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Sustainable Innovation

by on February 10, 2010

Green movement and sustainable innovation have evolved significantly over the year. With the growing interest of sustainable innovation, companies must make the decision of whether or not to integrate sustainability in their R&D.  One of the main focuses in implementing sustainable innovation is to align customers’ values with green values.  This paper discusses the challenges of this integration which include overcoming customers’ skepticism and ensuring that trade-offs appeals to the customers’ values.

Overcoming customers’ skepticism –  For example in the case of the milk jug redesign, although it has many benefits including efficiency in transportation and storage, price reduction, fresh milk and better environment, the consumers simply didn’t like it. When they try to use it, they would spill their milk. Sam’s Club tried to set up demonstration to show people how to pour the milk without spilling it. However even after the demonstration, customers are still skeptical about buying the new milk jug.

Ensuring that trade-offs appeals to the customers’ values – In order to get a better sense of trade-offs, it’s important to look at the trends in the market. For example, the sale of Toyota Prius was highest in the US during the beginning of 2008 when gas prices peaked. The high cost in gas added value to the fuel efficiency of the hybrid and thus it appeals to users’ values. Additionally, that was prior to the recession and thus customers are more willing and more able to spend a lot of money up-front in order to gain long-term benefits

For companies who choose to ignore the green aspect in their R&D, that decision could potentially cause them to risk losing their competitive advantage against other competitors. For example, eco-friendly car is the current hot trend and auto companies that fail to investigate and develop eco-friendly cars could lose their competitive edge to companies that are producing electric vehicles and hybrids.

If companies choose to implement sustainable innovation but are unable to overcome its challenges, what would be the consequences of that? Would it better then, not to have tried it at all?

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