SUSTAINABLE BUSINESS MODEL FOR ORGANIC AGRICULTURE - LEE ZEN ORGANIC CORPORATION IN TAIWAN

Studies have shown that consumer goodwill is often renewable at little cost. Firms are more interested in direct marketing when it allows them to capitalize on consumer goodwill. Other studies have shown that firms which practice corporate social responsibility have a marketing edge. Another body of research emphasizes the importance of product quality in earning consumer loyalty and goodwill. The difficulty for consumers wishing to buy organic products is the veracity of the firms’ organic claims. There are multiple channels for marketing organic products in Taiwan, including specialty shops, supermarkets and chain stores. Lee Zen is a successful supply chain growing exponentially in Taiwan. It currently has 160 ha of land, 433 accredited farmers, three logistics centres and 76 stores selling fresh organic produce and processed food. The purpose of this study is to investigate the factors contributing to the sustainability of the chain, including production, marketing and distribution. The results show that Lee Zen has been able to earn considerable consumer goodwill through its practice of corporate social respon¬sibility. On the supply side, Lee Zen is trusted by contract farmers and consumers for their organic practices. The company’s success can be attributed to the wheel of wellness theory, the principle of enlightened business, Senge’s mental model, and the Confucian individual success model. This study indicates that the supply, marketing and distribution of organic products requires the trust of producers, retailers and consumers who all benefit from having a vision that is ethical and socially respon-sible.