Question

Question 2:

Discuss the importance of integrating business models to sustainable innovations. Explain the pillars of business models that should be considered in building business models of sustainable innovations. Support your answer with two illustrative examples. (800 words) answer in words

Answer 1

Ans

Sustainable innovations means the innovation is done by the company after taking in to consideration various sustainability considerations that is environmental, social and financial in to company's system from the generation of idea to commercialisation of innovation.

Below mentioned are the importance of integrating business models to sustainable innovations:

1. Increase Business Revenue.

Integrating business model to sustainable innovations lead to increase in business revenue by keeping in mind the environmental constraints business focus on maximizing their inputs leading to cost savings which enables business in exploration of new ideas such as creating new business or better products to capture market share.

2. Increase Customers Base.

It increases customer base of the business by creating trust based relationships with customers by providing innovative products and services with the environmental friendly process.

Below mentioned are the pillars of business models that should be considered in building business models of sustainable innovations:

1. Innovative Operations.

Innovative operations act as a pillar of the business model that should be used in building the business model of sustainable innovation. As operational innovation leads to greater efficiency and reduce dependence on fossil fuels. It futher leads to decrease in cost and overall increase in company's profit. Thus the innovative operations helps in sustainable innovations.

Example:

FedEx company has set up 1.5-megawatt solar-energy systems at its distribution hubs . It uses hybrid vans that are 42% more fuel efficient than conventional trucks and has replaced more than 25% of its fleet with smaller, more fuel-efficient vehicles.

2. Workplaces.

The next pillar of the business model is workplace that should be used in building the business model of sustainable innovation. The companies are involved in encouraging employees to work fro home due to the environmental concerns.  This lead to the advantage of increase job satisfaction which helps in increasing the productivity of employees. Thus work from home is a sustainable innovation leading to save in the environmental resources like that of fuel inolved in travelling and various other energies.

Example:

IBM employees by working from home had saved the annual cost of $700 million in real estate costs.

3. Sustainable products and services.

The next pillar of business model is designing sustainable products and services that should be used in building the business model of sustainable innovation. It offers competative advantage to business and also saves various environmental resources.

Example:

P&G company launched Tide coldwater product which is a cold water detergent leading to low energy cost and compact packing benefit to the company. Thus also saves a valuable resource of environment that is electricity since it consumed 3% of annual electricity in heating water for washing clothes.