Corporate Social Responsibility and Disruptive Innovation in Business Strategy

This article discusses the impact of Corporate Social Responsibility and Disruptive Innovation on Business Strategy with case studies of CEMEX and Netflix. It covers Porter and Kramer’s CSV framework, CEMEX’s success in Mexico, and Christensen’s theory of disruptive innovation.

BUSINESS STRATEGY

TABLE OF CONTENT
SECTION A.................................................................................................................................3
1 Porter and Kramer’s CSV framework......................................................................................3
SECTION B.................................................................................................................................5
2. critically discuss if CEMEX’s continuing success in Mexico has been the result of the
ownership of a chain of CEMENT and concrete production facilities........................................5
3. Christensen’s theory of disruptive innovation.......................................................................10
REFERENCE................................................................................................................................13

SECTION A
1 Porter and Kramer’s CSV framework
Corporate social responsibility CSR refer as the regulating business framework which enables
the organisation to be socially accountable, with this firms are able to follow the aspect and
societal norms and to reduce the environmental impact for people wellbeing. Creating shared
value CSV is a suitable framework that is used to develop the economic value which accounting
all societal challenges and requirements (Rubio-Andrés, del Mar Ramos-González and Sastre-
Castillo, 2022). Porter and Kramer has suggested that there are mainly three methods to create
the shared values which are- By re-examining the goods and markets, Reanalysing the efficiency
in value chain and by creating the local cluster. In the given scenario it is stated that the Netflix
are streamlining their CSR strategy by taking some initiative, company usually focusing on
hiring the communal people to support the community, as to give job opportunity to the locals
and to develop income option for them. According to the CSV framework, businesses act as
businesses not like a charitable actor, they can enhance the profitability as well as to improve the
environmental performance. By decreasing the carbon footprint, and to support the society, that
makes the company to fulfil the CSR strategy.
A First initiative is about to support the wildlife a non-profit organisation which are aiming to
create a solution for the wildlife conservation. CSV framework allows the organisation to focus
on the right type of profit as to develop the profit and revenue which can help the society to
grow. This project is about wildlife work a REDD program company, which aims to provide the
innovative market solution to the biodiversity. They are focusing on protecting the forests,
communities. Kasigau Corridor a project which is based on the Rukinga, Kenya, this project
aims to protect the forest home for about 2000 elephants. This project also developed the market

approach solution for the biodiversity conservation, it also marked to avoid the large amount of
CO2 that impacts the environment. This project also works with the local communal people that
are about 5000 to protect the corridor (Shah and Guild, 2022). As these project is not focus on
protecting the wildlife but also to improve the societal situation, as to provide the jobs
opportunities to the local people so that they can make earning for their families. This project is
designed to concern with the community as to support the society and to connect with the
different communal landowners to allow them to spend their carbon earning or revenues by their
own. The sale which is made through the carbon, wildlife work support the job development in
that areas and to provide full cooperation in education, producing eco-friendly products.
B Dimpact project is all about to develops the tool that helps to decrease the complexity of
digital emission of the carbon. Project’s aim is to develop the calculator that is used for
calculating the online carbon. Through this project Computer scientist from the Bristol university
who are working with the sustainability and technologies with the digital content creator
company to map the carbon hotspot. As per the CSV framework, porter and Kramer stated that
the businesses help the community with their profit instead of being selfish as to use profit only
for their growth (Yamane and Kaneko, 2022) . By organising the charitable events helps the
firms to also gain the support of the society, as by hiring the youth which is beneficial in driving
good changes in country’s economy. Dimpact project will allow the companies to view their
carbon impact right from the end user so that they can easily prepare the suitable strategy to
reduce the carbon impact or to meet the sustainability.
C This initiative is about to creating a new series which is our planer that aims to aware the
global audiences about the climate change, as how it is impacting the wildlife. Our planet project
aims to aware the people as we are the first generation to know that we are creating major impact
over the environment. So that it will lead the people to reduce the uses of the things which are
major responsible for climate change and for global warming. This series has been filmed in
different 50 countries which covers the every continent. Main purpose of the film is to aware the
people across the world to know the environmental challenge and to start adopting natural and
green things so that it will be good for the upcoming generation (Rendtorff, 2022). Initiative is
also associated with the series of popular shows that are streaming on the online platform. CSV
module targets to utilise the resources and to use the energy in a sustainable form so that it will
benefit the business and also marks the changes in the economy.

D Last initiative is about to address the issues as half of the carbon emission is generated by the
film production, therefore Netflix company is aiming to replace their onset diesel generator with
the sustainable solution that are solar panels. Company also focus to reduce the carbon footprint
in near two years which is a big commitment (de Sá Medeiros and Forte, 2021). With this
approach they are planning to banning the diesel generator as company analyse that about more
than half of their carbon emission is developed by the use of diesel generator. Porter and Kramer
in their CSV project also stated that shared value is not about the CSR instead it is core business
strategy.
As per the above evaluation of the initiative while discussing about the CSV framework,
Netflix need to continue their initiative which aims to replace the diesel generator. By following
this they can be able to reduce the carbon emission and meet their sustainability goals. It will
help them to earn the faith of their customer which also means that they will be showing their
good interest in their services (Sila, 2022). Through which company will have the better
customer base, from this company will be able to earn revenues which they can proceed to help
the community as well. Other than this company can proceed to adopt the Kasigau corridor
project to protect the local community as well as to protect the wildlife.
SECTION B
2. critically discuss if CEMEX’s continuing success in Mexico has been the result of the
ownership of a chain of CEMENT and concrete production facilities.
CEMEX is a multinational and most popular brand founded in the year 1920 in Mexico, the
company produce building materials and it is located in various countries. The firm is
maintaining trade relations with around more than 90 nations, while providing high and good
quality goods and reliable service in order to satisfy its customers. The firm has annual sales of
14.92 billion USD, and providing employment to more than 40,000 staff members which is
located worldwide. This make the company successful as people consider it as a global industry
leader, particularly in manufacturing of cement and supply ready mix concrete globally.
According to Özcan, Mondragon and Harindranath, (2018), this company places high value on
innovation, sustainability and creativity and this strategy makes the company most popular brand
in last few years. In the year 1976, the firm began the systematic process of becoming a global

level player and achieved growth and development through acquisitions of other organisations
within the similar industry.
The company target customer segment which includes formal and informal sector such as
government agencies, large companies, school, colleges and universities. Also, the firm targets
low income people through its most popular Patrimonio hoy program. The firm used new and
advanced technologies in order to gain sustainable competitive advantages. By adopting
technical in-depth knowledge, the company provide high quality products or services to clients
and satisfy them with its 24*7 customer service facility. The focused on using disruptive and
sustaining model to satisfy the customer demands. Also, the firm adopt blue ocean strategy to
create its own market place. They have created its blue ocean market through their innovative
ideas, unique strategy, programs and services that combines the market expansion and profit
maximization.

Source: (CEMEX, Mexican global company, 2022)

The above mentioned figure shows about the achievement and sales distribution of CEMEX at
global level in the year 2013. In order to satisfy customer, the firm offers different types of
products or services with respect to materials related to cement. The company is famous for its
market strategy as it is the most popular and largest cement producer.
The products which has been produced by the company is developed and maintain to
participate in public infrastructure improvement, industrial construction, commercial level
construction and housing development. The material of cement can be used to construct building
and house or any other commercial property. Most of the company’s subsectors are really
sensitive in nature to business cycles and therefore they are positively interrelated to the industry
overall performance. Due to US financial crisis or COVID-19 crisis many company in the same
industry were highly impacted by global recession (Beekun and De Carvalho, 2021). Because of
this the company faced a lot of problems because they have taken a loan to avoid bankruptcy.
However, the company has adopted a various types of marketing strategy and different methods
to deal with difficult situation like financial crisis. By adopting strategy, the company become
successful and adapting to the ever changing business environment in the field of cement
industry.

Nowadays, many new cities and towns will need to be expanded to manage this migrants of
people and thus the demand of cement has been increasing with the increase in the population
and migration of people. The company has kept in mind about the increasing demand of cement
over the next decades, they have also focused on growth and opportunity in this industry. By
using strategy, the company help their clients to solve their building related problems which can
create issues. The strategy called as diverse product offering which means they have provided
services and products related to cement.
Cement is the highest selling product of the company which is a mixture of clay, iron ore
and limestone. The customer mostly use cement for construction and this material is used by
people worldwide. Another product is aggregates which are composed of geological materials
and have different types of applications and used in construction of railways, drainage systems,
and bridges. Last product of the company is concrete, which is the highest selling product, this is
basically strong in nature. This has been used for light reflection, capacity to store energy and
many more. The company also offers a different types of services that are tailored to their loyal
customer’s specific preferences and requirements globally. Also, they offer building solutions to
people in order to build sustainable structure focusing on the various categories like green
building solutions, housing and others (Ganapathy, 2018). In addition to this, CEMEX also
offers financial services, trading services and mobile solutions which allows them to easy
movement of goods and also for inventory management effectively. The firm also focuses on the
strategy and methods in order to satisfy its customers and key component of approach to
business is to achieve and accomplish task related operational efficiency. The company cement
production facilities were located in various areas like US, Mexico, Egypt, Spain and many
more. There were many changes done by the company in order to continue maximizing
operational efficiency such as completing a strategic outsourcing agreement with IBM. Also the
firm made various agreements with different company in order to optimize assets and develop
operational efficiency. Along with this, it will improve margins and help decrease the drag on
business profits. The company designed an aggressive strategy in order to reduce and eliminate
their carbon footprint which is beneficial for eco-friendly environment.

The above mentioned figure shows about the CEMEX sales in different region. The firm
focusing on strengthening their capital structure which is beneficial for their overall
performance. The management team of the firm is now concentrating on reducing debt,
regaining its financial position by adopting strategies and improving cash flow generation and
expanding business. Also, they improve value proposition by shifting and moving from selling
goods to selling complete solution related to cement for the same.
By adopting porters five forces which includes the study of threat of substitutes, new entries,
competitive rivalry, bargaining power of suppliers and customers, the firm has successfully
understood the external factors which can impact performance of company. Also, they focus on
market research and strategy used by its competitors like Holcim and Lafarge.

Source: (Nteta and Mushonga, 2021).
3. Christensen’s theory of disruptive innovation
Blockbuster a largest DVD rental company they failed to meet innovation in their product and
services due to their poor management, poor leadership found in work place environment cause
hindrance to follow the forward path. Lacking in innovation leads the firm to increase in high
rents and debts, services and product demand started decreasing. Company also got the chance to
buy the Netflix company but they never envisioned a future for streaming. It is the big failure, if
company had a skill full and knowledgeable work force then they might not have to see such a
vulnerable situation. Disruptive innovation has been buzzword since Clayton Christensen that
describe the way in which organization can set the new entrants in market and this can be disrupt
for developing better business. According to Christensen, disruptive innovation is the process

through which the smaller company can usually with their fewer resources is also able for facing
challenges that have been seems in business by entering at the bottom of their market
(Chakunnath and Panneerselvam. 2022). Along with this also keep them for working with
continuing to move into market and keep them for working with long term. The problem with
having conflating is about the disruptive innovation with having any break through changes in
organization and make sure for having their competitive pattern that could created in different
types of innovation which required for working with various strategic approaches.
This could keep for working learning succeeding as disruptive innovator and make them
for working with not apply for every company well in shifting market. Disruption, describes
about the process within that held in smaller company with allocated fewer resources and also
able for successfully challenges that developed incumbent business. Moreover, this also keeps
focus on improving organization product and services for having their most demanding customer
(Echambadi And et.al., 2022). If blockbuster also follows the disruption innovation then they can
be able to develop large market for them, and rule their industrial field. While for having such
things this is also important for taking some of the right steps and keep them for working with
well-developed concepts. Entrants that keep proving about the disruptive begin with the
successfully targeting as the organization is looking and gaining by delivering more suitable
functionally at having their lower prices. Along with this also move towards the up market and
delivering the better performance for their products and services, while mainstream about the
customer so start adopting the entrant in disruption which is occurred in organization.
According to this theory, Netflix financial and strategic which have keep their
achievement do not qualify the company about their genuinely although the company is almost
having the described that way. Disruptive innovation originate in low end or new market and
ensure them for having possible because they can started with having two types of market.
While this also help for improving the products and services and also keep their pay less
attention to less-demanding about customer. In facts, offering them with overshoot about the
performance that are being required for their latter. This also opens the door for the disrupter that
focused on providing that low end customer with having good enough products. In present times,
organization is working for their customer through which they can easily make sure for having
their effective concepts (Trisetyarso and Hastiadi, 2022). While having such things this could
provide the performance with that customer requirement and offering them with affordable

solution to individuals and some of their smaller organization and created in new market. It is
difficult for the organization in having claim about the low-end opportunities and services
provided with having needs of material number of customer by making their easy to use and
keep them for focusing on existing alternatives.
According to the Christensen’s, disruptive innovation enables the company to produce or
design the product by using the few resources that do not cost more, it helps the organisation to
offer the product at economical rate so that everyone in the market can easily buy it (Baudier,
Chang and Arami, 2022). Disruption innovation is not about making the products and services
better is about to deliver the product so public can easily access It and make it available for the
large public. Some characteristics of the disruption innovation are-
 It is about to making improvement in the product as to add more sustainable value
so that it maximises the sales in the existing market. It also about to deliver the
lower margin at initial stage.
 This strategy focuses on either disrupting the existing market by delivering
innovative product or to develop the new market segment for the existing product.
There are some requirement for this strategy as enabling technology, which refer as the approach
that aims to improve the whole process, with the help of this firms can easily design the
affordable product to deliver it into the broader market. Innovative business model is also
required as it usually targets the bottom tier consumer who are not able to afford the products.
Such segments do not benefited the well established companies (Coccia, 2022).
For an example Netflix company is the innovative disrupter, when there is a time for
VHS tapes and DVDs were rented by the customer in huge amount, from this Netflix company
saw the opportunity at that time they were new entrants. Company proceed to open the cater
which overlooked the online purchasers. They started utilising the internet power and offers the
product to the customer to use their DVD catalog on rent. This initiative took the company to
develop the maximum revenue for them also makes them a largest online streaming company of
all time. Therefore, if Blockbuster also proceed to make the innovation then there will be no
chance for the Netflix to successfully developed in the market.
Therefore this innovation form uses the innovative process which are mainly used to
convert the products and services into the affordable option so that everyone can avail it easily
(Sultana, Akter and Kyriazis, 2022). This strategy is usually a benefit for the new company and

for the start up firm who are looking for developing the good revenues for their organisation.
with the help of this organisations can easly examine their products and services, and understand
the customer requirement, so that they can easily proceed to make innovation in the product.
Through which company can easily look into their operational task so that they can make
improvement for their sustainable growth. As disruption allow the company to streamline their
product and services and to prepare the suitable strategy that compliments their work place and
will also allow them to follow the path of success.

REFERENCE
Ahmad, K., Fontaine, R. H. and Kedah, Z., Qassim Cement Company: A Case of Ethical
Management.
Baudier, P., Chang, V. and Arami, M., 2022. The Impacts of Blockchain on Innovation
Management: Sectoral Experiments. Journal of Innovation Economics
Management. 37(1). pp.1-8.
Beekun, B. and De Carvalho, Z., 2021. Effect of Strategic Management Strategies on
Performance of the Manufacturing Firms in Mexico. Journal of Strategic
management. 5(1). pp.30-39.
Chakunnath, M. and Panneerselvam, R., 2022. Can the Theory of Disruptive Innovation be
considered complete. IEEE Engineering Management Review.
Coccia, M., 2022. Innovation Strategies for Strategic Entrepreneurship in Ever-Increasing
Turbulent Markets. In Strategic Entrepreneurship (pp. 255-272). Springer, Cham.
de Sá Medeiros, H. and Forte, S.H.A.C., 2021. Rethinking State Social Responsibility With the
Creation of Shared Public Value. International Journal of Business Administration, 12(1).
Echambadi, R. And et.al., 2022. Launching an Online Business Program at Scale: A
Retrospective Case Study of Disruptive Innovation Before the Pandemic. Journal of
Management Education, p.10525629211067229.
Ganapathy, V., 2018. AN INCLUSIVE STRATEGY FOR THE POOR FINDS WIDER
APPLICATIONS. Journal of Global Economy. 14(1). pp.76-87.
Nteta, A. and Mushonga, J., 2021. Drivers and barriers to green supply chain management in the
South African cement industry. Journal of Transport and Supply Chain Management. 15.
p.17.
Özcan, G. B., Mondragon, A. E. C. and Harindranath, G., 2018. Strategic entry and operational
integration of emerging market firms: The case of Cemex, Beko and Tata Steel in the
UK. Journal of Business Research. 93. pp.242-254.
Rendtorff, J.D., 2022. Managing for the Common Good: Rethinking the Business Corporation
Beyond Profit-Maximization. In New Economies for Sustainability (pp. 177-196).
Springer, Cham.
Rubio-Andrés, M., del Mar Ramos-González, M. and Sastre-Castillo, M.Á., 2022. Driving
innovation management to create shared value and sustainable growth. Review of
Managerial Science, pp.1-31.

Shah, M.U. and Guild, P.D., 2022. Stakeholder engagement strategy of technology firms: A
review and applied view of stakeholder theory. Technovation. 114. p.102460.
Sila, I., 2022. A stakeholder view of quality management and CSR through feminist
ethics. Quality Management Journal. 29(1). pp.51-79.
Sultana, S., Akter, S. and Kyriazis, E., 2022. How data-driven innovation capability is shaping
the future of market agility and competitive performance?. Technological Forecasting
and Social Change. 174. p.121260.
Trisetyarso, A. and Hastiadi, F.F., 2022. Computational Model of Quadruple Helix Innovations
Ecosystem. Journal of the Knowledge Economy. pp.1-13.
Yamane, T. and Kaneko, S., 2022. The Sustainable Development Goals as new business norms:
A survey experiment on stakeholder preferences. Ecological Economics. 191. p.107236.
Online
Cemex, Mexican global company. 2022. [Online]. Available through:
<https://business.cornell.edu/hub/2018/11/19/emerging-markets-cemex-mexican/>