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The power of Krispy Kreme donuts: a new model for corporate social responsibility?



Recently, the BPP Pro Bono Unit, which is extremely active and successful at BPP in delivering on legal pro bono schemes in the community, sent out the following brief message:

“Krispy Kreme doughnuts are being sold to raise money for Liberty tomorrow (Thursday) between 12 and 2pm in the foyer of BPP Holborn – enjoy!”

Needless to say the event proved to be very popular indeed! Interestingly, Emine Saner has recently written an article on how Britain has fallen in love with Krispy Kreme doughnuts. Her article from yesterday is here.

This week, the North Carolina-based chain announced it would be doubling the number of its outlets in the UK to 100 over the next five years, on the back of growing sales, with revenue up 12.6% and serving 5 million customers. The next will open in Leeds next month. There is no doubt that Krispy Kreme take their fundraising activities extremely serious in the UK. In the light of withdrawal of public funding for many walks of life, including legal services, this is especially important.

Their UK website gives a very inspiring description of their activities,

Need a more interesting way to raise money for your charity?

Whether you are a charity looking to raise money at a specific event or an individual looking for a different way to hit that sponsorship target, Krispy Kreme’s fundraising scheme is here to help.

From early on in our history, Krispy Kreme has supported charities and played an active role in the local community. We know that it is increasingly difficult to simply ask people to make a donation, which is why our scheme allows you to sell them something they’ll love, our doughnuts, whilst you make a profit for your charity!

Link here: http://www.krispykreme.co.uk/fundraising/raise-dough/

From a business point of view, here in the UK, they are stocked in Harrods and Selfridges as well as  there is also a less glamorous retail side. There are kiosks in motorway service stations, and in Enfield. In the UK, all stores are company-owned, but in the US, most are franchises). By the end of the 90s, the company had gone national, and in 2000 it was floated on the stock exchange. Over the next couple of years, the company expanded rapidly, including internationally. They spent little or no money on advertising, relying instead on word of mouth and giveaways.

Emile Saneer gives a very interesting of the marketing strategy, in relation to the strategic operation of Krispy Kreme. MBA students at BPP are currently studying in detail strategy and organizational behaviour. Saneer provides (in an article in the Guardian lifestyle section) that,

playing its part in the drive to get Americans to the polling booths during the 2008 presidential elections, Krispy Kreme outlets rewarded those who had cast their ballot with a free doughnut. To celebrate Barack Obama’s victory, the chain offered punters a free coffee with its very own piece of coffee art – an image of Obama in the foam – rebranding the drink “The United States of Americano”.”

 

This arguably extends further the concept of ‘corporate social responsibility’, seeing greater involvement between private companies in the private sector and charities in the third sector. For example, “Advice for Good” (4th June 2011) provides that,

“In this article in the Vancouver Sun we discuss an emerging type of partnership between charities and companies: affiliate marketing.  This mutually beneficial arrangement provides charities with access to funding and businesses with new customers and promotional opportunities.  It is a creative way for charities to get private sector funding and it goes beyond the typical corporate social responsibility (CSR) and community investment support. There are an ever increasing number of charity-corporate affiliate marketing partnerships, with companies including Ben and Jerry’s and Krispy Kreme getting on board.  With high demand among charities for corporate charitable contributions, affiliate marketing is a creative way for fundraisers to redefine corporate partnerships.”

 

Should corporate social responsibility be mandatory? Lessons from India.



Azim Hashim Premji (born 24 July 1945) is an Indian business tycoon and philanthropist who is the chairman of Wipro Limited, guiding the company through four decades of diversification and growth to emerge as one of the Indian leader in the software industry. According to Forbes, he is currently the third wealthiest Indian with a personal wealth of US$16.8 billion in 2011, as well as being the richest Indian Muslim. In 2000, he was voted among the 20 most powerful men in the world by Asiaweek. He was also among the 50 richest people in the world from 1999 to 2005 according to Fobes. In April 2004, he was rated among the 100 most influential people in the world by Time Magazine. He is India’s biggest philanthropist.

Premji says there is no need for a law on mandatory CSR spending. Speaking at a press conference with Warren Buffet and Bill Gates, Wipro Chairman Azim Premji said he felt larger companies had enough social consciousness to take up responsibilities without being told to do so. He also said that the legislation may be abused by companies which is why the government needed to issue certain guidelines. Premji was responding to a question on the government’s plan to make it mandatory for corporates to spend 2 per cent of their average income of three years, as part of the proposed Companies Bill.

Wipro chairman Azim Premji’s opposition to mandatory spending by industry on corporate social responsibility (CSR) activities is indeed echoed by others in the IT industry. Infosys Technologies CEO Kris Gopalakrishnan said that this should not be mandated, but it should be voluntary with proper disclosures. Some believe that shareholders ultimately own the company and thus they need to have a say in the matter as well. B Ramaswamy, MD of Sonata Software, said that the process of deciding how much a company must contribute to CSR must be made more democratic.

 

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