Are they effective? How many cases can you think of where boycotts were well-organized and substantial that a major company had to 'give in' and look silly at the end? I am actually doing a study on this and wanted to get some feedback from you guys. It seems like they are 'rarely' effective in bringing about the desired outcome, yet heavily utilized (much like economic sanctions, but that's even more ineffective...but I digress). This is one example I can think of that was a result of Middle Eastern boycotts for Danish dairy products, which apparently worked... http://en.wikipedia.org/wiki/Arla_Foods Arla's sales were seriously affected by a boycott of Danish products in the Middle East in 2006. Transnational anger among Muslims over satirical cartoons of Muhammed was the immediate cause of this. After the Danish government refused to condemn the cartoons or meet with eleven concerned ambassadors from Muslim nations, a boycott was organized, starting in Saudi Arabia and spreading across the Middle East. The Middle East is Arla's largest market outside of Europe. On 2006-02-03, the company said that sales in the Middle East had stopped completely, costing the company two million US$ a day[4]. Soon after the boycott began to affect Arla's sales, the Danish government met with Muslim ambassadors, and the newspaper and the government issued apologetic statements. Unfortunately for Arla, the boycott continued undiminished for some time. In March 2006, Arla took out full-page advertising in Saudi Arabia, apologizing for the cartoons and indicating Arla's great respect for Islam in the country. This raised controversy back in Denmark, where women's organizations and some Danish politicians criticized Arla, and called on Danish women to boycott Arla's products in Denmark. In April 2006, the company said that its products are being placed back in stores in the Middle East. Before the boycott, it supplied 50,000 stores in the area. It announced that many of its largest clients in Saudi Arabia would start selling its butter and cheese on April 8[clarify]. Arla has started sponsoring humanitarian causes in the Middle East in order to reduce bad feelings from consumers.
I guess it depends if the boycotted company contributes significantly to the companies' hq country gdp and the boycotting country is where the company makes most of its business from..
Obviously. It also seems to depend largely on the availability of a suitable alternative in the target market. So if, say, Saudi Arabia (which is one of GM's largest markets) decided to 'boycott' GM products, they can still buy Ford's and Toyota's and Honda's and have a major impact on GM's bottom line. So since it obviously depends largely on the perceived 'effect' it would have on the company's bottom line, would you still join a business boycott based on just principle, even if you knew the company couldn't care less and can easily absorb the hit? Also, what other considerations would the company have to take into account outside of the financial impact a boycott would have on its business? Do 'potential markets' play a role here? What if you're a MNC and you have a global 'image' to protect, does that factor into your calculus? While I will concede that most business behavior can be explained from a financial costs perspective, some times it isn't as apparent.
I think it can be very effective. Activist groups have moved from protesting companies to protesting businesses because they will buckle more easily under pressure. And, it works best on companies that rely heavily on a strong brand. Nike caved in on the sweatshop issue because of public pressure. A lot of oil industries have caved on environmental issues due to pressure (the Brent Spar incident for Shell is a famous one). Companies doing business with Myanmar have conceded to pressure. I think the boycott of Disney had an impact on that company's behavior as well. These weren't all boycotts but public pressure, generally. There is an article I have at home about Corporate Social Responsibility that describes a 5-step process of social enlightenment for companies: (1) Surprise/backlash to criticism for something they didn't think they were responsible for, (2) A begrudging minimal effort to appease complainers, (3) An acceptance of the responsibility, and a systematic approach to dealing with it, (4) An attempt to turn this new responsibility into a competitive advantage over other players in the market, and sometimes (5) turning the responsibility into a strategic driver for the company. Whatever the article is called, I recommend it. That may work out to still be "rarely effective" since most attempts to bring pressure are probably half-assed.
