Evaluate the impact on OV of the growing importance of sustainability.

Mark scheme

Marking points from the official mark scheme (May/June 2023). The mark or mark type is shown in brackets.

1. [1] Sustainability refers to activities that meet the needs of the present without compromising the ability of future generations to meet their needs.
2. [1] Link to corporate social responsibility.
3. [1] Need to consider environmental impact when making decisions to demonstrate commitment to sustainability.
4. [1] Increased costs (as an impact of sustainability importance).
5. [1] Enhance brand image (as an impact of sustainability importance).
6. [1] Support increase in price (as an impact of sustainability importance).
7. [1] Sourcing of supplies (as an impact of sustainability importance).
8. [1] Mission statement commitment.
9. [1] Organic nature of the product – more environmentally sustainable.
10. [1] Negative publicity regarding Greek yogurts regarding damage to environment: acid whey, water usage, sale of acid whey to farmers.
11. [1] Sustainability of distribution direct to consumer.
12. [1] Link to CSR – OV gives 5% of its profits to educational projects in low-income countries.
13. [1] Increasingly competitive market.
14. [1] Reference to development of plant-based yogurts.
15. [1] Using local suppliers of milk to reduce the carbon footprint of transport.
16. [1] Will affect all strategic decisions as OV will need to consider the environmental impact (e.g., new factory, materials, energy efficiency)
17. [1] ...This will impact costs.
18. [1] Need to conduct environmental audits to measure impact of OV and provide evidence of commitment to sustainability
19. [1] ...Otherwise, the business may be open to criticism of greenwashing.
20. [1] Need to reduce carbon footprint will mean that OV has to change distribution channels of individual deliveries to consumers.
21. [1] Can OV continue to sell acid whey to farmers? Cost of not doing so. Stockpiling of acid whey will increase costs.
22. [1] R & D into alternative uses of acid whey will lead to an increases in costs.
23. [1] Benefits of sustainability in terms of promoting brand image
24. [1] ...and increasing sales as a result.
25. [1] How sustainability can give OV a USP and ability to take more control over pricing
26. [1] ...and therefore increase profits.
27. [1] Cost of sustainability – ingredient costs.
28. [1] Increased costs will reduce profit margins
29. [1] ...and could therefore reduce profit.
30. [1] Danger of claiming a sustainable approach if it is not followed.
31. [1] This could lead to backlash and loss of image
32. [1] ...and therefore sales.
33. [1] Judgement on the balance between costs and benefits of sustainability to OV.
34. [1] Significance may depend on competitor behaviour.
35. [1] Can OV afford not to take sustainability seriously?
36. [1] Given the OV's mission statement there is a need for OV to address the issues highlighted by the newspaper report.
37. [1] Risk of future legal changes to protect the environment so might be important to make product/production changes before these are proposed or introduced.