Case Study Description of Environmental Product Differentiation: Implications for Corporate Strategy
Political demands for environmental improvement create obligations for managers that can conflict with shareholder value creation. While differentiating products along environmental lines is a conceptually straightforward way of reconciling these apparently conflicting demands, not all attempts to do so have succeeded. This article describes three requirements for successful environmental product differentiation: 1) firms must discover or create a willingness in consumers to pay for public goods; 2) they must overcome barriers to the dissemination of credible information about the environmental attributes of their products; and 3) they must defend themselves against imitation. More broadly, environmental strategy must be integrated with the overall strategy of the business. The appropriate environmental strategy depends, like the business's overall strategy, on the fundamental economics of the industry and the business's internal capabilities--basic constraints that have often been obscured in the academic debate about business and the environment.
Swot Analysis of "Environmental Product Differentiation: Implications for Corporate Strategy" written by Forest Reinhardt includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Environmental Business's facing as an external strategic factors. Some of the topics covered in Environmental Product Differentiation: Implications for Corporate Strategy case study are - Strategic Management Strategies, Marketing, Sales, Sustainability and Global Business.
Some of the macro environment factors that can be used to understand the Environmental Product Differentiation: Implications for Corporate Strategy casestudy better are - – technology disruption, increasing transportation and logistics costs, increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google,
supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Environmental Product Differentiation: Implications for Corporate Strategy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Environmental Product Differentiation: Implications for Corporate Strategy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Environmental Business's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Environmental Business's operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Environmental Product Differentiation: Implications for Corporate Strategy can be done for the following purposes –
1. Strategic planning using facts provided in Environmental Product Differentiation: Implications for Corporate Strategy case study
2. Improving business portfolio management of Environmental Business's
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Environmental Business's
Strengths Environmental Product Differentiation: Implications for Corporate Strategy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Environmental Business's in Environmental Product Differentiation: Implications for Corporate Strategy Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Environmental Business's are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
High switching costs
– The high switching costs that Environmental Business's has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Analytics focus
– Environmental Business's is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Forest Reinhardt can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Effective Research and Development (R&D)
– Environmental Business's has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Environmental Product Differentiation: Implications for Corporate Strategy - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Environmental Business's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Environmental Business's has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Strong track record of project management
– Environmental Business's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Environmental Business's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Environmental Business's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Environmental Business's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Environmental Business's is present in almost all the verticals within the industry. This has provided firm in Environmental Product Differentiation: Implications for Corporate Strategy case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Ability to recruit top talent
– Environmental Business's is one of the leading recruiters in the industry. Managers in the Environmental Product Differentiation: Implications for Corporate Strategy are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Environmental Business's is one of the most innovative firm in sector. Manager in Environmental Product Differentiation: Implications for Corporate Strategy Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Environmental Business's is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Environmental Business's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Environmental Product Differentiation: Implications for Corporate Strategy Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Environmental Product Differentiation: Implications for Corporate Strategy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Environmental Product Differentiation: Implications for Corporate Strategy are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Environmental Product Differentiation: Implications for Corporate Strategy, in the dynamic environment Environmental Business's has struggled to respond to the nimble upstart competition. Environmental Business's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though Environmental Business's has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Environmental Product Differentiation: Implications for Corporate Strategy should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Environmental Business's products
– To increase the profitability and margins on the products, Environmental Business's needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Environmental Business's has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Low market penetration in new markets
– Outside its home market of Environmental Business's, firm in the HBR case study Environmental Product Differentiation: Implications for Corporate Strategy needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Environmental Product Differentiation: Implications for Corporate Strategy, it seems that the employees of Environmental Business's don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Interest costs
– Compare to the competition, Environmental Business's has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Increasing silos among functional specialists
– The organizational structure of Environmental Business's is dominated by functional specialists. It is not different from other players in the Global Business segment. Environmental Business's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Environmental Business's to focus more on services rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As Environmental Product Differentiation: Implications for Corporate Strategy HBR case study mentions - Environmental Business's takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High cash cycle compare to competitors
Environmental Business's has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
No frontier risks strategy
– After analyzing the HBR case study Environmental Product Differentiation: Implications for Corporate Strategy, it seems that company is thinking about the frontier risks that can impact Global Business strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Opportunities Environmental Product Differentiation: Implications for Corporate Strategy | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Environmental Product Differentiation: Implications for Corporate Strategy are -
Manufacturing automation
– Environmental Business's can use the latest technology developments to improve its manufacturing and designing process in Global Business segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Better consumer reach
– The expansion of the 5G network will help Environmental Business's to increase its market reach. Environmental Business's will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Environmental Business's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Environmental Business's can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Environmental Business's in the consumer business. Now Environmental Business's can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Environmental Business's has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Building a culture of innovation
– managers at Environmental Business's can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Global Business segment.
Low interest rates
– Even though inflation is raising its head in most developed economies, Environmental Business's can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Environmental Business's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Environmental Business's to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Environmental Business's to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Environmental Business's to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Environmental Business's has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Environmental Product Differentiation: Implications for Corporate Strategy - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Environmental Business's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Environmental Business's can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Environmental Product Differentiation: Implications for Corporate Strategy, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Environmental Product Differentiation: Implications for Corporate Strategy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Environmental Product Differentiation: Implications for Corporate Strategy are -
Stagnating economy with rate increase
– Environmental Business's can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Environmental Business's can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Environmental Product Differentiation: Implications for Corporate Strategy .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Environmental Business's in the Global Business industry. The Global Business industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Environmental challenges
– Environmental Business's needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Environmental Business's can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Environmental Business's.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Environmental Business's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Environmental Business's needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Global Business industry regulations.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Shortening product life cycle
– it is one of the major threat that Environmental Business's is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Environmental Business's
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Environmental Business's.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Environmental Business's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Environmental Product Differentiation: Implications for Corporate Strategy, Environmental Business's may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
Weighted SWOT Analysis of Environmental Product Differentiation: Implications for Corporate Strategy Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Environmental Product Differentiation: Implications for Corporate Strategy needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Environmental Product Differentiation: Implications for Corporate Strategy is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Environmental Product Differentiation: Implications for Corporate Strategy is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Environmental Product Differentiation: Implications for Corporate Strategy is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Environmental Business's needs to make to build a sustainable competitive advantage.
