Sustainability strategies - when does it pay to be green?

Question 1

Eco-efficiency

Answer 1

competitive advantage = lowering costs
competitive focus = organizational processes

upstream focus

use of eco-designs and/or eco-efficient processes to increase productivity and reduce costs.

aiming towards cost-benefit
resource efficiency and pollution prevention

show the stakeholders what is being done, why and how
effective when environmental concerns are high and resource constraints

Question 2

Beyond compliance leadership

Answer 2

competitive advantage = differentiation
competitive focus = organizational processes

fulfilling more than the minimum legal requirements

upstream focus

obtain positive reputation and leader role

certain business codes, such as ISO

strong communication of efforts (env. efficiency) - relying heavily on media
hard efforts to avoid bad reputation

strategy related to higher costs

Question 3

Eco-branding

Answer 3

competitive advantage = differentiation
competitive focus = products and services

differentiation based on attributes
exploring niche markets of env. friendly products
communication key - of added values

remember the added value requirements

not effective in price sensitive markets often, since price premiums doesn’t work there

Question 4

Environmental cost leadership

Answer 4

competitive advantage = lowering costs
competitive focus = products and services

Using product innovation, e.g. substitution and dematerilisation (reduced amount of material) to gain competitive advantage in terms of pricing and env. performance

e.g. Ecolean swedish packaging company - substituted 40-60% of the raw materials shifting from plastics with calcium carbonate –> 25% lower price