Business Strategy & Sustainability Summary 2024, Exercises of Business Strategy

Download Business Strategy & Sustainability Summary 2024 and more Exercises Business Strategy in PDF only on Docsity!

SUSTAINABILIT

Y IN BUSINESS

STRATEGY

Dr James Whitehead and Dr Richard Bakare

WHAT DOES "SUSTAINABILITY" MEAN IN BUSINESS? Sustainability refers to doing business without negatively impacting the environment, community or society and generally addresses two main categories:

• (^) The effect business has on the environment
• (^) The effect business has on society The goal of a sustainable business strategy is to make a positive impact on those areas. When companies fail to assume responsibility, the opposite can happen, leading to issues like environmental degradation, inequality, and social injustice. Sustainable businesses consider a wide array of environmental, economic, and social factors when making business decisions and monitor the impact of their operations to ensure that short-term profits don’t turn into long-term liabilities.

WHY IS SUSTAINABILITY IMPORTANT? Beyond helping curb global challenges, sustainability can drive business success.

• Several investors today use environmental, social, and governance (ESG) metrics to analyse an organization’s ethical impact and sustainability practices.
• (^) Investors examine factors such as a company’s carbon footprint, water usage, community development efforts, and board diversity. Motivating factors for adopting a sustainable mindset include:
• (^) Align with a company’s goals, missions, or values
• (^) Build, maintain or improve reputation
• Meet customer’s expectations
• Develop new growth opportunities
• (^) Increase operational efficiency by reducing waste

Swedish steel is considered the world’s toughest. It may soon become its greenest. The Economist 24 Sep 2022 ‘Green-dustrialisation’

• (^) In Boden, a town near the Arctic Circle,

a start-up called H2 Green Steel

(H2GS) is building a €4bn ($4bn) new

mill, Europe’s first in nearly half a

century.

• (^) It will be powered not by the usual coal

or natural gas but by green hydrogen,

produced on site by the region’s

abundant wind and hydropower.

• When fully built in a few years, it will

employ up to 1,800 people and produce

5m tonnes of steel annually.

Both the economics and the technology are at last looking more favourable.

• (^) Europe is introducing tougher

emissions targets.

• (^) Consumers are showing a

greater willingness to pay

more for greener products.

• (^) Several European countries

have crafted strategies for

hydrogen, the most

promising replacement for

fossil fuels in many industrial

processes.

• (^) Low-carbon technologies are

finally coming of age.

H2G Technology

• H2Gs’s mill in Boden is cleverly combining proven technologies at a big scale.
• The firm is building one of the world’s largest electrolysis plants to produce hydrogen.
• The gas is then pumped into a reactor, where it powers a process called “direct reduction”: under great heat, it snatches oxygen from iron ore, producing nothing but water and sponge iron.
• (^) This material, so called because its surface is riddled with holes, is then refined into steel using an electric-arc furnace, which dispenses with coking coal.

What is Strategy?

Strategy is how an organisation proposes to

allocate its scarce resources to achieve its goals. In

other words: ends, ways and means.

Strategic Managem ent Process

Strategic Managem ent Process

Origins of Strategy Strategy from Greek stratēgia , the art of military command or generalship.

1. Military strategy from the late 18th^ century to nuclear game theory and the rise of asymmetric warfare is a way of uniting operations (campaigns and battles) with political objectives. 2. Political strategy , particularly those of the 19th century professional revolutionaries, such as Karl Marx. 3. Business strategy , mainly a late 20th^ century phenomenon. Uniting operations with business objectives In all three spheres strategy seeks to achieve a decisive and lasting result - a sustainable competitive advantage****.

The same is true in business and politics

Initial success is hardly ever decisive. If you have a run of success with some great

products or an innovative business model, it does not mean you will stay on top for ever.

• (^) Competitors make unexpected moves
• The needs and preferences of buyers change
• (^) New market opportunities emerge
• (^) Managers develop new ideas to improve strategies
• New technology emerges

Strategy is not a Plan

• (^) A plan supposes a sequence of events that allows one to move with confidence from one step to another, strategy is required when others have opposing plans and interests.
• (^) Strategy only really comes into its own when elements of conflict are present – a shift in social attitudes or patterns of behaviour that challenge what had previously been taken for granted.
• (^) Strategy is about overcoming challenges and seizing opportunities
• (^) Strategy is about choice: what to do and what not to do.

Strategy Evolves

Strategy Evolves Strategy is less about reaching an objective or end state and more about moving to the next stage - a place that can be realistically reached from the current position. With each move the combination of ends, ways and means must be reappraised. Assessing where you are on your journey from each piece of higher ground. Victories are still significant, but they must be recognised for what they are: a more satisfactory state, not the end of the struggle.