How to design a "good" green business strategy

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Next microenvironment factor is the competitors. I would say this as industry attractiveness. In order to make an innovation to go further, I think there should be core sub-factors to make positive industry attractiveness. In Monsanto case, this factor is really important. There is already an entry barrier constructed by Monsanto’s large amount of patent and seeds. Installed POD system could be the channel barrier for its competitors. Also, huge expansion of the agricultural sectors in Brazil is attractive resources. If these sub-factors and social, economic, legal, and political situations like macro environment factors are consistent to each other, then Monsanto will have confidence in Brazil and be able to make an innovation.

How about all macro environment factors such as legal restrictions and political regulations? These factors related to the good and bad regulation effect on the innovation which can be explained by many cases. From Michael Porter’s point of view, good regulation is enhancing the competitiveness, but bad one can damage it. This means that it also make an effect on outbreak of innovation. For example, the mismanagement of the regulation on common goods leads the collapse of codfish industry. (Actually, it was not common at that time) This could be the typical example for the bad regulations which can rather damage to the outbreak of the innovation. After that, they build a total allowable catch (TAC) and quotas as regulations to sustain the fishery environment. These enable fishers to obtain cost-efficiency, increase profits, and improve the quality of fishes. In addition to that, I think these can also make firms to think efficient and sustainable fishing method continuously. The power plant in Colbun is more complex case. Although this company is the first Chilean companies which benefit from the regulations by selling CERs under the Kyoto Protocol, its Aysen hydropower project is experiencing heavy difficulties under many macro environment factors complexly. They need to expand their hydropower plants because the Argentine gas crisis made them to focus highly on the hydro power. In that circumstance, many critics from a local NGO and environmental groups become an obstacle to implement its hydropower project. However, I think the Colbun should not think this as an obstacle, but which can stimulate the green innovation achieving balance between environmental protection and energy production. These kind of critical situations occasionally change to the chance for green innovation. Monsanto’s POD system under legal stalemate was that case and the hybrid technology of the Prius was that case also. The case of Prius is originated from a high demand for environment friendly vehicle and that demand is derived from the CARB Zero Emission Vehicle regulations.

Therefore, I think these micro and macro environment factors can make firms to achieve a green innovation. And this innovation gives a proper environmental strategy to the firms to make economic profits and protect the environment simultaneously. After making a right direction on the environmental strategy by controlling all environment factors, I think we need to know how to apply this strategy in a right way. That would be answer to the question whether this green strategy is good or bad.

According to the Rumelt, Richard, between two components for good strategy, we already set our directions by environmental strategy. Thus, creating new strengths through shifts in viewpoint is a key component. For example, P&G, the world’s largest daily product company experienced a fail on its beauty products line recently. I think that is mainly because the company tried to maintain its position school strategy on beauty product as same as they did so far. The beauty industry is completely different from the daily product in many ways. It is very sensitive to a recent trend and changes every time. It needs a process school strategy with flexible attitude, but P&G didn’t. So they plan to sell their beauty line to LG healthcare.

In summary, there is a famous word from Native American song, “We do not inherit the earth from our ancestors, but we borrow it from our children.” To respond increasing amount of environmental concerns, I think making a good green business strategy becomes main goal for most firms in recent days. In order to achieve this goal, we need to examine all micro and macro environment factors to set an environmental strategy direction and finally we should avoid maintaining and stopping in front of the natural innovative streams.