Seventh Generation (SG) of Colchester, Vermont, manufactures and markets "environmentally friendly" household products - vegetable-based, chlorine-free laundry products and non-toxic cleaners. Seventh Generation sells its products through natural-food outlets and direct mail catalogues. SG's CEO, Jeffrey Hollander, now believes that, to continue to grow, his company needs to appeal to a broader range of customers, and the only way to do this is to lower his prices. He has stated that, "The research that says people will pay more for socially responsible goods simply isn't true."
Hollander's plan is to reformulate SG's products and compromise on environmental purity. Environmentally harmful phosphates and chlorines will still be excluded, but cheaper petroleum-based cleaning agents will be substituted. These changes will allow a dish detergent's price to be lowered from $3.50 to $2.50. Also, the new formulas work better.
Hollander and his management team present this new strategy to the SG board and receive a lukewarm reception. In fact, two of the directors are strongly opposed to the change. Identify the key arguments for the new strategy and the key arguments against the new strategy.