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Red Oceans of Competition – Margins & Share
04/21/23 1Ravi Fernando(c) RAF Copyright April 2013 Cambridge Mst.
Strategies to increase Competitiveness of Sri Lankan Business
- How Competitive are we?
- The Future –Irreversible trajectory
- Creating ‘New’ market spaces
- What we need to do!
Ravi Fernando July 2013
04/21/23 2Ravi Fernando(c) RAF Copyright April 2013 Cambridge Mst.
RAF SEPT 2009
STRATEGY
“ “Strategy is about setting yourself apart from the competition. It’s not just a matter of being better at what you do it’s a matter of being different at what you do”
Michael Porter Michael Porter “Rethinking the Future”
“Strategy is being different in a relevant way” © Ravi Fernando (2013)
Adjustment to the GCI scores by sustainability indicators
GCI 2012 – 2013 GCI 2012 – 2013 Sustainability adjusted GCI
Country/Economy Rank Score Score
Switzerland 1 5.72 6.85
Germany 6 5.48 6.14
United States 7 5.47 5.31
United Kingdom 8 5.45 5.82
Japan 10 5.40 5.76
Korea Republic 19 5.12 4.89
Australia 20 5.12 5.46
Malaysia 25 5.06 5.14
China 29 4.83 4.44
India 59 4.32 3.73
Sri Lanka 68 +10 = 78 4.19 3.96
Venezuela 126 3.46 3.28
The World’s economic growth and resource utilization is unprecedented !
Source: IMF, Standard Chartered Research
308,285
133,676
62,346
32,06122,856
20,000
60,000
100,000
140,000
180,000
220,000
260,000
300,000
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030
World GDP (Nominal)
Nominal world GDP since 1990 USD billions
04/21/23 5Ravi Fernando(c) RAF Copyright April 2013 Cambridge Mst.
“Our Economy operates by stealing the future, selling it in the present and calling it GDP” – Paul Hawken
The planet is in crisis!
Global demand -earth’s resources exceed regenerative capacity by 30%
By 2030 Two planets are needed to meet the demand
Source: Living Planet Report 2008
April 21, 2023 RAF Copyright July 2008
Plan B – Branson & Zeitz (Polman,Tata & Robinson)“Business is integral to society, but it has created most of the negative environmental challenges of the century…The B Team will catalyze a shift away from the existing short –term, unsustainable mind set towards the long term interest of people , the planet and the wider economy’. Tackling these three challenges is a starting point for a ‘Plan B’ to form. Jochen Zeitz –Chairman PUMA June 2013
President Barak Obama Inauguration speech - 21st January 2013 We will respond to the
threat of climate change ,knowing that failure to do so would betray our children and future generations
The Climate Change Action Plan June 2013
34 Nations have a strategy
USA -National strategic initiative‘We want to become the strongest competitor & most influential player to invest in Sustainable prosperity – Mark Mykleby
Some may still deny the overwhelming judgment of science, but none can avoid the devastating impact of raging fires, crippling drought and more powerful storms.
RAF SEPT 2009
‘‘Consumers are ever greener, and their support for sustainable products and services is growing worldwide. ……..becoming eco-friendly will soon be a necessary cost of doing business!!’ ’ --Nidumolu, R, Prahalad. C.K and Rangaswami . M.R (2009),
Why Sustainability is now the key driver of innovation? HBR September 2009
‘Most executives know how they respond to the challenge of sustainability will profoundly affect the competitiveness and perhaps even survival of their organizations’
-Lubin.D.A and Esty.D.C (2010) The Sustainability Imperative
HBR May 2010
Blue Oceans of Opportunity! Creating new market spaces!
04/21/23 10Ravi Fernando(c) RAF Copyright April 2013 Cambridge Mst.
• Creating new and uncontested market spaces to make the competition irrelevant
Blue Ocean strategy
• Developing an “offering” and Positioning & Differentiating it to meet a need not met ‘in that way’ before!
Blue Ocean StrategyThe Opportunity of ‘Non
Customers’
• The automobile industry ‘Current users/market 10-12% • Non users – 90% + in Tier 2&3
• Nokia –BB-Apple-Samsung
•Tata Nano
• Phones as Cameras• 1Bn Tourists – 2Bn to go!
Creating a ‘new’ and ‘uncontested’ Market
space Leader Followers
• Launched in 1997 in Japan
• 2013 Best global green brand –Interbrand
Honda Accord Hybrid
Ford C-Max Hybrid
BMW ActiveHybrid 3 04/21/23 12Ravi Fernando(c) RAF Copyright April 2013 Cambridge
Mst.
Creating a new and uncontested market space
04/21/23 (c) RAF Copyright April 2013 Cambridge Mst.
13Ravi Fernando
• 1993 President Clinton ‘Fuel efficient’ cars
• Akihiro Wada –VP led team of 1,000 engineers, $1bn+R&D –G21 Project
• USA Low Oil prices in late 90’s
• GM Withdraws EV1 in 2002
• Priced at >$20,000 Strategic Pricing!
• Launched in 1997 in Japan
• 2000 in 80 countries
• 2002 Prius sold 1M cars
• …. brands follow
•2013 March -5 Mn Hybrids
•16% of Toyota sales and 40% in Japan
General Electric’s new market space
“America should get busy addressing the two biggest global challenges — clean energy and affordable health care… The leader in these fields will dominate the global economy in the decades to come..
Com
pact
Fl
uore
scen
t La
mps
Jeffrey R. ImmeltChairman and CEO
Top 50 Global ‘Green brands’ –INTERBRAND 2013
Strategic Corporate Sustainability
• Sustainability-led Differentiation
• Sustainability leadership
Framing & Positioning Governance structure One strategy Reward system Measurement Reporting
•Stakeholder engagement
“Commitment to implementing strategies for Sustainable Business which differentiates the organization, whilst impacting all stakeholders which are in its sphere of influence.” © Ravi Fernando July 2008 Greenleaf Publishing 2014
04/21/23 (c) RAF Copyright April 2013 Cambridge Mst.
16Ravi Fernando
RAF SEPT 2009
Nation ‘Create Market spaces’
Wine Industry Automobile Industry Electronic Industry Apparel Industry
Made in France
Made in Australia
Made in Germany
Made in Japan
Made in The England
Made in Korea
Designed in Italy
Designed in Spain
Made in The UK
Made in China
Fashion Industry
RAF SEPT 2009
Can Sri Lanka ‘create new market spaces ?
Top 10 National Geo. Eco –destinationsDubai /Costa Rica/ Laos
Eco- Tourism –small to medium destination
Sustainable Nano Materials
- Titanium & Graphite
Sustainability StrategiesWhat needs to be doneSustainably
Sector – Tourism Sustainable Nano.Mat. Graphite/ Titanium source
Sustainability- Vision Eco Tourism space Nano.Materials space
Creativity /Innovation
Strategic Differentiation
Conservation
Sustainable architecture /R&D Facility
Sustainably sourcing
Sustainably made –Mfg.Locations
Travel Logistics
Sustainable mind sets
Branding
Green is a new Blue Ocean for Business!
04/21/23 20Ravi Fernando(c) RAF Copyright April 2013 Cambridge Mst.
Thank you!
• Future market spaces - Future market spaces - GreenGreen • Future Strategy – Future Strategy – SCSSCS• How How - - Blue Ocean Blue Ocean StrategyStrategy
April 21, 2023 RAF Copyright July 2008
Sustainability-led ‘differentiation’ in Sri Lanka
04/21/23 22(c) RAF Copyright April 2013 Cambridge Mst.
Singapore’s new market space -A City in a Garden
• Global Hydro hub• Green Cover • Waste management –
Semakau Island to safely dispose waste in an environment friendly way
Gardens by the Bay
From Garden city to City in a Garden
Green cover• 1986 – Green cover 35.7 % and
Population of 2.7 Million• 2012 – Green Cover
50 % and Population of 5.1 Million
Global Hydro Hub• 75 % of country water is enable
Storm water collection
NeWater
Storm water
Unilever’s ‘new market space’
Accelerating sustainable growth
• "Companies can no longer sit on the sidelines waiting for governments to take action on the huge environmental and social issues which face us. We have to see ourselves as part of the solution to these problems.”
Paul Polman
• The Unilever Sustainable Living Plan (USLP)
• It includes around 60 targets and embraces all aspects of our own operations, going beyond them to the entire lifecycle of our products. Innovation and technology will be key to achieving our goals. Equally important will be our ability to change consumer behaviour.
Requirements for Sustainability
For Sustainability to work…..
Sustainable Policy
Sustainable Consumption
Sustainable Business
/Economy
26(c) RAF Copyright April 2013 Cambridge Mst. 04/21/23