You have been hired as a business consultant, who is considered an expert in CSR, to help two environmentally-conscious entrepreneurs who want to start a new company that designs solar-powered cellular phones (NOT a case or charger). The cell phones will run on the Android operating system. The entrepreneurs are looking for advice regarding several decisions they need to make.
(Note: Xiaomi is a real Chinese company and it is NOT the company these two entrepreneurs is trying to start in this assignment. This Xiaomi phone is for you to understand what the proposed cell phone may look like.)
You are primarily asked for giving advice in the following areas:
Target customer group, price and specifications: The entrepreneurs are still debating if they should develop the product for the extremely high-end, high-end, high-middle, middle, low-middle, or low-end market. You need to help them to identify an appropriate target customer group. They are seriously considering targeting the young and college students by including high quality cameras, both front and back into their proposed cell phones. They want to create a brand image of a trend setter that sells high quality products at a lower than average market price. The product must actually have revenue higher than average if they are to make any profit, so they are debating how to obtain extra fees and upgrades.
Product release cycle: The entrepreneurs do not want to be technologically behind their competitors. Instead, actually they want to be one-step-ahead. So they want to release a new version of their product every 9 months, instead of the typical once-every-12 months cycle. However, this means that their models will become obsolete faster (more frequently than is the norm).
Raw material suppliers: The entrepreneurs want to minimize the costs associated with direct materials. Therefore, they intend to ask suppliers to submit bids from which the entrepreneurs will then choose the lowest bid.
Assembly factory: The entrepreneurs want to minimize the production costs and possibly also eliminate the cost of building a factory. Thus they are considering outsourcing the manufacturing of their innovative cell phones to a company in China as most of world’s smart phones are currently assembled there.
Analyze the decision considerations that the entrepreneurs are grappling with as outlines in the bullet points above. Write a report that outlines the top CSR issues (at least 3 issues) that may become critical for these entrepreneurs’ business over the next three years.
