Showing posts with label WeWork. Show all posts

Monday, February 17, 2020

Strategic CSR - Casper

The article in the first url below discusses the troubles faced by Casper, the online mattress company, since it recently decided to go public:

"The company's stock began trading on the New York Stock Exchange [Thursday] at $14.50 a share, slipped below $14 in the afternoon and ended the day at $13.50. … The New York-based start-up had been valued at $1.1 billion by private investors last year. But that was before the five-year-old company publicly revealed in January that it lost $67 million on $312 million in revenue in the first nine months of 2019. … Casper reduced its proposed share price, valuing the company at less than $500 million. It raised $100 million in the offering."

Since the collapse of WeWork's business model, it seems that Wall Street is finally waking up to the importance to a firm of revenue generation. More specifically, from a strategic management perspective, the market now appears to more fully appreciate the importance of a sustainable competitive advantage (with the emphasis on 'sustainable'):

"Before it went public, Casper had been the toast of the start-up world. The company shook up a stodgy mattress industry by selling beds online, delivering them to people's doorsteps in boxes the size of mini-fridges. … Venture investors poured more than $340 million into the company, according to Crunchbase, and Casper began calling itself the 'Nike of sleep,' selling pillows, sheets, dog beds and other accessories to what it termed the 'sleep economy.' … But as Casper grew, competitors saw an easy opportunity and rushed in, with an average of one new 'bed-in-a-box' company launching per week between 2015 and 2018. There are now 175 competitors in the market, according to GoodBed, a mattress comparison website. There are even copycats from the older mattress companies, like 'Cocoon by Sealy.'"

As such, Casper has continued to struggle in the stock market, and currently sits at around $10 a share. Having recently bought a new mattress myself (from a chain store, locally), this story got me thinking about the online mattress business. I considered Casper when I was looking into mattresses, but dismissed the company on the basis that I couldn't try its products out in advance and returning the mattress, if there was a problem, would be too much hassle. Then I saw the article in the second url below, which details the environmental impact of this relatively new online mattress industry:

"The UK threw away more than 7m mattresses in 2017, the vast majority of which went straight to landfill. … Flytipping is another huge area of concern: English councils spend £58m a year on clear-up, with mattresses among the most commonly illegally dumped items. According to the National Bed Federation (NBF), only about 19% of mattresses are recycled. The reason? They are a nightmare to recycle."

A similar challenge is faced here in the U.S.:

"Mattresses are a global environmental nightmare. The US throws away 18.2m mattresses a year, but there are only 56 facilities available to recycle them."

The problem is more acute today, according to the article, because of the emergence and growth of the online mattress industry:

"Changing consumer behaviour is behind this ever-growing mattress mountain. Time was, you would change your mattress every eight to 10 years. But with online retailers offering more choice than ever, we have learned to expect better mattresses, and to replace them more frequently."

This industry has been enabled by specific innovation:

"The development of roll-down technology – which allows mattresses to be packed into small, easily shippable boxes – has led to a plethora of start-ups targeting a $30bn international market. There are now at least 175 companies that will ship roll-down mattresses to your front door."

And, what is interesting about such a crowded market is that there is intense competition to survive, which exacerbates the environmental impact of all these mattresses:

"Most of these start-ups offer 100-day comfort guarantees, during which consumers can return their mattresses for a full refund if for any reason they are not up to scratch. Some, such as the US's Nectar, even offer a 365-day guarantee. Theoretically, consumers can cycle between these providers for high-quality mattresses at no cost: a Wall Street Journal reporter recently calculated that if she took advantage of all the offers available, she would be able to sleep on a free mattress for eight years."

What most people no doubt do not realize when they return their mattress is that it most likely cannot be re-sold. And, because these mattresses are do difficult to recycle, they are most often dumped:

"Some online providers have arrangements with care homes or hospitals to collect lightly used mattresses, re-cover them, and put them back into use. Others send them for recycling. But many will, inevitably, end up in landfill."

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (5e)

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler5e

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

Casper, the Mattress Start-up, Goes Through with Lackluster I.P.O.

By Erin Griffith

February 6, 2020

The New York Times

Late Edition – Final

https://www.nytimes.com/2020/02/06/technology/casper-ipo.html

The mattress landfill crisis: How the race to bring us better beds led to a recycling nightmare

By Sirin Kale

February 12, 2020

The Guardian

https://www.theguardian.com/environment/2020/feb/12/mattress-landfill-crisis-recycling-nightmare

Monday, September 17, 2018

Strategic CSR - WeWork

The article in the url below covers the decision over the summer by WeWork to exclude meat from its offices. Specifically, the company announced it will no longer pay for any meals that include meat – whether that is catered events in their offices or any reimbursed meal by employees anywhere (inside the office or at a restaurant):

"The company will no longer serve red meat, pork or poultry at company functions, and it will not reimburse employees who want to order a hamburger during a lunch meeting. In a memo to employees announcing the new policy, Miguel McKelvey, WeWork's co-founder and chief culture officer, said the decision was driven largely by concerns for the environment, and, to a lesser extent, animal welfare."

WeWork has grown quickly in recent months and now employs 6,000 employees (aside from the various companies/entrepreneurs that rent its work spaces). As such, as McKelvey noted in the email he sent to employees explaining the decision, the firm can have an impact. What is interesting, however, is that this decision has little to do with animal welfare and everything to do with climate change:

"'New research indicates that avoiding meat is one of the biggest things an individual can do to reduce their personal environmental impact — even more than switching to a hybrid car,' he wrote. Additionally, WeWork could save 'over 15 million animals by 2023 by eliminating meat at our events.'"

Beyond WeWork, however, the article raises a more fundamental point about values in the workplace. Rather than the company reluctantly reflecting the values of its employees who pressure it to adopt this policy or that practice, it is companies that are shaping the behavior (and values) of their employees:

"In ways large and small, companies are imposing corporate values on the personal lives of their employees. Hobby Lobby has refused to pay for birth control for its employees, citing the owner's Christian values. And the chief executives of companies including Koch Industries and Westgate Resorts have sent memos and informational packets to employees suggesting how they vote. Other companies have tried to prevent employees from using everything from Uber to cigarettes. In 2015, IBM banned employees from using ride-sharing apps, citing safety and liability concerns. (Employees rebelled, and the company did a U-turn a day later.) And several big employers, including General Electric, have successfully paid employees to quit smoking. Scotts Miracle-Gro even has a policy of not hiring smokers, a move it says helps keep health care costs down."

Among this growing evangelism, however, "WeWork appears to be the first big company to tell its employees what they can and can't eat." The article suggests that removing choice is difficult for a company to do. Far more effective is to maintain at least the illusion of choice through the power of nudges:

"… at Google, two of the many cafes at company headquarters tried out 'meatless Mondays,' going vegetarian for just one day a week. Employees rebelled, throwing away silverware and staging a protest barbecue. Meatless Mondays didn't last at Google. But in time, the company made changes to the cafeterias — like offering smaller plates and making salad bars more prominent — that improved employees' eating habits."

For McKelvey, however, this is an issue larger than diet and larger than any one person:

"At WeWork, a company led by idealistic co-founders who got their start with an eco-friendly co-working space in Brooklyn, the move to vegetarianism is a reflection of their unconventional personalities. 'I don't eat meat, but I don't consider myself a vegetarian,' Mr. McKelvey said. 'I consider myself to be a 'reducetarian.' I try to consume less and be aware of the decisions I'm making. Not just food, but single-use plastics, and fossil fuels and energy.'"

More than an imposition on his employees that he needs to apologize for, therefore, McKelvey sees it as his duty to influence their lives:

"As Mr. McKelvey sees it, imposing his values on his employees is a natural part of being a corporate leader today. 'Companies have greater responsibility to their team members and to the world these days,' he said. 'We're the ones with the power. Large employers are the ones that can move the needle on issues.'"

As such, it seems that there is more to come:

"Uncomfortable as the new dietary policy may be, Mr. McKelvey said WeWork is only just getting started. The company is phasing out leather furniture, single-use plastics and is going carbon neutral. In time, he said, the company will evaluate its consumption of seafood, eggs, dairy and alcohol."

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (4e)

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

Memo from the Boss: Meat is not an Option

By David Gelles

July 22, 2018

The New York Times

Late Edition – Final