Green and Competitive
          Ending the stalemate
The Dilemma



Does going green mean companies have
        to be less competitive?
Opposing Views


    Costly                  Responsibility
    • Preventive measures   • Social benefits
    • Implementa...
Traditional Views On Going Green

      Stricter regulations mean higher cost
      required to achieve compliance.

     ...
The Current Situation



   Are there any changes from the
          traditional view?
Survey Results



                                          Say green issues have

 58%                                   ...
Survey Results



                                          Believe that employees

 47%                                  ...
Survey Results



                                          Of the companies have an

 44%                                ...
Green Energy Projected Growth

                                              Market growth from 2006 to 2016
   Biofuels  ...
Change Factors: The 6 C’s

                       Costs

                      Capital

                    Competition

 ...
The Green Advantage


          Generate cost savings.
          Promote innovation.
          Command premium pricing.
  ...
Putting It Into Action



 What strategies can firms employ to
    gain the green advantage?
Competitive Environmental Strategies
                         Lower Costs
 Competitive Advantage




                     ...
Strategy 1: Eco-Efficiency


            Savings through eco-efficiency practices.
            This strategy generates sav...
Strategy 1: An Example




          Over 50% in savings by changing from
    incandescent light bulbs to energy saving li...
Strategy 2: Beyond Compliance Leadership


             Acknowledgement from public and
             customers for their e...
Strategy 3: Eco Branding

             Consumers must be willing to pay for
             the ecological differentiation.
 ...
Strategy 3: An Example




 Switzerland hailed Toyota Prius as the world’s greenest
  car. The Prius has sold over 1 milli...
Strategy 4: Environmental Cost Leadership

             Production of cost competitive
             products with environm...
Strategy 4: An Example




  Cost savings and waste reduction through packaging design
Strategy Framework Review


              Boundaries between the strategies
              are hypothetical.
              ...
Conclusion


              Change factors have increased attention
                   on environmental practices

        ...
Questions


            “We do not inherit the earth from
            our ancestors, we borrow it from
            our chi...
References

 Ron Pernick, Clint Wilder. (2007). The clean tech revolution. New York (NY)
 Lucy Phillips. (2007). Go green ...
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Greenandcompetitive 100117012641 Phpapp01

  1. 1. Green and Competitive Ending the stalemate
  2. 2. The Dilemma Does going green mean companies have to be less competitive?
  3. 3. Opposing Views Costly Responsibility • Preventive measures • Social benefits • Implementation cost • Social responsibility • Non compliance cost • Sustainable growth
  4. 4. Traditional Views On Going Green Stricter regulations mean higher cost required to achieve compliance. Environment concerns limit firm’s freedom when coming up with innovations. It raises production cost and generate no profit to the business.
  5. 5. The Current Situation Are there any changes from the traditional view?
  6. 6. Survey Results Say green issues have 58% become more important to their organization strategy. *Source: KPMG Labour Market Outlook summer 2007 survey conducted on 1,000 HR professionals
  7. 7. Survey Results Believe that employees 47% prefer to work for firms with a strong green stance. *Source: KPMG Labour Market Outlook summer 2007 survey conducted on 1,000 HR professionals
  8. 8. Survey Results Of the companies have an 44% environmental policy in place. *Source: KPMG Labour Market Outlook summer 2007 survey conducted on 1,000 HR professionals
  9. 9. Green Energy Projected Growth Market growth from 2006 to 2016 Biofuels 20.5 80.9 (In $US Billions) Fuel Cells 1.4 15.6 Solar Power 15.6 69.3 2006 Wind Power 17.9 60.8 2016 Total 55.4 226.5 0 50 100 150 200 250 300 Source: Clean Edge, 2007
  10. 10. Change Factors: The 6 C’s Costs Capital Competition China Consumers Climate
  11. 11. The Green Advantage Generate cost savings. Promote innovation. Command premium pricing. Enhance the brand image. Differentiate from competitors.
  12. 12. Putting It Into Action What strategies can firms employ to gain the green advantage?
  13. 13. Competitive Environmental Strategies Lower Costs Competitive Advantage Environmental Cost Eco-Efficiency Leadership Differentiation Beyond Compliance Eco-Branding Leadership Organizational Process Products and Services Competitive Focus
  14. 14. Strategy 1: Eco-Efficiency Savings through eco-efficiency practices. This strategy generates savings in virtually every firm. It is an internal initiative as consumers will not pay for environmental protection.
  15. 15. Strategy 1: An Example Over 50% in savings by changing from incandescent light bulbs to energy saving light bulbs
  16. 16. Strategy 2: Beyond Compliance Leadership Acknowledgement from public and customers for their efforts. Substantial investment required for certification and publicity efforts. Beyond compliance practices can give suppliers an edge over others.
  17. 17. Strategy 3: Eco Branding Consumers must be willing to pay for the ecological differentiation. Reliable information about product environmental performance must be available to consumers. Differentiation should be difficult to be imitated.
  18. 18. Strategy 3: An Example Switzerland hailed Toyota Prius as the world’s greenest car. The Prius has sold over 1 million units worldwide
  19. 19. Strategy 4: Environmental Cost Leadership Production of cost competitive products with environmental attributes built-in. Radical product innovation such as material substitution, packaging, etc. Better product design results in more efficient use of resources which translates to lower price.
  20. 20. Strategy 4: An Example Cost savings and waste reduction through packaging design
  21. 21. Strategy Framework Review Boundaries between the strategies are hypothetical. Distinction however allows better analysis and helps in finding opportunities beyond the “low lying fruits”.
  22. 22. Conclusion Change factors have increased attention on environmental practices Being green can be a new competitive advantage. Firms can adopt different strategies to gain the green advantage.
  23. 23. Questions “We do not inherit the earth from our ancestors, we borrow it from our children.” Unknown
  24. 24. References Ron Pernick, Clint Wilder. (2007). The clean tech revolution. New York (NY) Lucy Phillips. (2007). Go green to gain the edge over rivals. People Management, 9. Michael E.Porter, Class van der Linde. (1995). Green and competitive. Ending the stalemate. Harvard Review, 120-134. Renato J.Orsato. (2006). Competitive environmental strategies: When does it pay to be green? California Management Review, Vol 48, 127-143.
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