MIM 511/BA 548 WINTER 2011

SCOTT MARSHALL

Strategy and sustainability

Shareholder ValueInternal External

Today

Tomorrow

Strategy and sustainability

Drivers:Disruption

Clean TechnologyFootprint

Drivers:Population

PovertyInequity

Drivers:Pollution

ConsumptionWaste

Drivers:Civil Society

TransparencyConnectivity

Sources of Creative Tension on Each

Axis

Innovation & Repositioning

Growth Path & Trajectory

Cost & Risk Reduction

Reputation & Legitimacy

Minimize waste and

emissions from operations

Integrate stakeholders into business

processes

Develop new sustainable

competencies

Create shared roadmap for

meeting unmet needs

From Hart & Milstein, 2003

Strategy and sustainability

Environmental

Economic

Social

Strategic IssuesOperational Issues

Strategic IssuesOperational Issues

Strategic IssuesOperational Issues

BuildingStrengths andAmelioratingWeaknesses

• Health care• Gender

equity• Poverty

• Emissions and Effluents

reductions• Toxics reductions

• End of Life • Natural

resource dependencies

• Ecosystem Services and

Health

The Triple Botto

m Line

Strategy and sustainability

The Natural Step – Four System Conditions

In a sustainable society, nature is not subject to systematically increasing:

1. concentrations of substances extracted from the earth's crust;

2. concentrations of substances produced by society;

3. degradation by physical means and, in that society. . .

4. human needs are met worldwide.

Strategy and sustainability

“Coevolutionary theory argues that the concurrent operating of adaptation and selection explains the processes of [organizational] change and renewal.”(Flier, Van Den Bosch and Volberda, 2003, p. 2164)

Competitive success depends on External situation analysis Strategic planning Core competency focus Innovation and Organizational Change Resource efficiency And, Luck!

Know what to adapt to…

Figure how to adapt…

Adapt based on strengths…

Change products, processes, systems, structures, etc.…

Do it well.…

So, hope for some luck along the way.…

Strategy and sustainability

Global100 – Most Sustainable Corporations in the World

First, let’s find out about some background. Who’s conducting the benchmark study? For what purpose?

Link – http://www.global100.org

Strategy and sustainability

Global100 – Most Sustainable Corporations in the World

Second, let’s investigate the methodology… Methodology Overview Criteria and Weights

Strategy and sustainability

Global100 – Most Sustainable Corporations in the World

Third, let’s take a close look at the Global 100 Lists 2005, 2008 and 2010…

Strategy and sustainability

Global100 – Most Sustainable Corporations in the World

Next, let’s explore the sustainability-related strategies of some of the companies (in the food and beverage industry) that consistently make the Global100 Benchmark – in particular, stakeholder engagement and transparency. Groupe Danone Sainsbury Plc. Coca Cola Company

Food and beverage

Hunger and malnutritionNumber of Hungry, 2010 Number of Hungry,

1969-2010

Food and beverage

Hunger and malnutrition

Food and beverage

Organic and Fair TradeAsia Pacific Consumers -lead the world when it comes to intention to purchase organics, 47% compared to global average of 40%

- who buy organics, do so because they view organics as healthier, 82% vs. global average of 76%) and more nutritious (57% vs. 51%)

- who will not go organic are most likely to cite higher costs and taste preferences.

Availability of fair trade products at grocery store was important to 40%, the highest of any region.

North American Consumer- most likely to buy organics to avoid toxins (71%), promote environmentally-friendly organic farms (59%), help small farmers (58%), avoid genetically-modified products (45%), do the right thing (38%) and vote against modern farming methods (23%).

Food and beverage

Organic and Fair Trade

Food and beverage

Organic and Fair Trade

FairTrade Network of Asian Producers Let’s explore the producers, importers,

exporters…that is, the product and trade flow

Food and beverage

Sustainable Food Security in AsiaThree Dimensions of Sustainable Food Security

Source: Regional and Sustainable Development Department-Agriculture,Rural Development and Food SecurityUnit

Food and beverage

Strategy and sustainability - Food and beverage/Organic and Fair Trade/Asia

There’s pressure to adopt different practices… Palm oil and Indonesia and Nestle Fish Farming in China and Trade

Food and beverage

Strategy and sustainability - Food and beverage/Organic and Fair Trade/Asia

Fair Trade Tea Organic World Congress in South Korea

Exercise Discussion: Nestle and Sustainable Value Framework

Split into four large teams.I’ll assign one of the four quadrants from the

Sustainable Value Framework to each team.Work as a large team to complete one

quadrant – share all ideas, discover what you may not have seen before, make it comprehensive.

One representative from each team will write the answers on the board and share with the entire class.

Strategy and sustainability

Summary of Today Strategy and sustainability

External pressures are increasing Internal dynamics and tensions create opportunities for

innovation Competitive advantage is being achieved but isn’t always

easy Food and beverage

Major issues – hunger and malnutrition Issues will likely be heightened by climate change and

urbanization Solutions are being developed

Nestle and Sustainable Value Framework ???