MAS Holdings: Leveraging Corporate Responsibility
As a contract manufacturer of intimate apparel, sportswear and casual wear for brands such as Victoria’s Secret, Nike and Marks & Spencer, MAS Holdings of Sri Lanka had made a concerted investment in being a socially responsible company. However, other garment suppliers in direct competition did not necessarily adhere to the same standards. Thus, MAS found itself constantly squeezed when it came to costs. How could it remain committed to the cause and at the same time ensure that its efforts in corporate social responsibility (CSR) paid off? How could the company stay competitive when other vendors focused exclusively on achieving lowest cost? MAS was wondering if , its Women Go Beyond program could be leveraged to build its own brand? Was this the silver bullet that it was looking for?
Faced with the reality of the textile manufacturing marketplace, where companies tended to choose manufacturers on the basis of cost advantages, MAS needed to decide on the next move. In particular, it had to decide if it wanted to try to reach the end consumer and build a brand in their mind to be able to have some power in the pricing of its products. If reaching the end consumer is the way to go, it is important to articulate how this can be done, given the limited budget of MAS Holdings. The case offers an interesting possibility of including a special MAS label in the items it produces for its global brand owning customers. The question is, is this possible and, if so, how? Thus, this case offers the opportunity to discuss an interesting avenue for how a contract manufacturer can try to gain some pricing power—through ingredient branding. This case also facilitates a discussion of how one can potentially convert a philosophy of “doing good” into a profitable differentiator.