Presentation on theme: " Red Oceans of Competition – Margins & Share May-15 1Ravi Fernando(c) RAF Copyright April 2013 Cambridge Mst."— Presentation transcript:
Red Oceans of Competition – Margins & Share May-15 1Ravi Fernando(c) RAF Copyright April 2013 Cambridge Mst.
Strategies to increase Competitiveness of Sri Lankan Business - H ow Competitive are we? - The Future –Irreversible trajectory - Creating ‘New’ market spaces - What we need to do! Ravi Fernando July 2013 May-15 2Ravi Fernando(c) RAF Copyright April 2013 Cambridge Mst.
Adjustment to the GCI scores by sustainability indicators GCI 2012 – 2013 Sustainability adjusted GCI Country/EconomyRankScore Switzerland15.726.85 Germany65.486.14 United States75.475.31 United Kingdom85.455.82 Japan105.405.76 Korea Republic195.124.89 Australia205.125.46 Malaysia255.065.14 China294.834.44 India594.323.73 Sri Lanka68 +10 = 784.193.96 Venezuela1263.463.28
The World’s economic growth and resource utilization is unprecedented ! Source: IMF, Standard Chartered Research Nominal world GDP since 1990 USD billions May-15 5Ravi Fernando(c) RAF Copyright April 2013 Cambridge Mst. “Our Economy operates by stealing the future, selling it in the present and calling it GDP” – Paul Hawken
The planet is in crisis! Global demand -earth’s resources exceed regenerative capacity by 30% By 2030 Two planets are needed to meet the demand Source: Living Planet Report 2008 3 May 2015 RAF Copyright July 2008 Plan B – Branson & Zeitz (Polman,Tata & Robinson) “Business is integral to society, but it has created most of the negative environmental challenges of the century… The B Team will catalyze a shift away from the existing short –term, unsustainable mind set towards the long term interest of people, the planet and the wider economy’. Tackling these three challenges is a starting point for a ‘Plan B’ to form. Jochen Zeitz –Chairman PUMA June 2013
President Barak Obama Inauguration speech - 21 st January 2013 We will respond to the threat of climate change, knowing that failure to do so would betray our children and future generations The Climate Change Action Plan June 2013 34 Nations have a strategy USA -National strategic initiative ‘ We want to become the strongest competitor & most influential player to invest in Sustainable prosperity – Mark Mykleby Some may still deny the overwhelming judgment of science, but none can avoid the devastating impact of raging fires, crippling drought and more powerful storms.
RAF SEPT 2009 ‘ ! ’ - ‘Consumers are ever greener, and their support for sustainable products and services is growing worldwide. ……..becoming eco- friendly will soon be a necessary cost of doing business ! ’ - Nidumolu, R, Prahalad. C.K and Rangaswami. M.R (2009), Why Sustainability is now the key driver of innovation? HBR September 2009 ‘Most executives know how they respond to the challenge of sustainability will profoundly affect the competitiveness and perhaps even survival of their organizations’ -Lubin.D.A and Esty.D.C (2010) The Sustainability Imperative HBR May 2010
Blue Oceans of Opportunity! Creating new market spaces!
May-15 10Ravi Fernando(c) RAF Copyright April 2013 Cambridge Mst. Creating new and uncontested market spaces to make the competition irrelevant Blue Ocean strategy Developing an “offering” and Positioning & Differentiating it to meet a need not met ‘in that way’ before!
Blue Ocean Strategy The Opportunity of ‘Non Customers’ The automobile industry ‘Current users/market 10-12% Non users – 90% + in Tier 2&3 Nokia –BB-Apple-Samsung Tata Nano Phones as Cameras 1Bn Tourists – 2Bn to go!
Creating a ‘new’ and ‘uncontested’ Market space LeaderFollowers Launched in 1997 in Japan 2013 Best global green brand –Interbrand Honda Accord Hybrid Ford C-Max Hybrid BMW ActiveHybrid 3 May-15 12Ravi Fernando(c) RAF Copyright April 2013 Cambridge Mst.
Creating a new and uncontested market space May-15 (c) RAF Copyright April 2013 Cambridge Mst. 13Ravi Fernando 1993 President Clinton ‘Fuel efficient’ cars Akihiro Wada –VP led team of 1,000 engineers, $1bn+R&D –G21 Project USA Low Oil prices in late 90’s GM Withdraws EV 1 in 2002 Priced at >$20,000 Strategic Pricing! Launched in 1997 in Japan 2000 in 80 countries 2002 Prius sold 1M cars …. brands follow 2013 March -5 Mn Hybrids 16% of Toyota sales and 40% in Japan
General Electric’s new market space “America should get busy addressing the two biggest global challenges — clean energy and affordable health care… The leader in these fields will dominate the global economy in the decades to come.. Compact Fluorescent Lamps Jeffrey R. Immelt Chairman and CEO
RAF SEPT 2009 Nation ‘Create Market spaces’ Wine IndustryAutomobile IndustryElectronic Industry Apparel Industry Made in France Made in Australia Made in Germany Made in Japan Made in The England Made in Korea Designed in Italy Designed in Spain Made in The UK Made in China Fashion Industry
RAF SEPT 2009 Can Sri Lanka ‘create new market spaces ? Top 10 National Geo. Eco –destinations Dubai /Costa Rica/ Laos Eco- Tourism –small to medium destination Sustainable Nano Materials - Titanium & Graphite
Sustainability Strategies What needs to be done Sustainably Sector – TourismSustainable Nano.Mat. Graphite/ Titanium source Sustainability- Vision Eco Tourism space Nano.Materials space Creativity /Innovation Strategic Differentiation Conservation Sustainable architecture /R&D Facility Sustainably sourcing Sustainably made –Mfg. Locations Travel Logistics Sustainable mind sets Branding
Green is a new Blue Ocean for Business! May-15 20Ravi Fernando(c) RAF Copyright April 2013 Cambridge Mst. Thank you! Future market spaces - Green Future Strategy – SCS How - Blue Ocean Strategy
Sustainability-led ‘differentiation’ in Sri Lanka May-1522 (c) RAF Copyright April 2013 Cambridge Mst.
Singapore’s new market space -A City in a Garden Global Hydro hub Green Cover Waste management – Semakau Island to safely dispose waste in an environment friendly way Gardens by the Bay
From Garden city to City in a Garden Green cover 1986 – Green cover 35.7 % and Population of 2.7 Million 2012 – Green Cover 50 % and Population of 5.1 Million Global Hydro Hub 75 % of country water is enable Storm water collection NeWater Storm water
Unilever’s ‘new market space’ Accelerating sustainable growth "Companies can no longer sit on the sidelines waiting for governments to take action on the huge environmental and social issues which face us. We have to see ourselves as part of the solution to these problems.” Paul Polman The Unilever Sustainable Living Plan (USLP) It includes around 60 targets and embraces all aspects of our own operations, going beyond them to the entire lifecycle of our products. Innovation and technology will be key to achieving our goals. Equally important will be our ability to change consumer behaviour.
Requirements for Sustainability For Sustainability to work….. Sustainable Policy Sustainable Consumption Sustainable Business /Economy 26 (c) RAF Copyright April 2013 Cambridge Mst. May-15