This document discusses how companies can pursue a "Green Ocean" competitive strategy through sustainability initiatives. It provides two examples - office furniture company Herman Miller and car rental company Enterprise. Both companies set ambitious sustainability goals that differentiated their products and brands in the market. Herman Miller committed to zero waste and 100% green energy by 2020. Enterprise launched a large fleet of hybrid vehicles, sustainable construction practices, and invested $100 million in algae biofuels. Pursuing a Green Ocean strategy through outrageous sustainability goals can help companies create uncontested market space and make competitors irrelevant.

1. Green Ocean
Competitive Strategies
Susan Sheehan
June 10, 2010

2. “ There is no end to the amount of money to be made by
doing the right thing.”
Bill Clinton, 2007

3. today
o Companies do ‘sustainability’ for competitive advantage
o Blue Ocean Strategy….Green Ocean
o 2 Green Ocean examples

4. CEOs and sustainability
Top two reasons for sustainability strategy
Not compliance, risk or cost
◦ Improve Brand (54%)
◦ Differentiate Products (50%)
AT Kearny &
Institute for Supply Chain Management

5. 5
Sustainability delivers value
o >70% of executives said sustainability contributes to
shareholder value
o >70% rank sustainability as very or extremely important to
corporate reputation and brand
McKinsey & Company, 2010

6. Competitive strategy?
>70% CEOs say sustainability should be STRATEGIC
<20% are doing it
The math looks good!

7. How to create
uncontested
market space
and make the
competition
irrelevant…

8. Red vs. Blue Oceans…
• Focus on core market Create uncontested
• Beat the competition market space
• Combat ‘commoditization’ Make the competition
• Keep your customers irrelevant
• Choose low cost or
Find ‘non-customers’
differentiation
• Set realistic goals and micro- Pursue differentiation
manage AND low cost
• Death by a thousand cuts! Set outrageous goals
and set your people
loose!

9. Set outrageous goals
“…do all this, and do it right, and do it first
before this decade is out.”
J.F.K. 1962

10. Create uncontested market space

11. Low cost AND differentiation

12. Serve non-customers

15. 2000’s
Reinvented systems
furniture

16. “be a good corporate neighbor by being a good
steward of the environment”

17. Dirk Jan De Pree (DJ)
1955
Herman Miller, Founder

18. 2020 Commitment – crazy goals
ZERO
• landfill
• hazardous waste generation
• air emissions
• water emissions
• Minimum LEED Silver
• 100% green energy

19. the mirra®
outrageous goals
non-customers

20. Herman Miller a Green Ocean Winner?
In the past year….
23rd year most admired company in its industry
Fortune Magazine poll of industry executives and analysts
One of world’s 50 Most Innovative Companies
Fast Company
One of 50 Best Manufacturing Companies
Industry Week
"SAM Sector Leader" and "SAM Sector Mover”
SAM Social Investing global ranking

21. Green Ocean
2nd largest office furniture company
in the world; $1.92B sales
A few crazy ideas
Red Ocean

23. “Serve our communities as a committed corporate citizen.”

24. 26

25. Auto Industry
Revolution
Auto
Crash &
Fuel Costs
Green
Ocean

26. Chairman’s Task Force on Sustainability -2008
o Cut energy 20% in 5 years
o Empower branch managers

27. Fleet Alternatives
o World’s largest fleet of fuel efficient vehicles
o Thousands of hybrids and electric vehicles
o Fleet as 'petri dish' for fuel and engine technology

28. Sustainable Construction
 LOW COST AND DIFFERENTIATION

29. WeCar Sharing
 Non-Customers

30. Carbon Offset Program
o $1.25 per rental, matched by
Enterprise Foundation

31. 50 million, 5 year
Tree Pledge

32. Enterprise Institute for Renewable Fuels
o $100 M fund
o Algae biofuels PHDs
o Goal – large scale supply of biofuel

33. Green Ocean ahead?
Last 12 months
o Business Traveler Innovation Award for outstanding
and original environmental efforts in the travel
industry;
National Business Travel Ass./Wall Street Journal
o Readers’ Choice Award as their favourite rental car
brand
Budget Travel Magazine

35. Think Green Ocean
o Irrational, right brain thinking
o unachievable goals
o non-customers
o create uncontested green ocean markets

36. Susan Sheehan
Leapfrog Sustainability Hub
416-598-7585
susansheehan@leapfroghub.com