SUMMARY

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SUMMARY

Post by Lin_Chen on Sun Mar 21, 2010 8:24 pm

The article “The Mini-Cases: 5 Companies, 5 Strategies, 5 Transformations”, written by Samuel Fromartz, discusses five different companies’ approach in shifting towards sustainability. He talks about their strategies, challenges encountered, and their impact on the environment, local communities, and the society after the transformation. Sustainability may be defined differently from company to company, whether it means to reduce energy consumption, lower carbon footprint, waste less, or to be more considerate of citizens. Thus, each company will focus on one dimension, of which it believes is most important to its business. In the end, as you will see in the following companies’ impact, they all find a profitable advantage by shifting to this approach. This shift also, then, leads to having a competitive advantage.

NIKE
In the 1990s, there was a campaign against their labor practices, which forced them to rethink their social responsibilities, product life cycles, and operations as a whole. They discovered that to produce just one shoe took three shoes’ worth of material—which cost $700 million a year. Therefore, after this discovery, they began to question whether the material used to manufacture their shoes was toxic, harmful to the environment, the origins of the fabric, and the product life cycle. As a result, they decided to reinvent the design and manufacture process of their shoes. They made it a goal to, by year 2020, meet general sustainability metrics—which meant to use non-toxic materials. After the transformation, Nike reduced waste by 67%, cut energy use by 37%, cut solvent use by 80%--all compared to their other product lines.

GENERAL ELECTRIC

For General Electric, sustainability was viewed as a business opportunity. Their challenge was creating a new business and while still holding a large market share. To transform their business, they set up an ecomagination unit to offer environmentally-friendly solutions to other companies, joined a climate organization, and engaged employees to save energy. For example, turning off the lights when not using the factory, recycling water, installing LED lights, GE has saved $100 million in these sustainable efforts. They have also cut greenhouse gas by 41%. Since then, they have invested $4 billion in research and development to continue this approach.

RIO TINTO
Rio Tinto is a multi-national mining and resources company, which leaves a large footprint. About ten years ago, Rio Tinto was working to reach out to communities. In the meantime, it was in the process of developing a mine in Madagascar, which already has been cleared from agriculture and charcoal productions. The potential mining location was the last pristine region on the island. This made them realize that mining in this region may threaten biodiversity and the local communities. Thus, Rio Tinto wanted to create an operation that was respectful to the environment, their employees, and yet be sustainable. Rio Tinto obtained a “social license” by meeting their list of measures to protect the environment and benefit local communities. Today, Rio Tinto encourages sustainable practices for other companies within the mining sector.

BETTER PLACE
Better Place manufactures electric cars and is mainly looking to expand their products. Their strategy is to focus on geographic regions where the government is encouraging the society to be more eco-conscious. Therefore, Better Place is depending on sustainable markets. For example, Israel, Denmark, Australia, Japan, and the United States (Los Angeles), where there is a strong green consumer movement. By finding locations where consumers would be willing to drive electric cars, Better Place obtained a competitive advantage and positioned itself to be a leader in the market.

WAL-MART

Wal-Mart is the largest retailer in the world, with over 7,800 stores. In terms of sustainability, Wal-Mart has already been implementing green initiatives, such as green roofs and eco-friendly trucking fleets. Their challenge is to green the supply chain, by using renewable energy, producing zero waste, and selling products that are not harmful to the environment. In 2005, Wal-Mart worked with Unilever to redesign the packaging of a laundry detergent. This new packaging used less amount of plastic and became the industry standard. Wal-Mart first encouraged their suppliers to waste less and recycle. They also collected data on product life cycles in order to inform consumers about sustainability of the products they purchase, which is their sustainability index. Wal-Mart is now using this index as a basis to educate consumers to better consumer.

In conclusion, the companies’ new approach benefits the environment as well as gaining respect from consumers. Sustainability is not just a trend, but it is an approach that helps companies to be more profitable and cost-saving in the end.


*Group 8: Lin, Camille, Nemo, Sean
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Lin_Chen

注冊日期 : 2010-03-04

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