ecodesign; a trip to the deep rabbit hole

Ecovaluea trip to the deep rabbit hole

by Oriol Pascual

for educational purpose only ;-)

Traditional eco-belief or trip to wonderland?

ScienceTechnology

Financialcommunity

NGOs

MANUFACTURING COMPANY

Governments

SuppliersVoters

Customers

External Value ChainThe Matrix

Two stop trip

Overview presentation

BlueEverybody should love eco

75%Global Fortune 500 claim to do Ecodesign

Relatively mature 30%

Not interested 26%

Way to maturity 18%

Publicity driven 14%Starter & good intent 6%

First movements 6%

Ecodesign maturity profiles

Companies can do more

Technology will save us all

Eco-solutionsseem not to appeal to mass consumers

Consumers can be educatedIf not green yet, you will soon get!

Consumers are rationalWhen doing the math, they act accordingly

Designers as decision makers out of control!

StrategyManagement

Suppliers Customer

Product management

Development Marketing

Production Sales

Purchasing Logistics

Internal Value ChainThe Internal Matrix

RedQuestioning reality

Low-hanging fruit pickedRapidly reaching the limits of physics

What design option is best?from a value chain perspective

Do you understand?Communication issues with the rest of value chain

10.000 Tones of CO2...what do you

mean?

!

What fish are you catching?For the resources invested, what are the opportunities?

Value creation

business valueenvironmental load

How is ecodesign contributing to it?

To solve the equationyou have to realize that...

Ecodesign is not alone

Demand side is keyEnvironmental impact directly related to consumption power

The market is diverseeven within the Guinea Pig food market!

How?

Ecovalue

Environmental load

Product valueEcovalue =

acceptable

non-acceptable

Product value

EnvironmentalLoad

-

-

+

+0

Eco-efficiency index

at strategic & product level

Supports decision making

Setting priorities

Action oriented

Value = perceived benefitFunctional & intangible benefit

Functional value

Intangible value

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

Functional valueProduction costs

Design & tech

Subjective valueOrganizational costs

Design, brand, strategy

wholesaleprice

Retail priceWTP, pricing strategiesMarketing competition

Cost of ownership Efficiency

Energy prices

Supply side Demand side

Customer value

Price buyers Feature buyers Experience buyers

Each market segment perceives differently the trade-off product value/product price

Business valueConsumer

groupMarket size

Value captured

Price buyers 1/3 +

Special feature 1/3 ++

Experience/quality buyer

1/3 +++

Eco-efficiency index

Environmental load

Product valueEcovalue =

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

acceptable

non-acceptable

Product value

EnvironmentalLoad

-

-

+

+0

Case study: displays

Case study displays

Model Tech. Screen size

Market Price

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

Model Env. load (mPt)

Shelf price (euro)

Ecovalue

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 #1acceptable

non-acceptable

Product value

EnvironmentalLoad

-

-

+

+012

3

4

Product #2acceptable

non-acceptable

Product value

EnvironmentalLoad

-

-

+

+023

1

4

Product #3acceptable

non-acceptable

Product value

EnvironmentalLoad

-

-

+

+03

2

1

4

Product #4acceptable

non-acceptable

Product value

EnvironmentalLoad

-

-

+

+04

2 1

3

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)

oriol.pascual@gmail.comsustainablerotterdam.com