Assess the significance of corporate social responsibility (CSR) to PY's future profitability.

Mark scheme

Marking points from the official mark scheme (Feb/Mar 2019). The mark or mark type is shown in brackets.

1. [0] Definition of CSR: this concept applies to those businesses that consider the interests of society by taking responsibility for the impact of their decisions and activities on customers, employees, communities and the environment
2. [0] Examples of what CSR involves
3. [0] Benefits of CSR in terms of brand image and USP
4. [0] Drawbacks of CSR in terms of costs and damage if PY doesn't adhere to its CSR goals
5. [0] PY faces a number of CSR issues that could impact profitability
6. [0] Negative publicity over sugar content of frozen yoghurt
7. [0] Use of zero hour contracts
8. [0] Payment of employees
9. [0] Potential closure of three cafes
10. [0] Respond to the criticism and provide information to counteract the accusations if possible
11. [0] Increase advertising to counterbalance the bad publicity
12. [0] Change the products and reduce sugar content this could give PY a USP
13. [0] Introduce a policy on CSR to reassure customers and employees.
14. [0] Does PY need to change its marketing emphasis to reduce emphasis on healthy claims for their yoghurts?
15. [0] PY may need to change tactics due to potential impact on revenues due to change in public image and branding
16. [0] Impact on market share
17. [0] Impact on profits
18. [0] Benefits of CSR in terms of promoting brand image and increasing sales as a result
19. [0] How CSR can give PY a USP and ability to take more control over pricing and therefore increase profits
20. [0] Cost of CSR – higher wage costs, ingredient costs. Increased costs will reduce profit margins
21. [0] Danger of claiming a socially responsible approach if it is not followed in reality. This could lead to backlash and loss of image and sales
22. [0] Analysis of how PY's response to the documentary will impact sales and profits. PY may need to increase spending on marketing to counteract negative effects of bad publicity
23. [0] Judgement on the balance between costs and benefits of CSR to PY
24. [0] Significance may depend on competitor behaviour. Can PY afford not to take CSR seriously?
25. [0] There is a need for PY to address the issues highlighted by the documentary and social media reports. At the very least PY must deal with issue of minimum wage.