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Differences between Grameen Danone and Conventional Social Enterprise Essay


Social enterprise is a non-profit business that applies commercial plan to maximise innovations as well as developing the environment (Drayton 2010). Grameen Danone, as a social enterprise, is a non-profit making company. In general, it serves on humane grounds by assisting in fighting malnutrition in poverty-stricken regions like Bangladesh. Set up in 2006, the company opted to sell fortified yoghurt at a low price ranging between 0.09 and 0.17USD.

On the other hand, conventional businesses extremely rely on high cost of their products to remain sustainable in the global and competitive market (Grameen Danone: Youths For Social Entrepreneurship 2012). Clearly, conventional businesses majorly depend on large profit margins in order to meet their strategic goals and objectives. Notably, conventional businesses have profit maximization as a key agenda in their daily operations. This is contrary to Grameen Danone’s goal in the market; they offer products at extremely low prices.

Apart from the philanthropic nature, Grameen Danone is tasked with empowering needy people in the community. Therefore, the company employs Bogra villagers in their Yoghurt factory, in Bangladesh. This shows their purpose to create job opportunities for the environs. The company further supports the villagers by purchasing their milk for processing Yoghurt. This shows that Grameen Danone helps the community by offering them extra income through the milk purchase.

The support to the community is also evident through the employment of Bogra women as sales ladies to conduct door-to-door yoghurt advertisement. The company offered the women 10% of their sales as commission. Currently, Grameen Danone has availed over 160 jobs within the Bogra district.

Evidently, this company’s mandate is to create a social impact to the society (Grameen Danone: Youths For Social Entrepreneurship 2012). Conversely, conventional enterprises’ mandate is to ensure high sales for their goods and services at a favourable market price; their main purpose is to lay effective strategies that will enable them expand their internal operations and influence in the market.

Grameen Danone has a social multi-focus strategy in the community; it aims at empowering parts of the society and minimizing malnutrition among children in impoverished zones. On the other hand, conventional enterprises focus on the economic development that is centred on customers’ satisfaction and continuity (Monroe-White 2012).

They focus on the rate of product reception and consumption among their potential customers. But, they do not go ahead to determine the effect of their product on the consumers’ well-beings. Conventional enterprises may only support communities at will. This is through Corporate Social Responsibilities (CSR); firms engage in CSR as a means of supporting the community in their surrounding.

Some of the activities that amount to CSR include a scholarship for needy students, engaging in environmental protection awareness and engaging in HIV/AIDS awareness programs. Markedly, these activities are not the key strategic objectives of conventional commercial enterprises. It is worth noting that, for Grameen Danone, such activities are the key strategic objectives.

Historically, Grameen Danone has two financiers, Grameen Bank and the Danone factory. This factory process bottled water and dairy products such as Yoghurt and milk. Interestingly, the bank was providing microcredit to the poor in the society. The villagers could engage in business activities thereby supporting their livelihoods.

This strong background on community support laid a solid foundation for the operation of Grameen Danone. In the economic front, conventional enterprises focus on personal or corporate growth and development. For instance, McDonald’s Food Chains and Wal-Mart are operating to register high profits; the huge part of the profits directly benefits the owners as they use them in expanding their businesses.

However, a social enterprise like Grameen Danone pays emphasis on societal well-being. It tries to uplift all persons in the society irrespective of their social classes, disabilities, and other challenges.

Grameen Danone plans to have every person drive the economy, as opposed to conventional enterprises that fear competition. They want people to purchase their products with no empowerment knowledge on how to produce the products. These two enterprises address social, environmental and economic challenges from an out rightly different perspective.

According to Monroe-White 2012, conventional commercial enterprises engage in a competitive business in order to gain competitive advantage over their competitors. They are predominantly found in an innovation-driven economy since they use new technological methods to attract and maintain their customers.

In such markets, there are price-wars among companies with the aim taking control of the markets. Grameen Danone, however, operates in a competition-free market. This is supported from nature in which it operates; it does not have to advertise its products to get more consumers. They are the ones who identify a region of operation and the number of people to serve. This is in line with the social responsibility that the company has adopted.

Moreover, the company operates as a simple, but it is well-designed. Profit from the sale of products is refunded to Grameen Danone and is reinvested for the company expansion. The company impacts more on the community since it empower employments to many people by building more factories.

The Grameen Danone Company sustains the social values in the communities, creates new opportunities, and engages in innovations. Its decision-making process does not rely on capital ownership; it is distributed in limited and a minimal amount of labour. However, investors who do business with Grameen Danone Company do not benefit them further in the realization of their social and environmental goals (State as Conventional Commercial Enterprise n.d.).

Its membership is an open set of goals in accordance to the public interest. According to the US, social enterprise addresses social needs through product promotion or high rate of employment they offer to people. In addition, they do not relay on the government support as they are non-profit.

Social enterprise is a citizen initiative as it involves people from the community who share and educate themselves on their needs. It is a community benefit as it offers employment to people belonging to the community. Social enterprise can include external revenues outside its market.

Their proprietors are hidden hence not identified by the law. Besides, the real proprietors are the top managers of the business. They distribute income in form of salaries and benefits while price formation, is based socially by involving mechanisms of powers, which can come from non customers or real customers.

Conventional business differs from the social enterprise in that conventional business sells its goods and services with an aim of making profit. It receives revenue inform of taxes. In addition, they pay costs associated in the provision of services with the intention of getting back profit, and then the business distributes it to the proprietors who are the beneficiary. Conventional business pays for its services.

Additionally, conventional business has different prices for their different services inform of different levels of taxation, and they mostly depend on the government (State as Conventional Commercial Enterprise n.d.). However, the proprietors’ nature in the conventional business are disguised in every aspect of their life; socially, economically and politically. This includes the nature of customers, revenues, price formation and how they relate with property; it is their secret.

Further, conventional enterprises do not link revenues and property basing on the economic power. Besides, their key revenue comes from the sale of goods and services while their proprietor’s cost relies on input resources, labour and land. Their profit comes from the revenues after subtracting everything left from the sales while capital gains and dividends are their form of income (State as Conventional Commercial Enterprise n.d.).

Through economic interaction during the sale of goods, they make form their price since their key customers are the buyers of their goods and services. In the conventional business, stakeholders are the real proprietors who are legally identified by the law, however, no exclusive rights are based on power or position is entitled to them. In addition, there are no exclusive revenues from the outside market.

In conclusion, Grameen Danone applies business principles to solve a social problem with no profit making intentions. From this perspective, it operates in a large field that had been discussed above; for example, health and economic development. Conventional enterprises apply business principles to develop their internal and external growth systems.

Profit maximization remains the core purpose for such enterprises thereby forcing them to strategise on inculcating new technological inventions in order to remain profitable in the competitive market (Monroe-White 2012). The French business, Grameen Danone remains a pioneer in the social enterprise field.

References

Drayton, B., 2010, September 5, Social entrepreneurship: Characteristics of social entrepreneurship. Web.

Grameen Danone: Youths For Social Entrepreneurship 2012, Youths For Social Entrepreneurship | Youths Changing Their World. Web.

Monroe-White, T 2012, Organizational Differences of Social and Conventional Enterprises: A Cross-Country Approach. Web.

State as Conventional Commercial Enterprise, Theory of the State. Web.

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IvyPanda. (2019, September 4). Differences between Grameen Danone and Conventional Social Enterprise. Retrieved from https://ivypanda.com/essays/differences-between-grameen-danone-and-conventional-social-enterprise/

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"Differences between Grameen Danone and Conventional Social Enterprise." IvyPanda, 4 Sept. 2019, ivypanda.com/essays/differences-between-grameen-danone-and-conventional-social-enterprise/.

1. IvyPanda. "Differences between Grameen Danone and Conventional Social Enterprise." September 4, 2019. https://ivypanda.com/essays/differences-between-grameen-danone-and-conventional-social-enterprise/.


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IvyPanda. "Differences between Grameen Danone and Conventional Social Enterprise." September 4, 2019. https://ivypanda.com/essays/differences-between-grameen-danone-and-conventional-social-enterprise/.

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IvyPanda. 2019. "Differences between Grameen Danone and Conventional Social Enterprise." September 4, 2019. https://ivypanda.com/essays/differences-between-grameen-danone-and-conventional-social-enterprise/.

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IvyPanda. (2019) 'Differences between Grameen Danone and Conventional Social Enterprise'. 4 September.

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