Harvard Case - Unpacking Plastic Packaging: Carvajal Empaques and the Challenge of Reimagining the Product Life Cycle
"Unpacking Plastic Packaging: Carvajal Empaques and the Challenge of Reimagining the Product Life Cycle" Harvard business case study is written by Pilar Acosta, Stella Maldonado. It deals with the challenges in the field of Social Enterprise. The case study is 18 page(s) long and it was first published on : Dec 10, 2022
At Fern Fort University, we recommend Carvajal Empaques adopt a hybrid organizational model integrating social entrepreneurship principles into its core business strategy. This approach will allow the company to address the environmental challenges of plastic packaging while simultaneously creating shared value for stakeholders and fostering a more sustainable future.
2. Background
Carvajal Empaques, a leading packaging manufacturer in Colombia, faces a significant challenge: the environmental impact of plastic packaging. The case study highlights the increasing pressure from stakeholders, including consumers, NGOs, and governments, demanding more sustainable solutions. Carvajal Empaques, under the leadership of CEO Juan Carlos Carvajal, recognizes the need to transition towards a circular economy model, but faces the complexities of balancing profitability with environmental responsibility.
3. Analysis of the Case Study
This case study presents a complex challenge requiring a multi-faceted approach. We will analyze the situation through the lens of corporate social responsibility (CSR), sustainable business models, and social entrepreneurship.
CSR: Carvajal Empaques demonstrates a commitment to CSR by recognizing the environmental impact of its products. However, the company needs to move beyond reactive measures and develop a proactive strategy that aligns its business model with sustainable practices.
Sustainable Business Models: The company needs to explore innovative business models that integrate environmental sustainability throughout the product life cycle. This includes exploring circular economy principles, such as reuse, recycling, and biodegradability, to minimize waste and resource consumption.
Social Entrepreneurship: Carvajal Empaques can leverage social entrepreneurship principles to create a positive social impact while achieving business goals. This involves:
- Developing innovative solutions: Investing in R&D to develop sustainable packaging materials and technologies.
- Creating shared value: Partnering with NGOs and community organizations to address plastic waste management and promote circular economy initiatives.
- Measuring social impact: Implementing robust metrics to track the environmental and social impact of its initiatives.
4. Recommendations
Phase 1: Building a Sustainable Foundation (12 months)
- Develop a comprehensive sustainability strategy: This strategy should align with the company's mission, values, and long-term goals. It should include specific targets for reducing plastic waste, promoting recycling, and developing sustainable packaging solutions.
- Invest in R&D and innovation: Allocate resources to research and develop new sustainable packaging materials, such as biodegradable plastics, compostable packaging, and innovative recycling technologies.
- Establish partnerships with NGOs and industry leaders: Collaborate with environmental organizations, waste management companies, and other stakeholders to develop and implement sustainable solutions.
- Implement a circular economy approach: Explore opportunities for reuse, recycling, and composting of packaging materials. This could involve establishing partnerships with waste management companies, promoting product take-back programs, and developing closed-loop systems.
- Develop a robust social impact measurement framework: Track the environmental and social impact of initiatives through key performance indicators (KPIs) such as waste reduction, recycling rates, and community engagement.
Phase 2: Scaling Social Impact (24 months)
- Launch a social enterprise subsidiary: Create a separate entity dedicated to developing and scaling sustainable packaging solutions. This subsidiary can focus on developing innovative products, partnering with NGOs, and generating social impact.
- Explore impact investing opportunities: Seek investments from impact investors and socially responsible funds to support the social enterprise subsidiary and its initiatives.
- Develop a 'triple bottom line' reporting framework: Measure and report on the company's economic, environmental, and social performance to demonstrate its commitment to sustainability and shared value creation.
- Engage with stakeholders: Communicate the company's sustainability strategy and initiatives to customers, employees, investors, and the broader community.
Phase 3: Transforming the Industry (36+ months)
- Advocate for policy changes: Engage with government agencies and policymakers to advocate for regulations that promote sustainable packaging and circular economy principles.
- Develop educational programs: Partner with universities and schools to educate the next generation about sustainable packaging and waste management.
- Expand into new markets: Leverage the company's expertise and innovative solutions to expand into new markets with a strong focus on sustainable development.
5. Basis of Recommendations
These recommendations align with Carvajal Empaques' core competencies in manufacturing and its commitment to sustainability. They address the needs of external customers seeking sustainable packaging solutions and internal clients seeking to contribute to a positive social impact. By embracing social entrepreneurship, the company can differentiate itself from competitors and attract impact-conscious investors.
Quantitative Measures:
- Reduced environmental impact: Quantifiable reductions in plastic waste, greenhouse gas emissions, and resource consumption.
- Increased recycling rates: Measurable improvements in recycling rates for packaging materials.
- Social impact metrics: Tracking engagement with NGOs, community outreach programs, and job creation.
Assumptions:
- The company has the financial resources and commitment to invest in R&D and innovation.
- There is a strong demand for sustainable packaging solutions in the market.
- The company can effectively collaborate with NGOs and other stakeholders.
- Government regulations and policies will support the transition towards a circular economy.
6. Conclusion
By embracing social entrepreneurship and adopting a hybrid organizational model, Carvajal Empaques can transform its business while creating a positive social impact. This approach will allow the company to address the environmental challenges of plastic packaging, contribute to a more sustainable future, and generate long-term value for all stakeholders.
7. Discussion
Alternatives:
- Continuing with the current business model: This option carries significant risks, including reputational damage, declining market share, and increased regulatory scrutiny.
- Focusing solely on internal improvements: While important, this approach is insufficient to address the broader environmental and social challenges.
Risks:
- Financial risk: Investing in R&D and social enterprise initiatives may require significant upfront capital.
- Market risk: The demand for sustainable packaging solutions may not materialize as expected.
- Operational risk: Implementing a new business model and scaling social impact initiatives can be complex and challenging.
Key Assumptions:
- The company's commitment to sustainability is genuine and long-term.
- The company has the necessary expertise and resources to develop and implement innovative solutions.
- Stakeholders are willing to support the company's transition towards a more sustainable model.
8. Next Steps
Timeline:
- Month 1-3: Form a cross-functional team to develop the sustainability strategy.
- Month 4-6: Conduct market research and identify potential partners.
- Month 7-9: Develop a pilot project to test the feasibility of a circular economy approach.
- Month 10-12: Secure funding for the social enterprise subsidiary and launch the initiative.
- Month 13-24: Scale up the social enterprise and expand into new markets.
- Month 25-36: Advocate for policy changes and develop educational programs.
- Month 37+: Continuously monitor and evaluate the impact of the initiatives and make adjustments as needed.
By following these recommendations and implementing a phased approach, Carvajal Empaques can become a leader in sustainable packaging and contribute to a more responsible and sustainable future.
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Case Description
At the end of 2018, Ana Milena Munoz, of Carvajal Empaques S.A., a subsidiary of the Carvajal organization, was concerned. She was at a crossroads in her work because of the growing controversy at a global level about the use and disposal of plastic, the company's primary raw material. She had to present the 2019-2023 roadmap on sustainability in a week and had several alternatives on the table. However, she had not been able to get a full picture of the alternatives mentioned during the last meeting of the sustainability committee. Sustainability had made progress, but now, the challenges were significant. In the face of incoming legislation, the company needed to have a response to re-use and dispose plastic. The company had been working with Reciclplas a trade recyclers company. However, despite the support that Recicloplas had been receiving, this organization still had not reached the break-even point and the material it processed could not yet be integrated by Carvajal Empaques into its packaging due to food safety issues. Further, the supply and demand chains for the plastic resins used by the company were not structured in the country. Ana Milena reflected on several strategies to respond to the legislation, fulfill clients' expectations and maintain the social commitment to Recicloplas. These involved reflecting on the types of plastic resins or other raw materials the company would use.
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