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Formulating and selecting a business environmental strategy
Miriam Fischlein ESPM/MGMT 3604-5604

Agenda • Strategy formulation • Orsato’s typology of environmental strategies • Downy case study

Strategy formulation

The Five Steps of the Strategy Making Process
1
Define mission & goals 2 Analyze the external environment => threats and opportunities 3 Analyze the internal environment => weaknesses and strengths 4 Select appropriate strategies 5 Implement the strategies

Define

Analyze

Select

Implement

Adapted from: Hill, 2008. Copyright: Houghton Mifflin Company

Environmental mission statement at 3M

“3M's commitment is to actively contribute to sustainable development through environmental protection, social responsibility and economic progress. To us, that means meeting the needs of society today, while respecting the ability of future generations to meet their needs.”

=> The mission statement provides a rationale for what the company intends to do and a framework within which strategy is formulated (Hill, 2008).

Environmental objectives at 3M
Key objectives: Meeting society's and 3M's expectations for environmental improvement: • Reducing our environmental footprint. • Assuring our products are safe for their intended use through their entire life cycle. • Assuring the appropriate management of any 3M health and safety issues that may touch customers, neighbors and the public. • Maintaining a safe and healthy workplace. [...]

=> Objectives define a “measurable desired future state that a company attempts to realize” (Hill, 2008)

Environmental strategies at 3M
Meeting society's and 3M's expectations for environmental improvement: • Utilizing 3M's Environmental, Health and Safety Management System to help 3M and our business units identify key issues and long-term solutions. • Utilizing Life Cycle Management to continuously improve the environmental, health and safety impact of our products and processes. • Making pollution prevention pay through development of new technologies and products. • Setting aggressive environmental goals and meeting them.

=> Strategies are a plan of action and the means to achieve a desired end.

SWOT analysis
• SWOT analysis is a decisionmaking tool • It helps to “identify strategies that align a company’s resources & capabilities to its environment in order to create & sustain a competitive advantage.” (Hill, 2008)

Adapted from: Hill, 2008. Copyright: Houghton Mifflin Company

External analysis
=> Opportunities and threats External analysis requires an assessment of:

The wider socioeconomic environment that may affect the company and its industry

The country or national environments in which company competes

The industry environment in which company operates

Adapted from: Hill, 2008. Copyright: Houghton Mifflin Company

Internal analysis
=> Strengths and weaknesses of a company • Internal analysis includes an assessment of: • Quantity and quality of a company’s resources & capabilities • Method of building unique skills and company-specific or distinctive competencies

Adapted from: Hill, 2008. Copyright: Houghton Mifflin Company

Levels of strategy-making

Corporate Level Strategy Business Level Strategy Functional Level Strategy

Types of environmental strategies

Orsato’s types of environmental strategy

Source: Orsato 2006

Strategy I: Eco-efficiency
• Operations and price strategy:
– Focus on resource efficiency to reduce both costs and environmental impact of operations. Ultimate target: Closed-loop system – May implement formal EMS, if not too expensive. – External communication is of little importance

• Best for:
– Industrial suppliers – Waste-intensive industries – Process-intensive industries Adapted from: Orsato 2006

Examples for eco-efficiency strategies
“shrank the size of its cereals boxes […] and re-engineered the noodles in its Betty Crocker Hamburger Helper meals to make...
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