It must be maddening for firms to read negative press about their sustainability efforts (or presumed lack of efforts). I encountered one such firm on a March 2011 study abroad trip to Costa Rica. In preparation for the trip I had read an article on ecotourism in Costa Rica published in a popular ecotourism anthropology book. In the article, the author chose two hotels/resorts to demonstrate both the good and bad of ecotourism in Costa Rica.
The good resort was a very small eco-lodge that had attained the highest level of sustainable tourism ranking from the ICT (government agency that ranks hotels on sustainability). The resort had less than 20 rooms on
Friday, April 15, 2011
Thursday, April 14, 2011
Sustainability and Low Cost Leadership
In the business strategy course, we teach that one of the ways that firms can gain a competitive advantage is by becoming the low cost producer in the industry. Since the firm's costs are lower than any of its competitors, the firm is able to either gain more sales by passing these savings on to customers or enjoy a higher profit margin than others in the industry.
How does a low cost strategy align with sustainable business practice? One can see that by conserving natural resources, firms may significantly reduce costs--both real costs and external costs. By developing resource efficiencies through using more energy efficient machinery or adapting manufacturing processes to minimize raw material inputs or reduce waste, companies can reduce production costs. Sustainability
How does a low cost strategy align with sustainable business practice? One can see that by conserving natural resources, firms may significantly reduce costs--both real costs and external costs. By developing resource efficiencies through using more energy efficient machinery or adapting manufacturing processes to minimize raw material inputs or reduce waste, companies can reduce production costs. Sustainability
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