This is a complete summary of the course 'Sustainable Entrepreneurship' given in the Master Strategy Implementation. This summary contains the most important aspects of all the necessary papers for this course. The summary is build on the given lectures.
This paper analyses the interplay between ‘Greening Goliaths’ and ‘Emerging Davids’ and
theorizes about how it is their compounded impact that promotes the sustainable
transformation of industries.
Greening Goliaths versus Emerging Davids
In the article, firms are divided into 2 categories:
1. Greening Goliaths → Represent larger incumbent firms using incremental innovation
to bring about sustainable development.
• The giants of the industry. The big brands that have the whole world as there
market place.
2. Emerging Davids → Are start-up and young companies introducing disruptive
innovations.
Both can play a role in contributing towards sustainable transformation but they do so in
different ways. For future success the interaction of the two types is needed.
According to Table 2, innovations can be disruptive or incremental. Only Davids introducing
disruptive innovations can be classified as demonstrating sustainable entrepreneurship.
- Sustainable entrepreneurship → Adding disruptive innovation to the characteristics of
Emerging Davids (rather new, small and social and/or environmental objectives are at
least as important as economic objectives).
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,Co-evolution
Sustainable transformation of an industry when both start-ups and incumbents influence each
other in the market.
The authors argue that:
- Incremental solutions will not be enough to maintain critical levels of natural and social
capital
- Sustainable Entrepreneurship has a role to play
- There is a need for transformational change
Definition of sustainable Entrepreneurship: ‘’The discovery and exploitation of economic
opportunities through the generation of market disequilibria that initiate the transformation of a
sector towards an environmentally and socially more sustainable state”.
Emerging Davids – Business behavior
• They are not limited by previous (technological) mindsets and are more innovative
• They are part of the solution and not seen as part of the problem
• Sustainability start-ups have a value-based approach and externalize costs by asking
customers to pay a premium for socially and environmentally superior products (and
services)
• They tend to have a single issue focus and can be less good at addressing a broader
range of sustainability issues
• Idealistic approach can lead to little or no attention to growth strategies
• They prefer to keep their nice market small and exclusive, in order to avoid incumbents
moving into their markets
Greening Goliaths – Business behavior
• Incumbents may be slow to react but are often able to catch up quickly once they have
decided to follow
• They may then benefit from being able to charge premium prices, following the price
level established by the start-up
• They can launch Venture Capital funds to monitor innovating Davids (e.g. Philips,
Sabic, Unilever)
• They may be able to influence the setting (or reduction) of environmental standards in
their favour (e.g. car industry lobby)
• They may try to keep standards fixed rather than encourage continuous improvement
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, Co-evolution – a maturity model
Introduction phase:
- David: People and/or individuals who are activists and have a mission. They have ideas
how things could be different. They have come up with a solution for a particular
problem and they started working with that, they are experimenting making that a
product. They are real idealists.
- Goliath: They are as business as usual, shareholder value, increasing market share. A
social or environmental agenda is low on their priority list. The economic drivers are for
them the important ones.
Early growth phase:
- David: the local bioneers and the social bricoleurs have to start business, they have to
start making things. They create sustainability brand start-ups. Businesses emerge.
- Goliath: They see that there Is something happening in the market (external pressure)
and therefore feel the need to do something. They want to start something that is
manageable. Create a extra brand. Introduce a sustainable production line. They keep
their corporate identity, but they add something to appeal to that market that may well
start to grow.
Take-ff phase:
- David: Some high-growth Davids become more competitive, they grow and position
themselves in the market as an real alternative to the Goliaths. Some of these High-
growth Davids are actually acquired by Goliaths.
- Goliath: Some become more green, some other once enter trying to control standards.
Maturity phase:
Sustainable production and consumption are the new norm.
Week 1 - SBM Archetypes
Context:
The world is currently using the equivalent of 1.5 planets o support human activities.
‘’Business as usual’’ is NOT an option for a sustainable future.
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