Week 2 Assignment - Eco-Plays FrameworkPLEASE DO NOT SUBMIT A BID FOR THIS ASSIGNMENT IF YOU DO NOT HAVE EXPERIENCE WITH GRADUATE LEVEL WRITING TERMS AND CONCEPTS. ALL DIRECTIONS MUST BE FOLLOWED AND

Week 2 Guidance - Strategies for Building Eco-Advantages

As we have learned building competitive advantage based on Porter work can be achieved through:

1. Lowering cost – efficiency; or

2. Differentiation.

This concept is still valid but it should be based on environmental strategies. A company can drive revenues by increasing price or volume. Increasing the price is tactical and for the short term. Cutting cost is about making business more efficient.  Volume increase means more market share and this is a long-term strategy. Increasing revenue is about growth, and this is more about strategy and vision.

The environmental strategies will support achieving the competitive advantages. The text book p. 102, shows the strategy framework.  It has four quadrants, the upper half is based on revenues and intangibles (upside building), and the lower half of the figure is based on cost and risk (downside management).

Managing the downside is based on:

• Cost:

o   Eco-Efficiency Improve resource productivity. Anything not in the product is a cost. Here you try to get the same output with less input (resources), based on the equation below:

Productivity = Output / Input

Input = Resources (energy, skills, equipment, automation, machines, material…etc).

o   Eco-Expense reduction. Cut environmental costs and regulatory burden. This is achieved through innovation around waste reduction and resource productivity, which translates to Eco-Advantage.

o   Value chain efficiency. lower costs upstream and downstream the chain. Lower value chain costs by cutting the environmental and financial expenses of product distribution

• Risk:

o   Eco-risk control. Manage environmentally driven risks. These risks could be financial, strategic, operational, and hazard. This evaluation and assessment is done through anticipatory issues management (anticipate risks). This could be done through scenario planning, supply chain auditing, and regular risk reviews.

Building the upside is based on:

• Revenues:

o   Eco-design. Meet customer environmental needs. Here the business tries to meet a need that exists in the market and that customers really need.

o   Eco-sales and marketing. Build product position and customer loyalty on green attributes. However, the product will not sell just based on the environmental attributes. Customers need reasons to buy such as price, quality, performance, and service.

o   Eco-defined new market space. Promote value innovation and develop breakthrough products.

REFERENCES:

Esty, D.C., & Winston, A.S. (2009). Green to gold: How smart companies use environmental strategy to innovate, create value, and build competitive advantage. Hoboken, NJ: John Wiley & Sons, Inc. ISBN: 9780470393741