Harvard Case - Seventh Generation: The Marketside Offer
"Seventh Generation: The Marketside Offer" Harvard business case study is written by Emmanuel ER Raufflet, Mihaela MS Stefanov. It deals with the challenges in the field of Social Enterprise. The case study is 14 page(s) long and it was first published on : Oct 1, 2010
At Fern Fort University, we recommend that Seventh Generation pursue a strategic partnership with a major retailer like Target or Walmart to launch its Marketside line. This partnership should leverage the retailer's existing infrastructure and customer base to expand Seventh Generation's reach, while simultaneously integrating the Marketside brand's values of environmental sustainability and social responsibility into the retailer's own operations.
2. Background
This case study focuses on Seventh Generation, a company committed to environmental sustainability and social responsibility. Seventh Generation has been successful in establishing itself as a leader in the natural and organic cleaning products market. However, the company faces challenges in expanding its reach and achieving its ambitious goals of promoting sustainable practices on a larger scale. The case study explores the potential of the Marketside line, a new brand of sustainable cleaning products developed specifically for the mass market, to address these challenges.
The main protagonists of the case study are:
- Seventh Generation: A company dedicated to environmental sustainability and social responsibility.
- Marketside: A new brand of sustainable cleaning products designed for the mass market.
- Major Retailers: Potential partners for Seventh Generation to distribute the Marketside line.
3. Analysis of the Case Study
The case study presents a compelling opportunity for Seventh Generation to leverage its commitment to social entrepreneurship and environmental sustainability to achieve significant growth. The Marketside line offers a unique opportunity to reach a broader audience and contribute to a more sustainable future.
Strategic Framework: We can analyze the case study through the lens of Porter's Five Forces framework:
- Threat of New Entrants: The market for sustainable cleaning products is growing, attracting new entrants. However, Seventh Generation's strong brand and established presence create a barrier to entry.
- Bargaining Power of Suppliers: Seventh Generation has a strong relationship with its suppliers, ensuring access to high-quality, ethically sourced ingredients.
- Bargaining Power of Buyers: The mass market offers a significant opportunity for Seventh Generation, but also presents challenges in terms of price sensitivity and brand loyalty.
- Threat of Substitute Products: Traditional cleaning products pose a threat to Seventh Generation's market share. However, the growing awareness of environmental and health concerns is driving consumer demand for sustainable alternatives.
- Competitive Rivalry: The market for sustainable cleaning products is highly competitive, with established brands like Method and Ecover vying for market share.
Financial Analysis: Seventh Generation's financial situation is strong, with a history of profitability and a commitment to reinvesting in growth. The Marketside line represents a significant investment, but the potential returns are substantial.
Marketing Analysis: Seventh Generation has established a strong brand identity focused on environmental sustainability and social responsibility. The Marketside line offers an opportunity to expand its reach and appeal to a broader audience by offering affordable, high-quality sustainable cleaning products.
Operational Analysis: Seventh Generation has a well-established supply chain and manufacturing processes. However, scaling up production for the Marketside line will require significant investment and careful planning.
4. Recommendations
We recommend that Seventh Generation pursue the following steps to launch the Marketside line successfully:
- Strategic Partnership: Form a strategic partnership with a major retailer like Target or Walmart. This partnership should leverage the retailer's existing infrastructure and customer base to expand Seventh Generation's reach.
- Market Segmentation: Target the Marketside line to price-conscious consumers seeking sustainable cleaning products. This segmentation allows Seventh Generation to compete effectively in the mass market while remaining true to its values.
- Product Development: Develop a range of sustainable cleaning products that meet the needs of the mass market, focusing on affordability, effectiveness, and environmental friendliness.
- Marketing Strategy: Develop a marketing strategy that emphasizes the value proposition of the Marketside line, highlighting its affordability, sustainability, and social responsibility.
- Branding: Maintain a consistent brand identity across all Marketside products, emphasizing its connection to Seventh Generation's core values.
- Distribution: Leverage the retailer's distribution network to ensure widespread availability of Marketside products.
- Pricing: Develop a competitive pricing strategy that balances affordability with profitability and sustainability.
- Social Impact Measurement: Implement a robust social impact measurement framework to track the environmental and social benefits of the Marketside line.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies and Consistency with Mission: The Marketside line aligns with Seventh Generation's core competencies in sustainable product development, marketing, and distribution. It also reinforces the company's mission of promoting environmental sustainability and social responsibility.
- External Customers and Internal Clients: The Marketside line addresses the needs of price-conscious consumers seeking sustainable cleaning products. It also provides Seventh Generation's employees with an opportunity to contribute to a larger social impact.
- Competitors: The Marketside line allows Seventh Generation to compete effectively in the mass market while remaining true to its values. It also provides a platform for differentiation from competitors by emphasizing its commitment to sustainability and social responsibility.
- Attractiveness: The Marketside line offers significant potential for growth and profitability. The partnership with a major retailer provides access to a large customer base and a well-established distribution network.
6. Conclusion
The Marketside line offers Seventh Generation a unique opportunity to expand its reach, achieve significant growth, and make a positive impact on the world. By partnering with a major retailer, focusing on market segmentation, and developing a strong marketing strategy, Seventh Generation can successfully launch the Marketside line and contribute to a more sustainable future.
7. Discussion
Alternatives:
- Direct-to-consumer model: Seventh Generation could choose to sell the Marketside line directly to consumers through its own website or other online platforms. However, this approach would require significant investment in marketing and logistics.
- Independent distribution: Seventh Generation could choose to distribute the Marketside line through independent retailers. However, this approach would limit its reach and potentially lead to inconsistent branding and messaging.
Risks:
- Retailer partnership: The partnership with a major retailer could lead to conflicts of interest or compromise Seventh Generation's values.
- Market acceptance: The Marketside line may not be successful in the mass market due to price sensitivity or lack of consumer awareness.
- Scaling up production: Scaling up production for the Marketside line could lead to operational challenges and quality control issues.
Key Assumptions:
- The partnership with a major retailer will be mutually beneficial.
- Consumers will be receptive to the Marketside line's value proposition.
- Seventh Generation can successfully scale up production and distribution.
8. Next Steps
- Identify potential retail partners: Conduct due diligence on major retailers to identify potential partners that align with Seventh Generation's values.
- Negotiate partnership terms: Develop a mutually beneficial partnership agreement that outlines roles, responsibilities, and financial arrangements.
- Develop Marketside product line: Finalize the product line, packaging, and pricing for the Marketside line.
- Develop marketing strategy: Develop a comprehensive marketing strategy that includes advertising, public relations, and social media.
- Launch Marketside line: Coordinate the launch of the Marketside line with the retail partner.
- Monitor performance: Track the performance of the Marketside line and make adjustments as needed.
By taking these steps, Seventh Generation can successfully launch the Marketside line and achieve its ambitious goals of promoting environmental sustainability and social responsibility on a larger scale.
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Case Description
Seventh Generation is a leader in the niche market for "green" household cleaning products in the U.S. It enjoys a unique reputation, strong branding, and fast growth. In 2008, while Seventh Generation is looking for ways to expand its customer base, its executive management is approached by Marketside, a subsidiary of Walmart set up to tap into the "green" market. The potential market that Seventh Generation could access through this partnership is enormous. But so is the risk of being associated with a retailer that has been heavily condemned in the past for its poor environmental and social record, and which Jeffrey Hollander, cofounder and chairman of Seventh Generation, has been publicly criticizing for many years. He must weigh the pros and cons of this opportunity, evaluate the risks, and make a decision on whether to accept Marketside's offer.
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