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Veja Sneakers with a Conscience Case Solution

Solution Id Length Case Author Case Publisher
1141 632 Words (2 Pages) Kim Poldner, Oana Branzei Ivey Publishing : 910M89
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The business model of a conventional fashion industry firm is focused on obtaining and maximizing the profits and improving the financial bottom line. The main objective of such businesses to exist is to increase the wealth of shareholders. The majority of the high-end fashion firms work on high margins with less focus on ethical practices. In the past, there have been many cases of various well-renowned brands for poor labor conditions or using raw material from animal sources that were against the law and animal rights. On the other hand, the business model of Veja is based on ethical standards that take into consideration the environment, raw material and working conditions for the laborers.

The sneakers of Veja are prepared from latex sources from Amazonia. Moreover, apart from the look and feel of the product, the customers of Veja are prompted to have a look at bigger issues such as environmental issues, use of pesticides, crops which are genetically modified or the labor policies. Hence the business model of Veja is not about selling the product to the customer, but also building awareness and promotes an ethical approach to its customers, especially those who were accustomed to buying trendy fashion products.

Following questions are answered in this case study solution

  1. In which key ways does Veja’s business model differ from that of conventional fashion industry firms?

  2. What role do those differences play in terms of partnership and acquisition?

Case Analysis for Veja Sneakers with a Conscience

Also to this, the labor conditions at Veja were very different than conventional fashion businesses. The labor force in conventional fashion companies includes forced overtime, low wage rates and long working hours. On the other hand, Veja not only complies with International Labor Standards but also believed in providing the dignified working environment to the laborers. Also, to overtime pay and annual bonuses, the average wage of Veja laborers was also higher than the industry average. Besides the fair-trade certification, Veja worked on increasing the credibility of the farmers and worked for their social equity and improved lifestyles.

What role do those differences play in terms of partnership and acquisition?

The partnership and acquisition opportunities for conventional fashion industry brands are different than those of an ethical fashion brand. For conventional fashion brands that are less concerned about the ecology, raw material or the labor standards, the opportunities for business partners are wide. Whereas, Veja has stringent policies with respect to labor rights, ethical production and conservation of energy and environment and raw material requirements; thus, limiting the partnership opportunities. Moreover, larger fashion industry brands make an acquisition of small brands. As the main objective of such brands is profit-making rather than the maintenance of ethical standards. However, for a business that is strongly focused on social equity and fair trade, the acquisition of smaller companies or companies that are struggling with their finances does not seem an appropriate choice.

For ethical companies like Veja, a more appropriate way of establishing business partnerships is to help smaller companies or start up to improve their business processes and align them with ethical and ecological standards. This will not only help smaller firms to attain profitability but also strengthen the industry of ethical fashion brands. For ethical fashion deals, it is important that all the businesses and stakeholders involve complying strongly with ethical and labor standards.

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