Morillion and Kopp founded Veja, an eco-sneaker company to serve the ethical fashion industry. This case focuses on the development of sustainable business practices in organic cotton, natural rubber and leather. Veja shows that they can create a product that is both appealing and conscientious. The company grew rapidly due to praise from the media and word of mouth. What leads to their success is the fact that they can integrate sustainable practices into a holistic and ever improving offering, which engages multiple supply chain participants (employees, consumers, suppliers, partners, even artists) in co-devising a value proposition that appeals not just to our sense of fashion, but also to our conscience.
II. Challenges and Opportunities
Veja encountered challenges due to their small-scale operation at first and the inherent fierce competition from big players in the market. Customers expect ethical products in the first place, so having eco-shoes in Veja’s production line may raise unnecessary costs. Since Veja does not spend on advertising, they may not be able to get the message to the customers that their stores are different from everyone else. In addition, supply for organic materials such as cotton and rubber are limited, which may hinder Veja’s future growth and interrupt their supply chain should adverse weather affect their sources.
However, being the few players in the ethical fashion industry, Veja enjoy their first-mover advantage of selecting the finest suppliers. Also, Veja entered the market at the right time because this niche market is growing at a fast rate. Customers are also embracing the green lifestyle and being more aware of ethical fashion. In addition, the corporate culture at Veja allows the employees to be happy, which in turn contribute to the success of the company.
III. Veja’s business model vs. conventional model
Veja’s business model resembles that of a small business with an entrepreneurial...