1. The philosophy at Alta Gracia can lower costs in the long run. They target their brand to colleges due to the fact that they are all about fair labor and there are many organizations within colleges that support this. Also colleges often have disputes with other companies such as Reebok and Nike. If Alta Gracia continues to thrive their popularity will increase and they will sell more of their items. If they get popular enough in the long run more individuals will support and buy theirs products and the demand will become higher. If the demand increases then they will be able to increase their prices and lower their cost in the long run.
2. I do not believe Joseph Bozich would be able to attempt the Alta Gracia Experiment if they were a publicly traded enterprise. Mainly because Joseph had his own personal reasons for wanting to do this experiment. If the company were publicly traded I do not believe the majority of the holders would share Josephs views and I strongly believe that they would not want to increase the costs of making their products.
3. I think that there are a few items that can stand in the way of the succession of Alta Gracia. One being the high costs, if they do not maintain their popularity amongst colleges the company could potentially suffer. Which leads me to the next impediment, which is competition. If there another company is established which has the same values but somehow manages to have lower prices then Alta Gracia could suffer losses. I think the best thing Alta Gracia can do to minimize risk of failure is to keep satisfying their customers by keeping them informed of how they treat their workers. This idea is the main driving force of this brand and the main reason why so many college students chose to buy their product. Then could also increase their advertising or attempt to find an additional focus group other than colleges as their main means of profit.
4. If the company tried to sell to the mass market through retailers such as Walmart I do not think he would be successful. The main reason of his success are the colleges and the only reason they want to pay more fore these products is because of the ethical values they represent, and college students are usually more aware of these issues than compared to others. Individuals shop at Walmart because they cheaper products and the customers only concern is low price. They do not really care where the product came from or how it was made, they are just interested in the low price. So Josephs products would be too expensive to sell at Walmart.
5. I feel that it is somewhat ethical because if there are areas in the world where there are people willing to work for less than living wages that means that really have no choice. So ultimately it comes down to them making a small amount of money or no money at all. I think this is how big companies justify their low labor costs. If the alternative was to not produce at all then this would push companies to find these low cost labor areas because no products equals no profits.
6. The Alta Gracia experiment suggests that good ethics are also good practices to the extent of a selective market and the company has to have a history of success as well. The only reason he was able to conduct this experiment was because he was already successful and had the money to do it. Also it was privately owned so he made all the decisions and if it were not for this I do not believe there would have been a consensus of employees of a public enterprise that would vote for such action. There are hundreds of businesses who to not practice good ethics yet they are still very successful.
Courtney from Study Moose
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