers specific where the consumer could receive a message concerning a certain product. In the process of engaging the community, retail business undertakes a number of projects such as educational commitments by offering scholarships to privileged individuals in the community. The retailers also donate monetary and in-kind donations to different educational facilities in order to support the education. They also offer disaster relief programs. The future trend indicates an increase in philanthropy volunteerism towards the society.
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