Value Proposition For Sustainability-Management Assignment Solution Sample

QUESTION

 

 

ANSWER

 

VALUE PROPOSITION FOR SUSTAINABILITY

Table of Contents

Introduction 

1. Present value proposition of the organization 

2. Future value proposition of the company 

3. Use and non use values of products 

Use values 

Non use values 

4. Determination of WTP, WTA and consumer surplus 

WTP 

WTA 

Consumer surplus 

Conclusion 

Reference list 

Introduction

Value proposition is the art of innovation and invention of an organization which is intended to deliver sustainable products to the customers. The assignment highlights on the value proposition of sustainability in a Saudi Arabian organization, Nadec. The current and future value proposition of the organization is discussed along with the use and non use values of the food products delivered by the organization.

1. Present value proposition of the organization

The National Agricultural Development Company (Nadec) is one of the biggest food processing companies in Saudi Arabia. The products include fresh milk, yogurt as well as cheese. Besides, the authority also focuses on processing and making of fruit juices (Nadec.com.sa, 2019). The organization focuses on marketing their products by using plastic bags or bags that made up of polyethylene. This can cause damage to the environment. Along with this, the food processing includes different techniques which minimize the water wastage but causes release of polluted water through the sewage system. Thereby, the authority is now focusing to reduce the rate of pollution by using eco friendly package system (Nadec.com.sa, 2019). The application of this technique is helpful to decrease the cost of production. Besides, it can be helpful to make them enable to supply products that are socially, environmentally and economically superior.

2. Future value proposition of the company

A successful value proposition is helpful to communicate with the customers in an effective way by delivering superior quality of products to them. As described by Broman & Robèrt (2017), value propositions are unique to every aspect such as the consumers, the organization as well as the service method.

The authority of Nadec is emphasizing critically on the use of recycling packing system and production of food materials that are solely economically and environmentally superior. For this purpose, they need to incorporate eco friendly materials such as paper and cardboard, corn starch as well as mushroom packaging system. As stated by Covin et al. (2015), the use of paper and paper like substance for packaging is advantageous as they are degraded with time and causes no harm to the environment. Hence, the Nadec authority can focus intensely on the development of their packaging system to have a sustainable business background along with a loyal customer base.

3. Use and non use values of products

Taking effective initiatives for developing sustainability is essential to produce environment friendly and economically affordable products. As stated by Epstein (2018), an organization applies strategies for sustainable development which is advantageous for employee satisfaction and meeting customer demand. The values can be related to social, environmental as well as economic aspects of the organization. The market and non market impacts includes different types of criteria. The market benefits basically include-

  • Increase of sales volume

  • Increase efficiencies.

  • Reduction of costs.

  • Reduction in future cost of production (Rowledge et al. 2017).

The authority of Nadec can have market benefits which are helpful for them to form a loyal business environment. Moreover, effective value proposition can be helpful for them to deliver healthy products to a huge number of customers.

Figure 1: Market Benefits

(Source: Based on views of Hák, Janouškova & Moldan, 2016, p.566)

The non market values of using recyclable products are as mentioned below-

  • Increase quality of life.
  • Helps to develop health conditions.

The use values and non use values include some aspects that are beneficial for developing the consumptive as well as the non consumptive values for incorporating strategies that are helpful to deliver superior quality of service to the consumers (Holden et al. 2017). The use values of using eco friendly packaging system are as depicted below-

Use values

Consumptive values

Using environment friendly products is helpful for developing the social acceptance of the food products. Hence, the authority of Nadec can emphasizes on using eco friendly products which can be cost effective as well as pollution reducing entity (Nadec.com.sa, 2019).

Non consumptive values

It is helpful to develop the quality of life as well as the surrounding environment (Rudd, Andres & Kilfoil, 2016).

Non use values

Types of non use values

Description

Option value

The concerned organization is focusing on use of paper or corn packaging system. It can be helpful to develop the social impact of the products they supply to the customers. It can be regarded as the option value of reducing the hazards caused by using polythene packaging system. As mentioned by Siva et al. (2016), the option value deals with the risks that may arise during a processing system.

Existence value

It basically focuses on mode of saving the natural and environmental resources. Reduction in the use of plastic bags for packaging can be advantageous to reduce the rate of environmental pollution. Besides, it will be advantageous to increase the social and economic value of the food products.

Table 1: Non use values of using eco friendly packaging material

(Source: Based on views of Zhang et al. 2015, 52)

4. Determination of WTP, WTA and consumer surplus

In order to express the use and non use values the organization needs to determine the WTP (Willingness to pay), WTA (Willingness to accept) and the consumer surplus. In words of Epstein (2018), the measurement of consumer surplus is helpful to understand the outcome of following a particular method.

WTP

The Nadec organization can measure the WTP by comparing the customer perspectives of social, environmental as well as economic matter (Nadec.com.sa, 2019). Besides, when it can be found that using eco friendly materials are cost effective, hence the authority can encourage the stakeholders for paying more for food processing (Epstein, 2018).

WTA

The management of the concerned organization can determine the value WTA through analysing the willingness of the stakeholders who are indifferent for degradation in environmental and social matters.

Consumer surplus

It is the approach which focuses on the benefits of the consumers from the sustainable business process (Montabon, Pagell & Wu, 2016). Thus, if the authority has incorporated the eco friendly materials for packing it can be helpful to reduce the overall cost of production. Hence, when the stakeholders pay more than what they willing to pay, the company will have consumer surplus.

Conclusion

Thus it can be concluded that using environmentally friendly material for production is helpful to develop the social, economic and environmental values of them. Thereby, the authority of Nadec is emphasizing on using paper bags or cornstarch for packing their food products. This, in turn appears as advantageous for the company to form a sustainable business background. The implementation of eco friendly materials also has some critical use and non use values which are helpful to make a positive view among customers regarding the quality of products.

Reference list

Broman, G. I., & Robèrt, K. H. (2017). A framework for strategic sustainable development. Journal of Cleaner Production, 140, 17-31. Retrieved on 12/2/2019. Retrieved from https://fardapaper.ir/mohavaha/uploads/2018/04/Fardapaper-A-framework-for-strategic-sustainable-development.pdf

Covin, J. G., Garrett Jr, R. P., Kuratko, D. F., & Shepherd, D. A. (2015). Value proposition evolution and the performance of internal corporate ventures. Journal of Business Venturing, 30(5), 749-774. Retrieved on 12/2/2019. Retrieved from https://www.sciencedirect.com/science/article/abs/pii/S0883902614001062

Epstein, M. J. (2018). Making sustainability work: Best practices in managing and measuring corporate social, environmental and economic impacts. Abingdon: Routledge. Retrieved on 12/2/2019. Retrieved from http://wedocs.unep.org/bitstream/handle/20.500.11822/20081/Making_sustainability_work_Best_practices_in.pdf?sequence=1&isAllowed=y

Hák, T., Janoušková, S., & Moldan, B. (2016). Sustainable Development Goals: A need for relevant indicators. Ecological Indicators, 60, 565-573. Retrieved on 12/2/2019. Retrieved from https://www.sciencedirect.com/science/article/pii/S1470160X15004240

Holden, E., Linnerud, K., Banister, D., Schwanitz, V. J., & Wierling, A. (2017). The imperatives of sustainable development: needs, justice, limits. Abingdon: Routledge. Retrieved on 12/2/2019. Retrieved from https://brage.bibsys.no/xmlui/bitstream/handle/11250/2465433/TheImperativesofSustainableDevelopment.pdf?sequence=6

Montabon, F., Pagell, M., & Wu, Z. (2016). Making sustainability sustainable. Journal of Supply Chain Management, 52(2), 11-27. Retrieved on 12/2/2019. Retrieved from https://onlinelibrary.wiley.com/doi/abs/10.1111/jscm.12103

Nadec.com.sa (2019). Retrieved on 12/2/2019. Retrieved from http://www.nadec.com.sa

Rowledge, L. R., Barton, R., Brady, K., Fava, J., Figge, C., Saur, K., & Young, S. (2017). Mapping the Journey: case studies in strategy and action toward sustainable development. Abingdon: Routledge. Retrieved on 12/2/2019. Retrieved from http://fabletext.info/kevin-s-brady-mapping-the-journey-case-studies-in-strategy-and-action-toward-sustainable-development-fable-text.pdf

Rudd, M. A., Andres, S., & Kilfoil, M. (2016). Non-use economic values for little-known aquatic species at risk: comparing choice experiment results from surveys focused on species, guilds, and ecosystems. Environmental management, 58(3), 476-490. Retrieved on 12/2/2019. Retrieved from https://link.springer.com/article/10.1007/s00267-016-0716-0

Siva, V., Gremyr, I., Bergquist, B., Garvare, R., Zobel, T., & Isaksson, R. (2016). The support of Quality Management to sustainable development: A literature review. Journal of Cleaner Production, 138, 148-157. Retrieved on 12/2/2019. Retrieved from http://publications.lib.chalmers.se/records/fulltext/232236/local_232236.pdf

Zhang, X., Davidson, E. A., Mauzerall, D. L., Searchinger, T. D., Dumas, P., & Shen, Y. (2015). Managing nitrogen for sustainable development. Nature, 528(7580), 51-60. Retrieved on 12/2/2019. Retrieved from https://www.nature.com/articles/nature15743

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