Sharing Recipes for Staying Competitive - Sustainability ECR Thailand, October 2008 J ohn Jackson, Accenture
Accenture’s 2 moments of truth High  Performance Current  State Understanding High Performance Enabling High Performance D...
Our High Performance research programme has been recognized by the Harvard Business Review as one of the most important th...
High Performance = Outperforming Industry Peers to Create Enterprise Value Long-Term Perspective <ul><li>Economic cycles <...
We know what it takes to be a high performer…our understanding is based on analysis of over 6,000 companies.
Sustainability is  not the  driver of high performance, but leaders create value by aligning around three key building blo...
Changing business context is making it more difficult by impacting both supply and demand. The battle for  resources  & su...
Expectations are reshaping industry strategies and operating models as we reach a global tipping point. <ul><li>Knowledge ...
Shoppers are concerned… in Asia as much as in the West. Level of environmental concern Level of effort required in my coun...
And they  will  take action. Source: Accenture End-Consumer Survey on Environmental Issues in Retail, January 2008.  (Surv...
~45% of China’s shoppers ‘buy green’. “ Did you consciously purchase any environmentally friendly products in the last 60 ...
China’s shoppers lack information. “ Why don’t you purchase more environmentally friendly products?” Source: Accenture End...
However, most shoppers are still price-oriented. Source: Accenture End-Consumer Survey on Environmental Issues in Retail, ...
Yet they expect to pay a little more. “ What would you be prepared to pay for a more environmentally friendly product (foo...
And they expect  you  to tackle these issues… Source: Accenture End-Consumer Survey on Environmental Issues in Retail, Jan...
And they expect you to tackle these issues…TOGETHER. Raw Materials Production &  Packaging Packaging Materials Storage & D...
Sustainable development has become a burning platform for the Retail & Consumer Goods high performers. Less Certain / Long...
Sustainable Market Focus & Position… for your company or for your brands. “ Whole Foods, Whole People, Whole Planet” “ Pao...
Distinctive Capabilities… imbedding sustainability in your processes and practices Energy conservation infrastructure Supp...
Performance Anatomy... culture, leadership, people. Accenture Development Partnerships and Eco-teams China Computer Recycl...
How will you turn sustainability trends into competitive advantage? Revenues:  New products, brand and marketing etc Less ...
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Sharing Recipes for Staying Competitive – Sustainability

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Sharing Recipes for Staying Competitive – Sustainability

  1. 1. Sharing Recipes for Staying Competitive - Sustainability ECR Thailand, October 2008 J ohn Jackson, Accenture
  2. 2. Accenture’s 2 moments of truth High Performance Current State Understanding High Performance Enabling High Performance Descriptive Prescriptive <ul><ul><li>We examine more than 6,000 companies, including more than 500 that meet our criteria as high performers. </li></ul></ul><ul><ul><li>Our understanding includes the specific drivers of high performance across 34 industries </li></ul></ul>Identify Industry Drivers Synthesize Drivers to Client Diagnose Gaps Connect to Solutions/ Offerings Complete Transformation Journey
  3. 3. Our High Performance research programme has been recognized by the Harvard Business Review as one of the most important thought leadership initiatives “ [Accenture] now matches McKinsey’s share of the thought leadership market with 9% of the total” Source: White Space (Arkimeda) Harvard Business Review recognized Accenture’s High Performance Companies viewpoint as Top-10 research in the area of business performance Source: Harvard Business Review Jul-Aug 2005 Accenture High Performance Business Framework
  4. 4. High Performance = Outperforming Industry Peers to Create Enterprise Value Long-Term Perspective <ul><li>Economic cycles </li></ul><ul><li>Industry cycles </li></ul><ul><li>Leadership generations </li></ul>Performance Dimensions <ul><li>Growth </li></ul><ul><li>Profitability </li></ul><ul><li>Future positioning </li></ul><ul><li>Longevity </li></ul><ul><li>Consistency </li></ul>
  5. 5. We know what it takes to be a high performer…our understanding is based on analysis of over 6,000 companies.
  6. 6. Sustainability is not the driver of high performance, but leaders create value by aligning around three key building blocks.
  7. 7. Changing business context is making it more difficult by impacting both supply and demand. The battle for resources & sustainability The new map of innovation Emerging consumers War for talent The flow of capital Economic openness Size & reach of multinationals Technology
  8. 8. Expectations are reshaping industry strategies and operating models as we reach a global tipping point. <ul><li>Knowledge of specific consequences is growing and becoming mainstream </li></ul><ul><li>Governing bodies are mandating action at various levels </li></ul><ul><li>Institutional investors are demanding visibility into climate change-related activities </li></ul><ul><li>Major banks are factoring carbon risks into their lending, valuation and underwriting criteria </li></ul><ul><li>Employees and potential employees are favoring employers who take action </li></ul><ul><li>Leading companies are naming Chief Climate / Sustainability Officers </li></ul><ul><li>Customers are favoring suppliers who take action </li></ul><ul><li>Addressing climate change is increasingly viewed as “pro-growth” </li></ul>
  9. 9. Shoppers are concerned… in Asia as much as in the West. Level of environmental concern Level of effort required in my country Individuals must address climate change Individuals who already take concrete action 98% 81% 78% 85% 90% 76% 73% 82% 82% 63% 54% 71% 93% 84% 86% 86% 73% 72% 63% 81% China UK Germany Average 14 Countries 1 US Source: Accenture End-Consumer Survey on Climate Change, 2007 Note 1: Nordic, France, Ger, Italy, Neth., Spain, UK, Canada, US, Japan, Australia, Brazil, India, China
  10. 10. And they will take action. Source: Accenture End-Consumer Survey on Environmental Issues in Retail, January 2008. (Survey of ~600 shoppers in Beijing, Shanghai, Guangzhou, Xian, Changsha and Wuhan.) Purchase products with less packaging Do not use plastic bags Purchase re-cycled products None, consciously 63% 46% 40% 28% 24% 21% 17% Returning recyclable goods Frequent environmentally friendly retailers Purchase locally sourced products Use public transport / avoid travelling by car 8% “ What actions do you take personally, to address environmental concerns?”
  11. 11. ~45% of China’s shoppers ‘buy green’. “ Did you consciously purchase any environmentally friendly products in the last 60 days? What products did you purchase?” Source: Accenture End-Consumer Survey on Environmental Issues in Retail, January 2008. (Survey of ~600 shoppers in Beijing, Shanghai, Guangzhou, Xian, Changsha and Wuhan.) Top three categories # of 591 respondents
  12. 12. China’s shoppers lack information. “ Why don’t you purchase more environmentally friendly products?” Source: Accenture End-Consumer Survey on Environmental Issues in Retail, January 2008. (Survey of ~600 shoppers in Beijing, Shanghai, Guangzhou, Xian, Changsha and Wuhan.) Note 1: Interviews with Chinese grocery retailers, March 2008. <ul><li>Shoppers claim retailers don’t provide information about a product’s ‘greenness’. </li></ul><ul><li>Retailers agree – they claim they do not have reliable data from suppliers in order to make green claims 1 </li></ul><ul><li>Only 5% say it is because: </li></ul><ul><ul><li>Environmentally friendly products are too expensive </li></ul></ul><ul><ul><li>No ‘green products’ are available at all </li></ul></ul>
  13. 13. However, most shoppers are still price-oriented. Source: Accenture End-Consumer Survey on Environmental Issues in Retail, January 2008. (Survey of ~600 shoppers in Beijing, Shanghai, Guangzhou, Xian, Changsha and Wuhan.) “ When choosing your retailer, how important are the following considerations?” Average score. Responses ranked from 1 to 6 (6 being the most important)
  14. 14. Yet they expect to pay a little more. “ What would you be prepared to pay for a more environmentally friendly product (food, apparel and appliances)?” Source: Accenture End-Consumer Survey on Environmental Issues in Retail, January 2008. (Survey of ~600 shoppers in Beijing, Shanghai, Guangzhou, Xian, Changsha and Wuhan.) Over 50% more 30- 50% more 10-30 % more Nothing more 5-10 % more 1-5 % more Expect it to be less For all products, most respondents’ acceptable price 1~10% more expensive than the price for a similar, less environmentally friendly product. Customers are prepared to pay a greater premium for environmentally friendly household appliances than apparel or food.
  15. 15. And they expect you to tackle these issues… Source: Accenture End-Consumer Survey on Environmental Issues in Retail, January 2008. (Survey of ~600 shoppers in Beijing, Shanghai, Guangzhou, Xian, Changsha and Wuhan.) “ Who would you trust to give you guidance on how to make a difference?” Average score. Responses ranked from 1 to 6 (6 being the most important) “ Whose responsibility is it to tackle environmental problems?” Average score. Responses ranked from 1 to 6 (6 being the most important)
  16. 16. And they expect you to tackle these issues…TOGETHER. Raw Materials Production & Packaging Packaging Materials Storage & Dist Waste & Recycling Head Office Retailer DC Supplier / Consolidator DC Milling & Processing Centres Stores Packaging Farms Supplier / Consolidator DC Office/ Travel Retailers have Indirect Control and little or no visibility of flow , process or data Retailers have Direct Control and very good visibility of process and operating data kWh / unit kg-km per item 39% 29% 14% 12% 3% Total Carbon Footprint
  17. 17. Sustainable development has become a burning platform for the Retail & Consumer Goods high performers. Less Certain / Long Term Certain / Short-term Reduce negative Increase positive Grow Revenue – new/differentiated products & services <ul><ul><li>Consumers in emerging markets including fast growing middle class and ‘Bottom of the pyramid’ ( 4 billion people with an economy of $13 trillion PPP) </li></ul></ul><ul><ul><li>Green and fair trade products are still a niche opportunity (£285m market UK in 2006 for the latter) but can command premium prices </li></ul></ul><ul><ul><li>New products such as Health and wellness product lines respond to modern lifestyle demands and growing obesity issues ( health and wellness product global sales expected to reach US$127 billion by 2010) </li></ul></ul>Reduce Cost – increase resource efficiency, lower emissions <ul><ul><li>Reductions in operational costs , for example through Carbon and energy management, and waste management </li></ul></ul>Manage Risk – regulatory and operational <ul><ul><li>Increasing global, national and regional regulation (Kyoto Protocol & post EU ETS targets phase II (2012)) </li></ul></ul><ul><ul><li>Management of stakeholder and investor expectations (The Carbon Principles, Dow Jones SI, FTSE 4 Good) </li></ul></ul><ul><ul><li>Collaboration with local governments and communities is fundamental to secure licence to operate, especially in emerging markets </li></ul></ul><ul><ul><li>Sustainable sourcing extends the supply chain beyond tier 1 suppliers </li></ul></ul><ul><ul><li>Eco-labelling is in its infancy but is being piloted by CGS companies and retailers </li></ul></ul>Build intangible assets – brand reputation, networks <ul><ul><li>War for Talent - attract and retain high calibre sustainability-conscious employees (75% of MBA students from top schools were willing to accept 10-20% lower salary to work for a ‘responsible’ company) </li></ul></ul><ul><ul><li>Reputation - building and maintaining consumer trust </li></ul></ul>
  18. 18. Sustainable Market Focus & Position… for your company or for your brands. “ Whole Foods, Whole People, Whole Planet” “ Pao de Acucar Verde” Enabling Consumers to be Green
  19. 19. Distinctive Capabilities… imbedding sustainability in your processes and practices Energy conservation infrastructure Supply Chain Efficiency Network consolidation to reduce carbon footprint Eco-labeling Global Mass Retailer European Electronics Retailer
  20. 20. Performance Anatomy... culture, leadership, people. Accenture Development Partnerships and Eco-teams China Computer Recycling Do No Evil
  21. 21. How will you turn sustainability trends into competitive advantage? Revenues: New products, brand and marketing etc Less Certain / Long Term Certain / Short-term Reduce negative Increase positive Intangible assets: Reputation, networks, license to operate / innovate etc Risks: Regulatory, physical, supply chain, product etc Cost reduction: Eco-efficiency, productivity gains etc Strategic Framework for Sustainability Sources: Accenture Research, Dan Esty - ‘Green to Gold’ Go it alone Competitive Strategy options Collaborate in partnerships and clusters Collaborate at an industry level Shape regulation and policy

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