Harvard Case - The Sustainability Sweet Spot at Jiu Zhen Nan Taiwan Pastry
"The Sustainability Sweet Spot at Jiu Zhen Nan Taiwan Pastry" Harvard business case study is written by Hwee Hoon Tan, Sin Mei Cheah, Esther Kong, Hsi-Mei Chung. It deals with the challenges in the field of Social Enterprise. The case study is 12 page(s) long and it was first published on : Jun 21, 2023
At Fern Fort University, we recommend Jiu Zhen Nan Taiwan Pastry (JZNTP) implement a comprehensive strategy that aligns their business model with their commitment to environmental sustainability and social responsibility. This strategy should focus on building a sustainable business model that integrates social innovation, impact investing, and shared value creation.
2. Background
JZNTP is a successful family-owned pastry business in Taiwan facing increasing pressure to adopt sustainable practices. The company is already engaging in some environmentally friendly initiatives, but they are seeking to expand their efforts and create a more holistic approach. The case study highlights the challenges and opportunities associated with balancing business profitability with social and environmental responsibility.
The main protagonists are:
- Mr. Chen, the owner of JZNTP, who is committed to the company's success and is open to exploring sustainable practices.
- Ms. Chen, Mr. Chen's daughter, who is passionate about environmental sustainability and wants to integrate it into the business.
- The JZNTP team, who are the key stakeholders in the company's decision-making process.
3. Analysis of the Case Study
This case study can be analyzed through the lens of stakeholder theory and the triple bottom line framework.
Stakeholder Theory: JZNTP needs to consider the needs and interests of various stakeholders, including customers, employees, suppliers, the local community, and the environment. By understanding the expectations of each stakeholder group, JZNTP can develop a strategy that balances their needs with the company's long-term sustainability.
Triple Bottom Line: This framework emphasizes the importance of measuring performance across three dimensions: economic, social, and environmental. JZNTP can use this framework to assess the impact of their sustainability initiatives on all three dimensions and ensure that their business practices are contributing to a more sustainable future.
Key Issues:
- Environmental Sustainability: JZNTP needs to reduce its environmental footprint by implementing practices such as sourcing sustainable ingredients, reducing waste, and minimizing energy consumption.
- Social Responsibility: JZNTP can contribute to the well-being of its employees, customers, and the local community by promoting fair labor practices, supporting local farmers, and engaging in community outreach programs.
- Business Model Innovation: JZNTP needs to find ways to integrate sustainability into its core business model, ensuring that it is profitable and sustainable in the long term.
4. Recommendations
Phase 1: Assessment and Planning (6 months)
- Conduct a comprehensive sustainability assessment: This assessment should identify JZNTP's current environmental and social impact, prioritize areas for improvement, and set measurable goals for sustainability performance.
- Develop a sustainability strategy: This strategy should outline JZNTP's vision for sustainability, define key objectives, and establish a roadmap for implementation.
- Engage stakeholders: JZNTP should involve all stakeholders in the development and implementation of the sustainability strategy, ensuring that their concerns and perspectives are considered.
- Pilot test sustainable practices: JZNTP should pilot test sustainable practices in specific areas, such as sourcing sustainable ingredients or reducing waste, to assess their feasibility and impact.
Phase 2: Implementation and Integration (12 months)
- Implement sustainable practices: JZNTP should implement the sustainable practices identified in the assessment and planning phase, focusing on areas with the greatest potential impact.
- Develop partnerships: JZNTP should partner with NGOs, government agencies, and other businesses to share best practices, access resources, and amplify their impact.
- Communicate sustainability efforts: JZNTP should communicate its sustainability efforts to customers, employees, and the public through transparent reporting, marketing campaigns, and community engagement initiatives.
- Measure and track progress: JZNTP should regularly measure and track its progress towards its sustainability goals, using metrics aligned with the triple bottom line framework.
Phase 3: Continuous Improvement and Innovation (ongoing)
- Continuously improve sustainability practices: JZNTP should continuously evaluate and improve its sustainability practices, seeking opportunities to reduce its environmental footprint and enhance its social impact.
- Embrace innovation: JZNTP should explore innovative solutions to address sustainability challenges, such as adopting new technologies, developing sustainable packaging, or creating new product lines that meet the needs of environmentally conscious consumers.
- Promote a culture of sustainability: JZNTP should cultivate a culture of sustainability within the company, encouraging employees to adopt sustainable practices both at work and in their personal lives.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core competencies and consistency with mission: JZNTP's commitment to quality ingredients and traditional pastry-making aligns well with the principles of sustainability.
- External customers and internal clients: Consumers are increasingly demanding sustainable products and practices, and employees are more likely to be engaged with companies that prioritize social and environmental responsibility.
- Competitors: JZNTP can differentiate itself from competitors by adopting a comprehensive sustainability strategy and showcasing its commitment to ethical and environmentally responsible practices.
- Attractiveness ' quantitative measures: Implementing sustainable practices can lead to cost savings, reduce risks, and enhance brand reputation, ultimately contributing to increased profitability.
6. Conclusion
By adopting a comprehensive sustainability strategy, JZNTP can position itself as a leader in the pastry industry, attract environmentally conscious consumers, and contribute to a more sustainable future. This strategy will require a commitment from all stakeholders, a focus on continuous improvement, and a willingness to embrace innovation.
7. Discussion
Alternatives:
- Minimalist approach: JZNTP could choose to focus on a few specific sustainability initiatives, such as sourcing local ingredients or reducing packaging waste.
- Outsourcing sustainability efforts: JZNTP could partner with a third-party organization to manage its sustainability initiatives, but this could limit control and transparency.
- Ignoring sustainability: JZNTP could choose to ignore sustainability altogether, but this could lead to reputational damage and loss of market share in the long term.
Risks and Key Assumptions:
- Cost of implementation: Implementing sustainable practices can be costly, but the long-term benefits outweigh the initial investment.
- Consumer acceptance: Consumers may not be willing to pay a premium for sustainable products, but JZNTP can educate consumers about the value of sustainability.
- Supply chain challenges: Sourcing sustainable ingredients can be challenging, but JZNTP can work with suppliers to develop sustainable sourcing practices.
Options Grid:
| Option | Benefits | Risks |
|---|---|---|
| Comprehensive Sustainability Strategy | Increased profitability, enhanced brand reputation, reduced environmental impact, improved employee engagement | Cost of implementation, consumer acceptance, supply chain challenges |
| Minimalist Approach | Reduced cost of implementation, easier to manage | Limited impact, potential for reputational damage |
| Outsourcing Sustainability Efforts | Reduced internal workload, access to expertise | Loss of control, potential for lack of transparency |
| Ignoring Sustainability | No upfront cost, minimal effort | Reputational damage, loss of market share |
8. Next Steps
- Develop a detailed implementation plan: This plan should outline the specific actions, timelines, and resources required to implement the sustainability strategy.
- Secure funding: JZNTP should explore funding options, such as grants, impact investments, or internal budget allocation, to support the implementation of the sustainability strategy.
- Build a team: JZNTP should assemble a team of dedicated individuals to lead and manage the sustainability initiatives.
- Communicate the strategy to stakeholders: JZNTP should clearly communicate the sustainability strategy to all stakeholders, including customers, employees, suppliers, and the community.
By taking these steps, JZNTP can successfully navigate the challenges and opportunities associated with sustainability and create a business model that is both profitable and sustainable in the long term.
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Case Description
Set in 2022, the case follows the sustainability journey of Jiu Zhen Nan, a 133-year-old Taiwanese pastry brand headquartered in Kaohsiung, the southern city of Taiwan. Jiu Zhen Nan specialises in gourmet traditional Chinese Han pastry, often consumed during major festivals, weddings, and religious celebrations. The century-old brand has an established stronghold at domestic airports, high-speed rail stations, and upscale department stores. Eric Lee, Chairman and the fourth-generation owner, had been at the helm of the family firm since 1996. Given the increased focus on sustainability issues in recent years, he had aligned sustainability priorities with the baked goods business, its core values, and its long-term purpose. Since the mid-2010s, he had led the firm to achieve considerable progress on several aspects of sustainability - food ethics, environmental sustainability, social participation, the promotion of Han pastry culture, and talent cultivation. Those efforts were duly recognised, winning the firm an Excellence in Corporate Social Responsibility award from the CommonWealth Magazine twice, in 2019 and 2021. Lee conceded that realising sustainability goals needed time, given that it would not be a short-term pursuit but rather an ongoing commitment. As he mulled over the options for navigating the prevailing challenges amid the COVID-19 pandemic, he recognised that, at the same time, there was mounting pressure to take even more action toward reducing the business impact on climate change. What more could a food manufacturing business like Jiu Zhen Nan do for the good of the planet, the good of society, and its future success?
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