chains Chief Executive Tom Mears decided to differentiate hi

chains, Chief Executive Tom Mears decided to differentiate his product and sell “bur- gers with a soul.” Mears, the son-in-law of the founder, decided to combine good food with good works. The company began to build its strategy around three key words—“fresh, local, and sustainable.” It pursued this strategy through partnerships with local businesses, farms, and producers. In 2003, Gourmet magazine rec- ognized Burgerville the home of the nation’s freshest fast food. According to the company Web site, “At Burgerville, doing business responsibly means doing business sus- tainably. One example of this is our commitment to pur- chasing 100 percent local wind power equal to the energy use of all our restaurants and corporate office.” The company purchases its electricity from local windmills. Burgerville uses “sustainable agricul- ture,” which means that its meat and produce are free from genetically modified seeds or livestock. In its cooking, the company avoids trans-fats, and once the cooking oils are used up, they are converted into biodiesel. The company buys its antibiotic- and hormone-free beef locally. In addition to burgers, Burgerville offers a wild Coho salmon and Oregon Hazelnut Salad. Meals for children often come with seeds and gardening tools rather than the usual cheap toy offered at the national chains. Burgerville extends its good works to its employees. The company pays 95 percent of the health insurance for its hundreds of workers. This adds $1.5 million to its annual compensation expense. To get its affordable health care, employees have to work a minimum of 20 hours a week for at least six months, a more generous arrangement than most provided by stores. Being a good corporate citizen is expensive when done the Burgerville way. Though the company won’t reveal its financial bottom line, one industry consultant estimated that its margin is closer to 10 percent com- pared with McDonald’s 15 percent.

1. How much extra do you think most people are willing to pay for a socially responsible, sustainable hamburger? How much extra are you willing to pay? Will this business model succeed outside Washington and Oregon? At a national level? Can Burgerville compete with McDonalds globally?

2. What tensions among its economic, legal, ethical and philanthropic responsibilities do you think are most important to Burgerville?

3. Identify and discuss the stakeholders of Burgerville. Who are the most important stakeholders of Burgerville? Why?

4. Are the livestock slaughtered to become hamburgers stakeholders? Does Burgerville owe any duties to these animals? Do animals such as livestock have any rights? Can a company such as Burgerville truly be socially responsible and sustainable when their profits are based on slaughtering animals?

Solution

1. How much extra do you think most people are willing to pay for a socially responsible, sustainable hamburger?

The truth is, in case of fast food, people are more concerned with taste rather than the company being socially responsible. If the taste is good, then the fact that the company is socially responsible will just be a secondary reason for going to that joint. Along with taste, price will also precede the socially responsible point. There is a relatively small percentage of the population which will take those extra measures of going to Burgerville as it is a socially responsible joint.

2. How much extra are you willing to pay?

Like the majority of the population I would focus more on taste and price and a socially responsible joint would be a secondary reason for me to pay extra.

3. Will this business model succeed outside Washington and Oregon? At a national level?

This business model might find it difficult to succeed at a national level for the simple reason that people might just not share the same enthusiasm of the owners that they are a socially responsible joint. Additionally, the local communities of Washington and Oregon might relate to Burgerville as it is being run by one of their own but other might not be as flexible and accepting.

4. Can Burgerville compete with McDonalds globally?

One feels that Burgerville will find it difficult to compete with McDonalds as it already has a large market share and a very large fan base. It has faced numerous controversies but it has always come out on top. Hence, globally it will be difficult for Burgerville to outclass McDonalds.

5. What tensions among its economic, legal, ethical and philanthropic responsibilities do you think are most important to Burgerville?

The USP that Burgerville wants to establish is that it is a socially responsible joint; hence philanthropy might be an important aspect for them. However, they have to give importance to economic, legal and ethical factors as ignoring them might lead to them being out of business.

6. Identify and discuss the stakeholders of Burgerville. Who are the most important stakeholders of Burgerville? Why?

The stakeholders of Burgerville are; its management which is Tom Mears who is Chief Executive, the local businesses, farms and producers with whom Burgerville has entered in to a partnership. Another stakeholder are the local windmills from whom they purchase their electricity.

The most important stakeholders are the local businesses, farms and producers. The reason for this is that they do not use genetically modified meat so they use everything fresh which has to be procured locally hence, the local businesses are the important stakeholders as they provide Burgerville with the necessary meat and livestock so that they can operate and follow their motto of fresh, local and sustainable.

7. Are the livestock slaughtered to become hamburgers stakeholders? Does Burgerville owe any duties to these animals? Do animals such as livestock have any rights? Can a company such as Burgerville truly be socially responsible and sustainable when their profits are based on slaughtering animals?

In essence, slaughtering any living being is incorrect. Hence, the only way to be fair is to be vegetarian. However, by denying meat to the non – vegetarians they are being denied their rights. The correct thing to do is to make sure that the animals are taken care of properly. When they are slaughtered they face as little agony as possible.

There are no rights for livestock animals and companies do not owe anything to these animals. Companies can be socially responsible even if they are slaughtering animals as at the end of the day they are helping someone fill their stomach.