The PGS-framework - A Study of Alfdex's Environmental Strategy
(2011) FEKP02 20111Department of Business Administration
- Abstract (Swedish)
- The possibility to make environmental strategy a part of the core strategy through a framework called inside-out/outside-in was suggested by Porter in 2007. Researchers have also stated that the output of implementing a certain strategy ought to be valued during strategy planning. The two areas; environmental strategy and profitability analysis have although not frequently been combined, and thus there is a lack of frameworks on how to perform a profitability analysis on an environmental strategy. As a result, examples of generated profitability from an environmental strategy are also few. The purpose of the thesis is to develop a framework for describing and analyzing the potential profitability of a company’s green strategy as a part of... (More)
- The possibility to make environmental strategy a part of the core strategy through a framework called inside-out/outside-in was suggested by Porter in 2007. Researchers have also stated that the output of implementing a certain strategy ought to be valued during strategy planning. The two areas; environmental strategy and profitability analysis have although not frequently been combined, and thus there is a lack of frameworks on how to perform a profitability analysis on an environmental strategy. As a result, examples of generated profitability from an environmental strategy are also few. The purpose of the thesis is to develop a framework for describing and analyzing the potential profitability of a company’s green strategy as a part of the core strategy. The purpose is further to apply the framework in a case study. In order to fulfill the purpose, a deductive study has been performed. The theoretical framework was constructed first, based on Porter’s theories concerning competitive advantage and corporate social responsibility (CSR) (inside-out/outside-in) together with profitability- and life cycle assessment (LCA)-tools. Thereafter the developed PGS-framework (Profitability of Green Strategy) was tested on a relevant case company. The methodology has been a combination of quantitative and qualitative methods, and data has been collected from primary sources such as interviews and surveys (mainly empirics), and secondary sources such as literature (mainly theories). The PGS-framework is a tool for performing a profitability analysis of implementing a green strategy as a part of the core strategy and it enables a framework for combining green strategy and profitability. It consists of 5 steps and is developed from the inside-out/outside-in analysis (suggested by Porter in 2007) by adding the sub-steps of LCA, five forces framework, the NEP-Scale, profitability analysis, including industrial ecology and profitability drivers. The most contributing factors to why the environmental strategy generates revenue are the discovered (unique for this company) profitability drivers; to be proactive and to have proper knowledge. The present value indicates a profit of 5,4 Million SEK, or 0,26 % of the total yearly turnover, as a result of implementing the green strategy into the core strategy. The PGS-framework has a Porter-approach, but the inside-out/outside-in analysis in step 1 shows similarities with strategic frameworks developed by other researches, why the framework is considered having a somewhat general approach. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/1973488
- author
- Ejlertsson, Josefin LU and Gustafsson, Emelie
- supervisor
- organization
- course
- FEKP02 20111
- year
- 2011
- type
- H2 - Master's Degree (Two Years)
- subject
- keywords
- Environmental Strategy, Profitability Analysis, Competitive Advantage, Inside-out/outside-in analysis, PGS-framework
- report number
- 221/2011
- ISSN
- 1651-0100
- language
- English
- id
- 1973488
- date added to LUP
- 2011-06-03 10:21:38
- date last changed
- 2011-06-03 10:21:38
@misc{1973488,
abstract = {{The possibility to make environmental strategy a part of the core strategy through a framework called inside-out/outside-in was suggested by Porter in 2007. Researchers have also stated that the output of implementing a certain strategy ought to be valued during strategy planning. The two areas; environmental strategy and profitability analysis have although not frequently been combined, and thus there is a lack of frameworks on how to perform a profitability analysis on an environmental strategy. As a result, examples of generated profitability from an environmental strategy are also few. The purpose of the thesis is to develop a framework for describing and analyzing the potential profitability of a company’s green strategy as a part of the core strategy. The purpose is further to apply the framework in a case study. In order to fulfill the purpose, a deductive study has been performed. The theoretical framework was constructed first, based on Porter’s theories concerning competitive advantage and corporate social responsibility (CSR) (inside-out/outside-in) together with profitability- and life cycle assessment (LCA)-tools. Thereafter the developed PGS-framework (Profitability of Green Strategy) was tested on a relevant case company. The methodology has been a combination of quantitative and qualitative methods, and data has been collected from primary sources such as interviews and surveys (mainly empirics), and secondary sources such as literature (mainly theories). The PGS-framework is a tool for performing a profitability analysis of implementing a green strategy as a part of the core strategy and it enables a framework for combining green strategy and profitability. It consists of 5 steps and is developed from the inside-out/outside-in analysis (suggested by Porter in 2007) by adding the sub-steps of LCA, five forces framework, the NEP-Scale, profitability analysis, including industrial ecology and profitability drivers. The most contributing factors to why the environmental strategy generates revenue are the discovered (unique for this company) profitability drivers; to be proactive and to have proper knowledge. The present value indicates a profit of 5,4 Million SEK, or 0,26 % of the total yearly turnover, as a result of implementing the green strategy into the core strategy. The PGS-framework has a Porter-approach, but the inside-out/outside-in analysis in step 1 shows similarities with strategic frameworks developed by other researches, why the framework is considered having a somewhat general approach.}},
author = {{Ejlertsson, Josefin and Gustafsson, Emelie}},
issn = {{1651-0100}},
language = {{eng}},
note = {{Student Paper}},
title = {{The PGS-framework - A Study of Alfdex's Environmental Strategy}},
year = {{2011}},
}