Corporate Social Responsibility (CSR) refers to the relationship between a business and the society and how can both can benefit mutually through a joint partnership. Caroll (1991) suggests four different aspects to be a part of CSR and they are economic, legal, ethical and philanthropic. The economic aspect is the basis on which the business is built while legal responsibilities are encoded in law. Ethical responsibilities include doing what is right and just and above everything, philanthropic responsibilities include being a good corporate citizen and doing something good to the society and environment that has nurtured the business.
In this discussion, the CSR activities of two companies in the same sector are analyzed. The first company is Asia Pacific Breweries that owns the Tiger Beer brand of products and the second one is Carlton & United Breweries that manufactures the Victoria Bitter brand of beer. A close analysis reveals that APB is involved in a good degree of CSR and follows the principles of Triple Bottom Line while CUB prefers to try other options to boost its brand image. The in-depth view of the profitability of both the companies clearly shows that APB has a positive presence in the Indochina region and its CSR activities have given a huge boost to its corporate brand and image. VB, on the other hand, has consistently lost its market share to competitors in the last few years and they are facing a possible takeover. This study brings out the importance and benefits of incorporating CSR in every company's policy.
Corporate Social responsibility (CSR) is vital for the growth and survival of every company today because of the growing competition. Globalization has made the entire world flat and it is an even playing ground for any player. Also, economic problems have made it all the more difficult for any company to stand out in the competition. In such a case, CSR is one of the concepts that can give a company an edge over its competitors.
Tiger Beer -- Company Profile
Tiger Beer is the flagship product of Asia Pacific Breweries Ltd. This company was founded in Malaysia and was formerly known as the Malaysian Breweries Ltd. In 1990, it merged with Fraser and Neave and Heineken International and got its current name. "The group recorded revenues of SGD1,783.5 million (approximately $1,163.6 million) during the fiscal year ended September 2007, an increase of 16.9% over 2006." (APB, 2010).
Tiger Beer is the first beer that was brewed locally in Singapore in 1932. Today, it is distributed to more than 12 countries in the Asia-Pacific region and it is also exported to Europe, USA, Canada, Australia, New Zealand and South America. It has won numerous awards for its excellent taste and is currently one of the best beer brands in the world.
CSR and TBL for Tiger Beer
CSR has been an integral part of business for Tiger Beer and its holding company, the APB. It encompasses the environment and social aspect of the region in which it has a presence. It uses energy efficiency in all its processes -- right from brewing to packaging and it also stays right on top of water consumption. They have a program called "Aware of Water" that emphasizes the good management of water. It also focuses on the community development of the region. The APB Foundation works with many NGOs to eradicate health problems, educate young children, provide clean drinking water to people and preserve wildlife and heritage of the region.
"By preparing and disseminating triple bottom line statements, an organization conveys an image of concern and sensitivity to the three dimensions of societal responsibility: economic, environmental, and social." (Brown, Dillard & Marshall, 2006; p.7). Tiger Beer, through its parent organization APB, works on all these three fronts to popularize its brand and also to reach out to people in need.
Positive and negative analysis
In the current economic times, every company is trying to boost its sales and improve its popularity among people. One approach towards that is through CSR and TBL. When a company uses the local culture and festivals to promote its brand, it tends to be successful. The Chinese New year has always been a good opportunity for Tiger Beer to promote itself because it is a way to hype its origin of being a Far-east Asian company. This year it is all the more important because it is the year of the tiger. "To enhance the Chinese theme, and extend the brand beyond simply staging some events during the Chinese New Year, Tiger Beer brought in agency Exposure to produce a series of shows and events that tied in with the five elements of the Chinese Zodiac: earth, wood, water. metal and fire." (Event p.2).
In Laos, APB provided unlimited clean drinking water to victims affected by floods. Also, it was the main sponsor of the Elephant festival -- a UNESCO event aimed at protecting the elephant. All this was obtained for a chance to open a brewery in the country. It was trying to challenge Laos Beer which currently owns 98% of the market. In a few years, this region contributed to more than 23% of its total revenue. (Media, 2008). So, this has worked well for the company.
It also uses CSR as the basis of its marketing and as an approach to reach people directly. It has popularized the company in the Indochina region and it contributed to more than 48% of its profits. In Malaysia, it supports primary education and in 2008 provided basic school supplies to more than 498 needy students in this country. It is a way of giving back to the society that helped its growth and in return, this has helped the company to weather the turbulent economic challenges of the past few years. In 2010, its profit surged by more than 45% and it gained S$77.5 million in additional sales. The overall revenue grew to S$1.25 billion and this is a good 17% rise. The main reason for its increased sales and profits has been due to its extensive program of reaching out to people.
Company Profile for VB Beer
Victoria Bitter is an Australian beer and it holds the largest market share in Australia for all kinds of brewed beer. It is manufactured by a company called Carlton & United Beverages, a subsidiary of Foster's. It was introduced in 1890s and since then it has been selling beer with different levels of alcohol for different users. It also has a good presence in New Zealand, Indonesia, UK and to a limited extent in other countries. It is the only billion dollar beer retailer in Australia.
CSR and TBL for VB Beer
VB Beer is a relatively quiet beer company in terms of marketing and advertising. According to Neil (2005), this company relies on word of mouth advertising and promotions in bars to boost its sales in Australia. Victoria Bitter uses other options to face this tough economic environment. It does not make use of CSR and TBL for expanding its business. According to New York Times (2003), this company is looking to make a foray into wine business and is acquiring many companies that are engaged in wine business. The sales of beer fell in Australian pubs after the Victorian Government banned smoking in pubs and New South Wales restricted its slot hours and to make up for it, the company entered into the wine business. It bought Beringer Wine Estates of Napa Valley, California in 2000 to further this business idea.
Positive and negative analysis
TBL is one of the better ways to market because it gives an opportunity for the company to have a role in the local people's everyday life. Resorting to other ways many not be a successful option as is reflected in Victoria Bitter. It has seen a fall of 5% to 16% in its market segments during the last few years. (Mercer, January 2010). Many younger people have moved to lighter beers and low-carb ones and this has affected its growth. Also, many foreign players are entering the market and this has intensified competition.
To cope with these challenges, they have decided to spend more money on advertisements. According to (Waugh 2007, p.5), "The campaign will follow an initial $7m national advertising and marketing drive to support the launch of VB Mid comprising outdoor, print and TV execution in major markets around the country, developed in conjunction with ad agency George Patterson Y&R." This is an example of their marketing strategy and it clearly does not include any kind of TBL.
But, this move has not helped the company in anyway to boost its profits. Magee (2010, p.31) states, "FOSTER'S is planning a major campaign to boost ailing Victoria Bitter sales after unveiling a full-year loss that wiped out almost 4.5 per cent from its value and the company cancelled its final dividend. Slowing demand for beer, the strong Australian dollar and the…