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Posted on April 20th, 2012, by

In the contemporary business environment, social responsibility of the company plays increasingly more and more important role due to the huge impact the company’s social responsibility produces on the internal organizational culture and organizational performance and on the customers’ attitude to the company. In such a situation, social responsibility becomes even more significant in the context of the implementation of the market expansion strategy because social responsibility contributes to the formation of a positive image of the company as well as its CEOs that apparently facilitates the market expansion and enlargement the market share of the company. Hence, social responsibility and market expansion strategy are closely intertwined and should complement each other to meet strategic goals of the company and improve its market position.

On analyzing the current strategy of the Value Shop, it should be said that the strategy of market expansion is apparently an essential step for the further progress of the company because in the contemporary business environment it is impossible to maintain a positive marketing performance and achieve positive organizational results without increasing the market share of the company. In this respect, it is important to lay emphasis on the fact that the market expansion allows the company to increase its market share consistently since as the company enters new market its sales rates naturally increase while the growing market share improves the competitive position of the company (Kaliski, 2001). It proves beyond a doubt that the market expansion makes the company more flexible and less dependent on a specific, local market. As a result, companies oriented on local markets turns out to be in a disadvantageous position compared to the Value Shop, if the latter implements the market expansion strategy.

On the other hand, it is necessary to remember about substantial difficulties that the company can face while entering new markets. In this respect, it should be said that the company needs to start an active promotional campaign in order to draw the public attention to the company’s products. In such a context, social responsibility of the Value Shop is of the utmost importance because, in the contemporary business environment, social responsibility is one of the major factors contributing to the positive perception of the company by potential customers (Pride, Hughes & Kapoor, 2008). Obviously, today, the public image of the company is crucial for its commercial success and, what is more, it constitutes an essential part of the market value of the company because renowned brands can enter new markets consistently easier compared to unknown and unpopular companies.

Along with the facilitation of the market penetration and market expansion, social responsibility has a number of other benefits. First of all, social responsibility and positive ethical behavior of the company reinforces customer loyalty. As it has been already mentioned above, social responsibility contributes to the formation of a positive public image that leads to the reinforcement of customer loyalty. The latter brings considerable benefits to the company that is expanding its market share and enters new markets. The customer loyalty stimulates the higher interest of customers to traditional as well as new products of the company. The more confident customers are the easier it will be to convince them to buy products offered by the Value Shop using their loyalty. In such a way, a priori customers are ready to buy the products of the Value Shop than any other company if the customer loyalty is high.

Furthermore, on analyzing the application of the strategy of the wide implementation of social responsibility by other companies, it should be said that they have managed to achieve consistently more significant success than companies that failed to implement social responsibility strategy (Kaliski, 2001). In such a way, social responsibility has proved to give a strategic advantage over competitors who did not implement social responsibility as their corporate policy.  At the same time, it should be said that social responsibility improves considerably the internal atmosphere within the company since employees are certain in their future in the company and they feel being protected. In case of some problems, the company can support employees and even members of their families that make employees more devoted to the company and its goals.

In addition, due to positive internal and external effects of social responsibility, such as customer loyalty and employees devotedness, which implies low personal turnover, the Value Shop can recover after a crisis easier compared to its competitors who do not implement social responsible policies (Pride, Hughes & Kapoor, 2008).

Obviously, the faster recovery after the crisis gives the company a strategic advantage and puts it into the leading position in the market. The latter, in its turn, facilitates the further implementation of the market expansion strategy.

Finally, social responsibility starts from CEOs and the implementation of socially responsible policies improves not only the image of the company but the image of CEOs as well. Hence, CEOs can manage the organization even more effectively using their authority and support of employees as well as confidence of customers.

Thus, in conclusion, it should be said that the implementation of the market expansion strategy should be backed up by the implementation of social responsibility, which reinforces customer loyalty, improves competitive position and performance of the company, helps to recover after a crisis and improves the reputation of CEOs.


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