Timberland and City Year Case Study Example | Topics and Well Written Essays - 2500 words

Timberland and City Year - Case Study Example The Timberland brand had existed since 1973 and had shown steady growth since then. When Jeffery Swartz took over in 1991, he applied some basic business expertise to the organization, reducing overheads, cutting inventory, and improving customer service significantly. The result was an increase in revenues from $196 million in 1990 to $650 in 1994. Alongside, Swartz made considerable effort to associate the company and the brand with community service. Swartz developed a distinct relationship with City Year, a fledgling community service corps for young people in the Boston area. Between 1991 and 1994, this relationship strengthened from a supply of 70 boots to a level where Timberland stood committed to providing five million dollars to City Year over a five-year period and Swartz taking a position on its Board. City Year in the meantime increased its spread to six major cities across the US and gained recognition as a national community service receiving 50% of its funds through F ederal grants. Timberland's practice of modern day philanthropy, although good hearted, cannot go without both challenges and criticisms. In the subsequent analysis, we find that the partnership generated benefits and negatives for Timberland because of the inherent and sometimes acute difference in agendas of a for-profit company and a non-profit organization. However, the most drastic problems surfaced in late 1994, early 1995. The loss for Timberland was financial, leaving many employees worried about an uncertain future. Timberland was forced to scale back its operation, laying off a number of employees and outsourcing labor. City Year also faced funding problems, as Congress threatened to withdraw federal funding. Community service with City Year became a major source of tension within the company as employees found it difficult to accept diversion of major amounts to City Year while colleagues lost their jobs in the company. The problem now became whether and how to maintain commitment to co mmunity service in the face of financial difficulties. Literature Review Mason (1993), states that customers may not perceive companies as doing enough even when they are providing good quality at competitive prices. There is increasing emphasis on environment and social involvement among businesses as part of strategy (Fellman, 1999). This concern has been at the root of corporate responsibility discussions that took shape in the Sarbanes Oxley Act, requiring transparency in operations and for companies to demonstrate their commitment to the environment and society through positive action. Studies have shown that customers buy from their business not only based on criteria such as price, quality, and availability, but also other socially responsible acts. According to L&G Business Solutions, a 2001 Hill & Knowlton Harris Interactive poll showed that 79% of Americans consider corporate citizenship when deciding whether to buy a particular company's product; 36% of Americans consider corporate citizenship an important factor when making purchasing decision s. Cause related marketing (CRM) is an accepted and key strategy in