Environmental Business Strategy Flashcards
How can businesses achieve competitive advantage through environmentally friendly business practices?
- Ensure that they remain competitive and differentiate themselves from competitors
- Necessitates the classification of environmentally friendly investment according to their potential to become sources of CA
What are the different business level strategies?
Cost leadership - having lower costs than competitors + EOS = influence on consumption patterns through bargains e.g Lidl, Walmart
Product differentiation - offering a different product, pushing a specific attribute
E.G Apple - social status, Tesla - promoting eco-friendly electric cars; not actually try
What does RBV theory say about gaining sustainable competitive advantage?
Firms can gain sustainable competitive advantage if their resources add value, are rare, inimitable and organised to capture value
How can organisations ensure that they are valuable in terms of sustainable competitive advantage?
Implement strategies that improve efficiency and effectiveness
e.g Adoption of new production system that reduces CO2 emissions and improves production effectiveness
What is the difference between efficiency and effectiveness?
Effectiveness - doing the right things, right goals e.g minimise CO2 emissions without considering cost (inefficient)
Efficiency - doing things right e.g pursing the right goals such as minimising CO2 and minimising cost
How can organisations ensure that they are rare in terms of sustainable competitive advantage?
First adopters of ISO4001, ISO50001 (most widely used energy efficiency standard)
First mover advantages
How can organisations ensure that they are imperfectly inimitable in terms of sustainable competitive advantage?
Focus on competencies not easily implemented by others e.g Organisational culture - Google
How can organisations ensure that they are organised to capture value in terms of sustainable competitive advantage?
Resources do not confer CA if they are not organised
Related to economies of scope
Ensuring ISOxxxs comeplement each other to maximise benefits: some off them overlap, need to invest resources efficiently
What is the matrix for building competitive advantage through environmentally friendly business practices (Orsato, 2006)?
Eco efficiency (low cost, organisational processionals focus)
Environmental cost leadership (low cost, product focus)
Beyond compliance leadership (differentiation focus, organisational process focus)
Eco-branding (differentiation focus, product focus)
What is the eco efficiency strategy?
- Productivity important
- Innovation a key factor in transforming costs into profits and enhancing competitiveness
- Waste = inefficient way of managing resources
- Focus on materials savings, increase process yields, better utilisation of by-products
- Need to invest in R+D in order to reintroduce resources into production process
What is the case study of DuPoint (US manufacturer of food, healthcare products, clothing, hardware and electronics) as an eco-friendly strategy?
- Mission to achieve sustainable growth: increasing shareholder and societal value while decreasing footprint in the value chain
- Reduce consumption of raw materials and energy, integrate science to create products with greater value and lower environmental impact, engage stakeholders
What is the environmental cost leadership strategy?
- Achieving cost leadership and environmental sustainability
How is Colgate-Palmolive using environmental cost leadership strategy through people, planet and performance?
- People: uses consumers’ preferences to generate products according to their needs
- Performance: Provide financial information and data on CSR actions
- Product sustainability scorecard to track progress on improving the sustainability profile of new products
- Set up their own sustainability excellence award (rare)
- Planet: commitments to energy consumption, water use, waste management and GHG emissions
How has Colgate-Palmolive’s work been widely recognised?
Included in Ethisphere’s 2015 list of World’s Most Ethical Companies
Award for Best Global Green Brand 2013
Granted US EPA Energy Start 2014
What is beyond compliance leadership strategy?
- Disclosing info about activities so that stakeholders are aware of their actions
- Invest in processes and product creation
- Voluntary tools promoted by the market to emit a larger signal to investors and society
What are some examples of voluntary tools promoted by the market?
EMS certification (ISO 14001, EMAS) logos to show compliance
Adoption of business codes regarding EM
Reporting schemes - GRI: disclosure of info
Other tools: CERES roadmap for sustainability
How is Abengoa (technology company) operating with beyond compliance leadership?
- Innovation to specialise in generation of electricity from renewable sources, conversion of biomass into biofuels etc
- R+D centres for sustainability
- Collaborates with technology partners
- CR management in line with ISO 20600 - biggest standard
- GRI etc
- Completed the development of an internal norm that will enable the company to calculate its global footprint
What is eco-branding as a strategy?
Marketing differentiation based on environmental attributes of a product
Invest in product differentiation
Inventing themselves in line with the natural environment
E.g Patagonia, Innocent, Seventh Generation
What is a B corporation in terms of eco branding?
They make the wider benefit their main priority - by default their operations mitigate negative externalities
How is Seventh Generation an example of eco branding?
- Sells cleaning, paper and personal care products in line with human and environmental well being
- CERES roadmap for sustainability - governance, stakeholder engagement
- Claims that their products do not endanger human or environmental health
E.g 100% recycled paper towels, tissues and napkins, non toxic cleaning products
What is greenwashing?
Not so environmentally friendly company claiming they are via marketing.
Misleading claims about the environmental benefits of a product, service technology or practice
