Blog 2: Analyzing the External Strategic Environment and Evaluating Industry Dynamics and Socially Responsible Corporations

McKinsey identified that one of the global forces is a new "societal deal", in which corporations should play a bigger role in alleviating societal issues. The article indicates that companies actively engaged in the societal deal are more effective at motivating their employees to adhere and contribute to company mission and strategy. A growing number of companies are B Corp certified and ESG investing has increased, reflecting consumer and business attitudes on social responsibility. Consumers now expect companies to be involved in social responsibility and thus drive the C2B model that the article also describes. Having the B Corp label can add value to a company brand and differentiate from its competitors. McKinsey emphasizes free goods and services as a part of C2B, but it also includes directing companies to develop goods and services consumers want. The C2B model is an indication of rising consumer power, one of Porter's 5 forces. Porter's outline of the power of consumers and buyers is simplistic as it describes the economic drivers of consumers (mainly price). Consumers today are demanding more from companies and it seems like traditional economic drivers are not as important as before. Consumers care more about company mission and effect on society. As the nature of consumer demand changes, companies must respond with strategies that look beyond their bottom line.