Sustainable Management Marketing Assignment 2022

SUSTAINABLE MANAGEMENT & MARKETING
SUSTAINABLE MANAGEMENT & MARKETING
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SUSTAINABLE MANAGEMENT & MARKETING
Table of Contents
Introduction...........................................................................................................................................2
1. Resource management...................................................................................................................3
1.1 Burberry.......................................................................................................................................3
1.2 H&M Group.................................................................................................................................3
1.3 M&S.............................................................................................................................................3
1.4 Adidas..........................................................................................................................................4
1.5 NANUSKA.....................................................................................................................................4
1.6 Asos.............................................................................................................................................5
1. Three Fundamental Approaches....................................................................................................5
2. Value Dimensions..........................................................................................................................6
3.1 Offer............................................................................................................................................6
3.2 Value proposition........................................................................................................................6
3.3 Customer segments......................................................................................................................6
3.4 Customer partner relationship......................................................................................................6
3.5 Value creation and delivery.........................................................................................................7
3.5.1 Value creation.......................................................................................................................7
3.5.2 Key activities........................................................................................................................7
3.5.2 Key resources.......................................................................................................................7
3.5.3 Key partners..........................................................................................................................7
3.5.4 Channels...............................................................................................................................7
3.5.5 Value capture........................................................................................................................7
3.5.6 Cost structure........................................................................................................................8
3.5.7 Revenue flows......................................................................................................................8
3.5.7 Customer loyalty...................................................................................................................8
Conclusion.............................................................................................................................................8
References:............................................................................................................................................9
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SUSTAINABLE MANAGEMENT & MARKETING
Introduction
This paper introduces the concept of an economic model, termed as a ‘circular economy' with
a focus on resource management. This model aims to achieve suitability in production by
minimizing resource consumption and also eliminating wastes. This model is evolved by
breaking the conventional model of the linear economy, representing ‘take-make-dispose'
principle. The traditional resource consumption creates unsustainability by following the
logic of recycling of natural elements through landfill. The current model changes the linear
approach by introducing reuse, repair, refurbishment, recycling and ensures the continual use
of resources.
Source: (Chakrabarty, D., 2015)
Figure 1: How the circular economy works
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SUSTAINABLE MANAGEMENT & MARKETING
1. Resource management
The report describes the resource use and resource management of the following
brands:
1.1 Burberry
Issues:
The resources or raw materials used in Burberry's production are Cotton, Cashmere, and
Leather. According to the sustainability report of Burberry, the raw material phase is prone to
attract environmental damage. Burberry's resource management has failed to create suitability
in the use of Leather as it releases more than 10% of the whole greenhouse emission of the
company.
Resource Management:
 In the effort of eliminating the use of Chemicals in the list of fertilizers and pesticides,
Burberry applies restricted substances confirmed by zero discharge of Hazardous
chemicals Group (The Sydney Morning Herald, 2019).
 The company has adopted refurbishments by using LED lights and the consumption
of renewable energy by planting Solar panels.
1.2 H&M Group
Issues:
Being an apparel manufacturer's use of chemical and water is the primary criterion that
creates negative impact on nature. Excess use of water leads to the maximum consumption of
resources and the post-use water creates harm to water-bodies and human beings.
Management:
 H&M’s important sustainability commitment is limiting the discharge of chemicals in
their resource management. They ensure the restricted use of chemicals in fertilizers
and pesticides at the time of cotton cultivation (Sustainability.hm.com, 2019).
 They have adopted the renewable energy system by cleaning the water for reuse
which is washed out from the dyeing or manufacturing of cotton.
1.3 M&S
Issues:
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SUSTAINABLE MANAGEMENT & MARKETING
 Mark & Spencer’s sustainability commitment addresses the global climate change
concern.
 M&S is concerned about their waste production such as the packaging waste created
by the use of Polythene and cardboard, unsold food given to the poor people and
damaged clothes.
Management:
 M&S takes the initiative of minimizing greenhouse gas emissions.
 They take the initiative of waste reduction in food, clothing, packaging, carrier bags.
With the help of the Non-profit firms Oxfam and Newlife, M&S purses their mission of
collecting used products or damaged products and use for recycling (Dhakatribune.com,
2019).
1.4 Adidas
Issues & management:
In the apparel industry, Adidas was the first company which creates a guideline for other
industry players by identifying six high-risk chemicals used in manufacturing. They have
taken the Better Cotton Initiative (BCI) which addresses the adverse impact on environment
and society in cotton farming. They approached the minimum utilization of resources by
virtualizing the physical samples which save material waste, transport cost, and distribution
costs. Their successful sustainability program is reflected in the production of Element
Voyager shoe which is made of environmentally preferred products, releasing 5% waste
(Lacy and Rutqvist, 2016).
1.5 NANUSKA
Issues:
Nanuska’s manufacturing process of leather has addressed the issues of cruelty which raises
sustainability concerns.
Resource management:
Nanuska follows an alternative way of making leather instead of using animal leather
(Fullerton, 2019). In order to gain positive responses from the customers towards the material
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and the styles, they took the initiative of preserving environment for the future generations
and fashion industries.
1.6 Asos
Issues:
Asos' sustainability research identifies the non-biodegradable materials of the apparel
industry and how it creates waste in nature.
Management
The circular economy program of Asos introduces a sustainable fashion training program for
the designers to leverage stocking more closed-loop accessories and reduce environmental
impacts. For the upcoming 2020, the company has missioned for generating post-consumer
recycling of products (Patlins and Kunicina, 2012).
1. Three Fundamental Approaches
In order to mitigate the issues of resource management, this report describes the three
strategies:
Narrowing the loop:
The narrowing approach refers to improving efficiency in production, distribution,
and consumption. This strategy was effective in a linear business model. The concept
of narrowing loop is producing the goods and services with the same level of
performance while reducing its environmental burden (Stahel, 2016). According to of
European commission the guideline for a fundamental transformation of production
and consumption identifies the result of increasing competitiveness and profitability.
Slowing the loop:
Slow loop strategies ensure the extension of the product life cycle and reuse of
products. By assessing the environmental impacts of production, the slow loop
strategy postpones the introduction of new product development and reduces the
waste first. In reducing the waste of energy-using products, substitution can be
considered as per the assessment of the life cycle perspective (Tukker, 2015). This
process can ensure a significant amount of energy-saving increases the value of the
product by extending use and generate value.
Closing the loop:
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SUSTAINABLE MANAGEMENT & MARKETING
This strategy is used to eliminate the loops from the system. In the circular economy,
no waste is found in the production as wastes are eliminated from every residual
stream and ultimately focusing on the recycling of materials.
2. Value Dimensions
3.1 Offer
Each component of a company's offering creates value for the customers. By understanding the value
and cost associated with the value, the marketers set their offering to the market segments. In this
value dimension, the company offers a naked solution option for the customers which offers value to
all the customers in a specific market segment The marketers create a market offering or solution
option based on the requirement of the customer segments. Nike offers online service as well as the
physical store to the customers.
3.2 Value proposition
The value proposition describes a company’s promise to the customers on the value they will get after
the purchase and use. The value proposition comes in a statement form like the mission and vision of
the company (Geissdoerfer et al. 2017). This dimension describes how a company sources their product,
operates; in what segments in works; and also what their company represents. The value proposition
aims to inform the customer they need for their products and in what features they differentiate from
the other competitors. The Value proposition of Nike lays a strong impression on innovation. It also
allows the personalization of customer products. They hire endorsement of Michael Jordan, Cristiano
Ronaldo, and Tiger Woods to promote their value proposition.
3.3 Customer segments
Customer segmentation refers to classifying customers into different groups based on their common
needs. Customers are segmented by their demographic identity, behavioral identity, and other relevant
needs. Customer segmentation gives justification to the product development as it solves the common
problem of the customers in a group. Nike has customer segments in the apparel industry. Hey work
in a Niche market like athlete's footwear and garments.
3.4 Customer partner relationship
The customer partner relationship ensures the mutual benefit of both parties where the goals
of both parties are managed (Franco, 2017). The companies adopt CRM and PRM technology
to monitor their relationship with customers and partners. CRM only regulates the company’s
sales goal, market, market segments, and market needs whereas PRM allows the
collaboration with suppliers, vendors, and strategic partners to engage them in operational
activities.
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3.5 Value creation and delivery
The heart of the value dimension is value creation and delivery. It is concerned with the task
of production, pricing, distributing and advertising.
3.5.1 Value creation
Value creation executes the keeping of promise created in the value proposition. This
dimension creates the company’s benefits and the company tries to obtain the satisfaction of
customers.
3.5.2 Key activities
The dimension, ‘key activities’ is an important aspect of the business model canvas
framework which determines the main concern of a production process, associated with
revenue streaming (Meertens et al. 2012). Basically, it refers to the designing, manufacturing,
delivering products. Nike’s key activities are Designing and manufacturing apparel, shoes
and gym equipment for customers.
3.5.2 Key resources
The key resources refer to the assets of a firm, like human resources, physical resources,
economic resources and intellectual capital which contributes to value creation. Nike's key
resources are research teams who innovate the design thinking, apparel designers, IT experts,
labours, and human resource management team.
3.5.3 Key partners
The key partners refer to the network of suppliers, vendors and strategic partners who take
part in value creation. The global partner of Nike is the Ellen MacArthur Foundation and also
suppliers like EVERLAST and EA games (Lewandowski, 2016).
3.5.4 Channels
Channels denote the way by which the company delivers the value proposition to the targeted
customer segments in a cost-effective and fast-forward way (Joyce and Paquin, 2016). The
channel refers to the online presence, storefront, and partner channels. Nike reaches its
products to the customers through wholesalers, direct to end consumers and e-commerce
sites.
3.5.5 Value capture
This process refers to the percentage of value retained in the time of the transaction. Nike has
adopted the approach of Land value capture policy which allows the community farmers of
the cotton industry to recover and reinvest in the land (Chakrabarty, 2015).
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SUSTAINABLE MANAGEMENT & MARKETING
3.5.6 Cost structure
The cost refers to a different type of cost associated with value-driven and cost-driven
strategies. It features fixed costs, variable costs, economies of scale and scope. The fixed
costs are those which will not change like the cost of promotional strategy. Nike spends
$5,000,000 for promoting the brand through media (Epstein, Buhovac and Yuthas, 2010).
The variable cost of Nike is inventory and warehouse costs which vary time to time.
3.5.7 Revenue flows
This dimension refers to the whole income amount generated by the sales and it is associated
with the preliminary operation of the business. The revenue of Nike is 3,435 USD as of 2019.
3.5.7 Customer loyalty
Customer Loyalty refers to the emotional expectation to the customers from the brand which
leads to continual of buying and recommending to others.
Conclusion
In the first part, the following report describes the sustainability issues of the chosen brands
while depicting their initiatives of conducting sustainable resource management. In the
second part, the report discusses the three fundamental approaches of resource management
and shows how it is effective in mitigating the risks occurred in resource management. In the
third part of the report, value dimension is described with its sub-divisions and the examples
of Nike in related topics help in understanding the significance of the subject.
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References:
Chakrabarty, D., 2015. The Anthropocene and the convergence of histories. In The
Anthropocene and the global environmental crisis (pp. 44-56). Routledge.
Dhakatribune.com. (2019). Home | Dhaka Tribune. [online] Available at:
https://www.dhakatribune.com/ [Accessed 23 Sep. 2019].
Epstein, M., Buhovac, A. and Yuthas, K. (2010). Why Nike kicks butt in
sustainability. Organizational Dynamics, 39(4), pp.353-356.
Franco, M.A., 2017. Circular economy at the micro level: A dynamic view of incumbents’
struggles and challenges in the textile industry. Journal of cleaner production, 168, pp.833-
845.
Fullerton, A. (2019). This is the little-known fashion brand every cool girl (and Rihanna!) is
wearing on Instagram RN. [online] Glamourmagazine.co.uk. Available at:
https://www.glamourmagazine.co.uk/article/nanushka-fashion-brand [Accessed 27 Sep.
2019].
Geissdoerfer, M., Savaget, P., Bocken, N.M. and Hultink, E.J., 2017. The Circular Economy–
A new sustainability paradigm?. Journal of cleaner production, 143, pp.757-768.
Joyce, A. and Paquin, R.L., 2016. The triple layered business model canvas: A tool to design
more sustainable business models. Journal of Cleaner Production, 135, pp.1474-1486.
Lacy, P. and Rutqvist, J., 2016. Waste to wealth: The circular economy advantage. Springer.
Lewandowski, M. (2016). Designing the Business Models for Circular Economy—Towards
the Conceptual Framework. Sustainability, 8(1), p.43.
Meertens, L.O., Iacob, M.E., Nieuwenhuis, L.J., van Sinderen, M.J., Jonkers, H. and Quartel,
D., 2012, March. Mapping the business model canvas to ArchiMate. In Proceedings of the
27th annual ACM symposium on applied computing (pp. 1694-1701). ACM.
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Patlins, A. and Kunicina, N., 2012, October. Development of Telematic System Solution for
Public Transport Sustainability. In International Conference on Transport Systems
Telematics (pp. 229-239). Springer, Berlin, Heidelberg.
Stahel, W.R., 2016. The circular economy. Nature News, 531(7595), p.435.
Sustainability.hm.com. (2019). [online] Available at:
https://sustainability.hm.com/content/dam/hm/about/documents/en/CSR/Sustainability
%20Commitment/Sustainability%20Commitment_en.pdf [Accessed 23 Sep. 2019].
The Sydney Morning Herald. (2019). Burberry criticised for burning clothes instead of
discounting them. [online] Available at: https://www.smh.com.au/lifestyle/fashion/burberry-
criticised-for-burning-clothes-instead-of-discounting-them-20180720-p4zskn.html [Accessed
23 Sep. 2019].
Tukker, A., 2015. Product services for a resource-efficient and circular economy–a
review. Journal of cleaner production, 97, pp.76-91.
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