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Honest Tea

Solution Id Length Case Author Case Publisher
2427 1056 Words (5 Pages) Paul A. Gompers Harvard Business School : 201076
This solution includes: A Word File A Word File

Honest Tea was a three-year-old beverage startup owned by Goldman and Nalebuff, who handled the company's culture, mission, and investment. Its initial investors were the family and friends of owners, and later company raised financing from individuals and small investors. The company took advantage of rising public knowledge of tea's health advantages and created a product that was low in calories and outperformed other bottled green teas on the market in terms of health benefits. Since its launch in 1998, the company recorded high growth in the following years. As per exhibit 9 of the case, the company recorded an increase in sales revenue of 349 % from 1998 to 1999. The company owners recognized that when firms implement sustainable methods, society benefits. America's Award for Best Sustainable Product was given to Honest Tea for the first time. The company's success is also attributed to its management team and its efforts in marketing activities and research and development.

Following questions are answered in this case study solution:

  1. Describe the leadership approach of one of the founders of Honest Tea, Seth Goldman.

  2. Describe the achievements of the company under Goldman’s leadership.

  3. What business strategy did the company under the leadership of Seth Goldman have?

Case Study Questions Answers

1. Describe the leadership approach of one of the founders of Honest Tea, Seth Goldman.

Goldman’s leadership performance centered on the concept of Triple Bottom Line. This approach aims to enhance transparency and sustainability in the business environment. As the case mentions, Honest Tea was the first recipient of America’s Award for Best Sustainable Product. Seth understood that if sustainable practices are used in organizations, it will lead to the well-being of society. According to Seth, it can be made possible by changing our thought processes and actions to create businesses that solve people’s problems. Along with pursuing financial objectives, the management, directors, employees, and investors of companies should also focus on developing more healthy corporate cultures.   

For new startup ventures, Goldman used the following principles in his leadership approach. There needs to be a vision before you succeed in building what you want to build. The vision has to be communicated with the team so everyone can work towards a common goal. Moreover, he provided his team with the resources they needed to make that vision a reality. Likewise, Honest Tea had a vision to take care of the planet its customers, and it is how Goldman passed this vision to his employees that has led to Honest Tea becoming a successful company. 

Moreover, Seth Goldman believes that fair trade equals good business. It is an essential concept towards his brand, and he believes fair trade plays an important role in keeping the integrity of his business. As the case mentions, a portion of the royalties that Honest Tea receives from I’tchik got to the Pretty Shield Foundation, a nonprofit that caters to the needs of native American youth. In this way, Honest Tea gives back to its community. 

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