Published on January 10, 2008
Ecovalue a trip to the deep rabbit hole by Oriol Pascual
for educational purpose only ;-)
Traditional eco-belief or trip to wonderland?
Science Governments Technology MANUFACTURING Voters Suppliers COMPANY Customers Financial NGOs community External Value Chain The Matrix
Overview presentation Two stop trip
Blue Everybody should love eco
75% Global Fortune 500 claim to do Ecodesign
Relatively mature 30% Way to maturity 18% First movements 6% Starter & good intent 6% Publicity driven 14% Not interested 26% Ecodesign maturity proﬁles
Companies can do more
Technology will save us all
Eco-solutions seem not to appeal to mass consumers
Consumers can be educated If not green yet, you will soon get!
Consumers are rational When doing the math, they act accordingly
Designers as decision makers out of control!
Strategy Management Product Development Marketing management Production Sales Suppliers Customer Purchasing Logistics Internal Value Chain The Internal Matrix
Red Questioning reality
Low-hanging fruit picked Rapidly reaching the limits of physics
What design option is best? from a value chain perspective
10.000 Tones of CO2...what do you mean? ! Do you understand? Communication issues with the rest of value chain
What ﬁsh are you catching? For the resources invested, what are the opportunities?
business value environmental load Value creation How is ecodesign contributing to it?
To solve the equation you have to realize that...
Ecodesign is not alone
Demand side is key Environmental impact directly related to consumption power
The market is diverse even within the Guinea Pig food market!
Eco-efﬁciency index Product value Ecovalue = Environmental load Product value acceptable + - + Environmental 0 Load non-acceptable -
Supports decision making at strategic & product level
Value = perceived beneﬁt Functional & intangible beneﬁt
Paradigm shift Traditional ecodesign (blue) is about reducing product environmental load only Unbalanced with customer values New paradigm (red) shift asks for products with low environmental load and high value - reduced environmental load per monetary unit
Why Ecovalue? The environment is not alone, market forces apply Sustainability is about how we produce and consume Consumers have limited amounts of money in their pockets
How to make it happen? Science and technology Design Product differentiation Feelings and emotions
Setting priorities Value creation = Environmental & economic proﬁtability Addressing; ✤ Product value ✤ Customer value ✤ Business value
Product value Supply side Demand side Functional value Retail price Production costs WTP, pricing strategies Design & tech Marketing competition wholesale price Subjective value Cost of ownership Organizational costs Efﬁciency Design, brand, strategy Energy prices
Customer value Price buyers Feature buyers Experience buyers Each market segment perceives differently the trade-off product value/product price
Business value Consumer Value Market size group captured Price buyers 1/3 + Special feature 1/3 ++ Experience/ 1/3 +++ quality buyer
Eco-efﬁciency index Product value Ecovalue = Environmental load Ratio between environmental load & product’s use value (functional + intangible)
How does it work? Pick a baseline (given environmental load & economic value) Develop all possible scenarios (improve and/or reduce load & money)
Ecovalue scenarios Price Env. load Ecovalue Target group 1 ++ + +++ experience 2 ++ - + feature 3 + ++ +++ experience 4 + -- - feature 5 - ++ + price 6 - -- --- not applicable 7 -- + - price 8 -- - --- not applicable
Visualization Product value acceptable + - + Environmental 0 Load non-acceptable -
Case study: displays
Case study displays Screen Model Tech. Market Price size 1 CRT 29” China 354,63 2 CRT 28” Europe 481,00 3 LCD 23” Europe 972,32 4 LCD 32” Europe 215.592
Case study displays Env. load Shelf price Model Ecovalue (mPt) (euro) 1 69732 354,63 5,09 2 54169 481,00 8,88 3 50335 972,32 19,46 4 50595 2155,92 42,61
Product #1 4 acceptable + Product value 3 2 10 Environmental - + Load non-acceptable -
Product #2 4 acceptable + Product value 3 20 Environmental - + Load 1 non-acceptable -
Product #3 acceptable + Product value 4 30 Environmental - + Load 2 1 non-acceptable -
Product #4 acceptable + Product value 40 Environmental - + 3 Load 2 1 non-acceptable -
Conclusions The environment is not special; traditional market forces also apply to ecodesign It is possible to reduce a product's environmental load and increase its ﬁnal value How consumers perceive product value, determines ecodesign strategy: tailor-made solutions Ecovalue helps to set up priorities based in proﬁtability (environmental & economic)
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