Greenandcompetitive 100117012641 Phpapp01


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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.