How can going green benefit your business, a strategic analysis

Details

Supervisors

Belleflamme, Paul

Faculty

Louvain School of Management

Degree label

Master [120] : ingénieur de gestion, à finalité spécialisée

Abstract

In a context where the environment can no longer be considered as having unlimited resources, companies must change the way they work. Whether voluntarily or as a result of new legislation, as a key player in global warming, companies are beginning to have no choice but to turn to more environment-friendly practices. This thesis aims to understand how and why companies can gain competitive advantages by going green. To do so, we will use a well-known model in strategy, Michael E Porter's value chain. We will apply it in a general way, to companies seeking to implement a green strategy to help find value-creating activities. After an introduction to this value chain, the study begins with an analysis of the support activities before focusing on the primary activities that constitute the supply chain, to finally consider some adjustments to the current model, to include the environmental dimension. We came to the conclusion that companies have several competitive advantages and benefits to gain from putting in place a green strategy especially if their culture incorporates it. What the company has most to gain is an improved image for several of its stakeholders. Firstly, the company will benefit from an improvement in the attractiveness, retention and efficiency of its employees. Secondly, the company will be more attractive to work with, and more suppliers will want to work with it. And finally, its perceived value to the consumer will increase, improving its overall reputation and what they are willing to pay for that product or brand. However, besides gaining a competitive advantage, companies have a lot to lose by ignoring the green aspect, which is growing exponentially over time. Indeed, regulations are more and more compelling, the global environmental awareness is growing as well. Along the paper, the reader must keep in mind that the “going green" literature is a rather new subject, with little consensus. In addition, it is evolving very fast, especially as legislation and regulations are changing, making certain writings rapidly obsolete. Secondly, our paper, and in particular our model, is subject to the same limitations as Porter's, in that it focuses more on traditional companies than on the digital economy such as platforms.