Shared Value

Creating shared value

- Michael Porter is author and also created the “5 forces model” to understand the competitiveness and attractiveness of an industry

+ Threat of new entrants, threat of substitute producers, bargaining power of customers, bargaining power of suppliers, intensity of competitive rivalry

- Creating shared value (CSV) is a way to grow economics, marketplaces etc. in the long-term interest of businesses and everyone else. NOT just wealth distribution

- Discovery LTD rewards members healthy habits by paying gym memberships and recreational activities

Reconceiving products and markets – Defining markets in terms of unmet needs or social ills and developing profitable products or services that remedy these conditions.

Example: BD developed a new type of safety syringe to reduce healthcare worker needle-stick injuries. This product innovation grew to $2 billion, approximately a quarter of the company’s revenue.

Redefining productivity in the value chain – Increasing the productivity of the company or its suppliers by addressing the social and environmental constraints in its value chain.

Example: By reducing packaging and improving delivery logistics, Walmart saved $200M in distribution costs while growing the quantities being shipped.

Local cluster development – Strengthening the competitive context in key regions where the company operates in ways that contribute to the company’s growth and productivity.

Example: Cisco reduced a key constraint to growing its addressable server market by launching the Networking Academy to train over four million network administrators globally.

Sustainable Product Design Issues

- Staying ahead of demand due to more companies wanting sustainable products which has caused more regulatory requirements. This causes delays in disposing of say electronic waste and cost rise.

- Intent vs Execution: Companies need to plan budgets and map out timelines to execute these sustainable practices so they don’t...