Developing Business Opportunities Systematically

Developing Business Opportunities Systematically

As in nature, survival in business requires the constant fueling of new growth. Astute businesspeople are always on the lookout for opportunities for new products, new uses for existing products, new markets and other opportunities for incremental profit. The environmental marketplace represents a fertile area for entrepreneurs and established businesses.

According to The Economist, for far-sighted companies, the environment may turn out to be the biggest opportunity for enterprise and invention the industrial world has ever seen.

Indeed, the scope of possible new environment-related enterprise is virtually limitless. Environmental issues affect everybody's lives everywhere, encompass such basic needs as food, clothing, shelter, energy and transportation, and need to be addressed internationally, regionaly and localy.

Mining such opportunities takes creativity. Following are some questions to ask for uncovering opportunities in a systematic fashion for your own business.

Consumer Values:

Can we address new consumer values? Consumers want personal empowerment; they're loyal to the brands of companies that are benign to the environment. According to a recent survey by American Demographics, approximately 50% of American consumers look for environmental labeling and switch brands based on environmental friendliness.

Strong loyalty is enjoyed by such deep green entrepreneurial brands as Tom's of Maine, Stonyfield Farm and Patagonia. Note that these companies have a new breed of highly visible CEOs who personally embody their corporation's environmental commitment.

Another emerging value that coincides with the environment is "taking personal charge of one's health." The significant 25-plus percent annual growth of organically grown foods over the past several years exemplified by such ventures as the Whole Foods chain of alternative supermarkets and Earth's Best organic baby foods (acquired by Heinz) underscore this opportunity.

Pressing Environmental Concerns:

Can we develop new products that address compelling environmental issues? Vision Paper's Trailblazer is a "tree-free" paper made from kenaf, a fast-growing plant that is related to cotton. It requires less energy and fewer chemicals in manufacturing than conventional paper made from trees. Vision Paper is positioning this environmentally preferable product as a way that forward thinking companies can project positive environmental imagery.

One of the hottest appliances these days is Maytag's Neptune washer. Developed in response to energy-saving regulations, it saves consumers approximately $100 per year in energy and water bills and claims to wash clothes better than top-loading washers. Consumers are willing to pay a super-premium price for this unique washer that has recharged its company's sales.

Complementary Products:

Can complementary products be developed to increase the effectiveness of other new environmentally sustainable products? Sometimes, new products stimulate demand for other new, complementary products. Procter & Gamble seized on this opportunity by developing Tide HE (for high efficiency), a detergent reformulated for compatibility with Maytag's Neptune washing machines.

When the need to recycle came to the fore in the late 1980s, United Parcel Service started a venture called Authorized Return Service to facilitate the takeback of used toner cartridges and other recyclables. Customers include Apple, Canon and Hewlett-Packard.

Services:

Can new services be developed as a replacement for or an addition to existing products? Service is a new buzzword among proponents of environmental sustainability looking for opportunities to dematerialize, e.g., meet needs with less resources and energy. Using integrated pest management in place of pesticides replaces "stuff" with "know-how." Substituting telephone answering machines with electronic voice mail replaces "stuff" with electronic information technology.

Business opportunities also exist for what is known as "products of service." Interface Corporation's Evergreen Carpet Lease provides customers with what they need: carpeting and maintenance, while Interface retains ownership of the actual carpet, which it can eventually recycle. The Evergreen Lease creates an incentive to manufacture a long-lasting product, as well as to establish an enduring relationship with customers.

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Jacquelyn Ottman is president of J. Ottman Consulting, Inc., a NYC-based marketing consulting firm that advises companies on how to develop and market environmentally sound products. She is the author of Green Marketing: Opportunity for Innovation, available from the GreenBiz Bookstore. This column is © J. Ottman Consulting, Inc., and is reprinted from In Business magazine, a GreenBiz News Affiliate.
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