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BP's Solar Business Model - A Case Study on BP's Solar Business Case and Its Drivers
Abstract
It is often overlooked that British Petroleum (BP) was among the commercial solar energy pioneers and one of the largest fully integrated photovoltaics companies. Following the 1970s oil crises, BP built its subsidiary BP Solar. But in 2011, in the wake of changing policy regimes, falling module prices and fierce competition, BP Solar was closed. However, before these developments occurred the company had a “solar business case.” This paper shows how this business case was realised and how BP tried to maintain it. BP’s annual reporting from 1998 to 2011 was studied by means of software-supported text analysis. A framework from sustainability management research structured the re-construction of the strategic drivers and business model innovations behind BP’s solar business. It is found that an accommodative strategy was applied and realised through two business model innovation paths, i.e. the optimisation of module manufacturing combined with completely new distribution models.
... In 2000, BP launched a re-branding campaign with a new logo and the slogan 'Beyond Petroleum', a very radical translation of external demands for a more sustainable energy system into BP's corporate mission and narrative. In fact, BP had already been active in the solar industry since the early 1980s with its subsidiary BP Solar, a major player in the global photovoltaics sector with market shares reaching up to 20% [86]. In-depth case studies and analyses of other forms of official communication by BP beyond the overall brand claim868788 have shown that the newly emerging corporate narratives are not only proactively focusing on sustainable energy futures, but rather evolve from a more defensive logic of avoiding risks related to societal demands, guaranteeing safety and protecting the license to operate, especially after large oil spills, such as the one caused by the Deepwater Horizon incident, and diversifying in the face of decreasing growth of the industry as a whole. ...
... In fact, BP had already been active in the solar industry since the early 1980s with its subsidiary BP Solar, a major player in the global photovoltaics sector with market shares reaching up to 20% [86]. In-depth case studies and analyses of other forms of official communication by BP beyond the overall brand claim868788 have shown that the newly emerging corporate narratives are not only proactively focusing on sustainable energy futures, but rather evolve from a more defensive logic of avoiding risks related to societal demands, guaranteeing safety and protecting the license to operate, especially after large oil spills, such as the one caused by the Deepwater Horizon incident, and diversifying in the face of decreasing growth of the industry as a whole. An effort was made to translate sustainability demands into established narrative patterns of a typical incumbent, presenting BP as a modern and leading company in the energy sector: " 'The world's biggest . . . ...
... An effort was made to translate sustainability demands into established narrative patterns of a typical incumbent, presenting BP as a modern and leading company in the energy sector: " 'The world's biggest . . . ' was a phrase commonly employed " [86] (p. 311). ...
In the context of the larger sustainability discourse, “sufficiency” is beginning to emerge as a new value throughout Western societies, and the question asked in this article is: Can we observe and conceptually identify opportunities to link successful business strategies of incumbents to principles of sufficiency? Thus, how feasible is sustainable entrepreneurship for incumbents? In this paper, a conceptual approach is developed combining insights from sociology, transition research, management and sustainable entrepreneurship research with a focus on narratives as a translation mechanism in situations where tensions emerge between corporate narratives and unexpected societal trends, e.g., the emergence of sufficient lifestyles. It will be shown that even though these are still a niche phenomenon, a focus on corporate narratives is an important element in understanding the role of incumbents in transitions to sustainability.
... The interplay between strategy, business model and operations indicated in Figure 1 is widely discussed in the traditional business model literature. A corresponding discussion in the fields of corporate sustainability management and sustainable business model innovation is just emerging (e.g., Lüdeke-Freund, 2014;Schaltegger et al., 2012). It is widely acknowledged that 'a business model is the direct result of strategy' and that the business model in turn delineates a spectrum of feasible tactics and operational activities (Casadesus-Masanell & Ricart, 2010, p. 212). ...
... Different degrees of incremental and radical strategies lead to different degrees of incremental and radical business model innovations, ranging from incremental adjustments to radical redesigns (e.g., Lindgren & Taran, 2011;Lüdeke-Freund, 2014;Mitchell & Coles, 2003;Schaltegger et al., 2012). The classification proposed in Table 2 German energy utilities support this assumption. ...
As any type of innovation, business model innovation is a means to alter and extend the ability of firms to act effectively and efficiently. With its focus on proposing and creating value, business model innovation has become a major technique to develop new and change existing forms of organizational value creation. The emerging field of research and practice on sustainable business models (SBMs) has taken up this approach in order to understand and develop new forms of value creation that offer sustainable value propositions to customers and all other stakeholders, and that allow firms to capture economic value while they maintain or even regenerate natural, social and economic capital. This chapter proposes a framework of sustainable business model innovation (SBMI), building on one decade of SBM research, and relates SBMI explicitly to the vision of sustainable development. We show that a major task of SBMI is to translate sustainability strategies into actionable 'blueprints' of value-creating activities of firms. SBMI addresses so called business case drivers, referring to costs, risks, reputation, etc. and successful SBMI improves these business case drivers by integrating positive contributions to a sustainable development of the natural environment and society and business success. The conceptual considerations are illustrated with a case of an ecologically and socially motivated business.
... switching from anonymous and mass-processed travel plans to individually customized journeys). Freund, 2014;schaltegger, lüdeke-Freund, & hansen, 2012) insight Engaging in business model innovation is a deliberate decision. ...
... These changes are most prominently represented by cases from the energy or automotive industry in which "old" and "new" business rationales compete with each other (e.g. Abdelkafi, Makhotin, & Posselt, 2013;Bohnsack, Pinkse, & Kolk, 2014;Lüdeke-Freund, 2014;Pinkse & van den Buuse, 2012;Richter, 2013). In most of the literature we surveyed, the most innovative cases referred to new companies (e.g. ...
Practitioners and researchers have witnessed the rise of two new, yet very popular, concepts: business model innovation and shared value creation. To better understand their joint potential, this NBS South Africa report examines how business models can provide a platform for sustainability and shared value creation. This report provides a synthesis of the literature and practice of business models for shared value. The report provides insights related to the idea of business models for shared value, including: A view of business as an engine of societal progress. A broader notion of value — from primarily economic to also social and environmental. A system-level perspective on value creation — from being predominantly centred on customers and shareholders to embracing firm’s stakeholders.
Geared at researchers, the main report starts from expectations for business models for sustainability and shared value, briefly presenting major topics found in academic literature. With the goal of offering a language and a way of thinking to support the identification of opportunities for shared value and to support the design of innovative business models, the report introduces two new frameworks: the Hourglass Model and a Strategy Roadmap Model.
... Several scholars have already categorized SBMs on the basis of case studies(Bocken et al., 2014;M. W. Johnson & Suskewicz, 2009;Lüdeke-Freund, 2013;Stubbs & Cocklin, 2008). With this regard, fundamental mechanisms are analyzed and presented. ...
The desire of the population for environmentally friendly mobility without burdening social fairness and human rights is constantly increasing and the achievements and conveniences in mobility that have been reached so far are to be safeguarded. A solution for this can be electromobility along with new business models to support it. The question is: what kind of business model is able to fully develop the potential of electromobility?The aim of the thesis is to contribute to the literature on sustainable business models through the lens of the fast-growing market of electromobility. For this purpose, the concept of electromobility is analyzed and defined in a comprehensive manner. Also, the key elements of electromobility are revealed, underlining the basic principles of value proposition for customers.Electromobility is based on new technologies. However, it is shown that technology alone is not sufficient and the business model is an essential vector of innovation. Conventional and sustainable business models are discussed. The latter have a special significance for electromobility, as they already consider the environmental and social aspects of business alongside the economic one.A new framework in order to analyze and/or to design sustainable business models for electromobility is proposed. It allows to better support the specific key values of electromobility. The framework of sustainable business models for electromobility (SBMEM) has to be based on close cooperation between producers, suppliers, and providers. An ecosystem has to be formed in which the individual value chains of the involved companies in electromobility are interlinked; they contribute all together to the value proposition and the value creation and delivery. In the framework, the environmental, social and economic dimensions are transversal to the basic elements “value proposition”, “value creation and delivery” and “value capture”, considered on the basis of a comprehensive ecosystem.The framework of SBMEM is then used to analyze different existing business models of electromobility. It is shown that the latter are not sufficient for the success of electromobility because they take too little or no account of all of the environmental, social and economic aspects of the innovation.The theoretical framework developed in this study contributes to the architecture of electromobility business model and aims to broaden the understanding of the role and applicability of business models in sustainability-oriented innovations and services. This framework is intended to enable the design of new sustainable business models for electromobility or to review existing business models and draw conclusions on which measures will make them more sustainable.This new framework enables companies to find a compromise between the different dimensions of the approach. In doing so, they can satisfy the growing needs of the population regarding mobility, the preservation of environment and social fairness while achieving their business objectives.The proposed SBMEM framework was discussed based on five case studies. It reveals to be a valuable tool both to analyze existing business models and to structure business models for future businesses.
... However, research in this field is still rather limited with regard to both rigorous theoretical frameworks and empirical analyses (Bocken et al., 2014;Boons et al., 2013;Boons and Lüdeke-Freund, 2013;Schaltegger et al., 2016). Prominent practical examples of potentially sustainable business models often refer to the automotive industry and mobility concepts (Abdelkafi et al., 2013;Cohen and Kietzmann, 2014;Johnson and Suskewicz, 2009;Wells, 2013b), renewable energies (Loock, 2012;Lüdeke-Freund, 2014;Richter, 2012;Wüstenhagen and Boehnke, 2008) and social enterprises (Seelos andMair, 2005, 2007;Yunus et al., 2010). ...
Supply chains and business models are of general importance for any company. Due to these concepts’ overarching and interlinking nature, they are of particular importance for companies engaging in sustainable entrepreneurship and sustainability management. These companies look over the rim of their organizations’ boundaries—motivating research and practice dealing with sustainable supply chains (SSCs) and sustainable business models (SBMs). SSCs and SBMs come from different origins and use, but are highly interrelated, both in theory and practice, one building in part on the other often without recognition by scholars and practitioners in both fields. Therefore, this chapter compares the main characteristics of SSCs and SBMs as discussed in current academic literature and investigates the conceptual similarities, differences and areas where both can complement each other. Sustainability-oriented extensions of supply chain and business model concepts are meant to bring together multiple stakeholders, their needs and perceptions of value, going beyond suppliers and customers and including local communities (e.g. in the case of social business models) or post-consumer actors (e.g. in the case of closed-loop supply chains). Because of their shared potential to foster multi-stakeholder perspectives on value creation, particular analogies between supply chains and business models can be discerned. A framework is introduced comparing both concepts, highlighting their complementary and distinguishing characteristics. The resulting integrated perspective on value creating activities provides more clarity for those engaging in conceptual and practical SSC and SBM design and management.
... But preceding studies have proven the strength and value of comparable research strategies to discover organisational dynamics that lie under the surface of the most visible day-to-day business activities and official communications (e.g. Lüdeke-Freund, 2014; Wells, 2016). The paper is structured in the following manner. ...
This paper argues that only fundamental innovations in the governance structures, technologies, and business models of companies will enable the full development of sustainable manufacturing. This argument motivates the development of an analytical framework that integrates the concepts of governance, eco-design, and business model. This framework is used to study the case of Welsh car designer Riversimple. In an attempt to redefine the foundations of individual mobility, Riversimple not only uses new technologies such as fuel cells but also introduces an alternative governance system and a new business model that deviates radically from the traditional car industry. Following an engaged scholarship approach, we study Riversimple through personal access to the company’s leadership team as well as systematic qualitative content analysis. Instead of assuming that one of the analysed components (governance structure, technology, or business model) determines the others, we assume rather co-evolutionary and mutual dependencies. That is, Riversimple’s governance structure can only be implemented successfully together with the technologies and business model applied, and vice versa, and all three components are in a state of dynamic development. Our analysis thus faces the challenge of the historic reconstruction of these components at Riversimple.
... However, research in this field is still rather limited with regard to both rigorous theoretical frameworks and empirical analyses (Bocken et al., 2014;Boons et al., 2013;Boons and Lüdeke-Freund, 2013;Schaltegger et al., 2016). Prominent practical examples of potentially sustainable business models often refer to the automotive industry and mobility concepts (Abdelkafi et al., 2013;Cohen and Kietzmann, 2014;Johnson and Suskewicz, 2009;Wells, 2013b), renewable energies (Loock, 2012;Lüdeke-Freund, 2014;Richter, 2012;Wüstenhagen and Boehnke, 2008) and social enterprises (Seelos andMair, 2005, 2007;Yunus et al., 2010). ...
Supply chains and business models are of general importance for any company. Due to these concepts’ overarching and interlinking nature, they are of particular importance for companies engaging in sustainable entrepreneurship and sustainability management. These companies look over the rim of their organizations’ boundaries—motivating research and practice dealing with sustainable supply chains (SSCs) and sustainable business models (SBMs). SSCs and SBMs come from different origins and use, but are highly interrelated, both in theory and practice, one building in part on the other often without recognition by scholars and practitioners in both fields. Therefore, this chapter compares the main characteristics of SSCs and SBMs as discussed in current academic literature and investigates the conceptual similarities, differences and areas where both can complement each other. Sustainability-oriented extensions of supply chain and business model concepts are meant to bring together multiple stakeholders, their needs and perceptions of value, going beyond suppliers and customers and including local communities (e.g. in the case of social business models) or post-consumer actors (e.g. in the case of closed-loop supply chains). Because of their shared potential to foster multi-stakeholder perspectives on value creation, particular analogies between supply chains and business models can be discerned. A framework is introduced comparing both concepts, highlighting their complementary and distinguishing characteristics. The resulting integrated perspective on value creating activities provides more clarity for those engaging in conceptual and practical SSC and SBM design and management.
... METHODOLOGY Yin (2003) describes business research as a complex social phenomenon that requires a qualitative approach. Because the qualitative research approach allows the researcher to make interpretations of empirical data (Freund, 2013), data collection is crucially important to overcome any problems of interpretation. To answer the research question in this study, we therefore took a qualitative research approach and used the deductive research method (Bryman & Bell, 2007). ...
Since the end of 1990s the growth of new energy and renewable energy production has been strong
and increasing. Wind power energy has become one important source of energy almost all over the
world. Europe, USA and Asia has become the leading markets in the development of wind energy.
The total volume of global wind energy production has increased from 13,600 MW in 1999 to
318,137 MW in 2013.
Since 2006 the wind energy industry is showing very rapid growth as well as dynamics among major
industry actors. Some companies has left the industry due to havy competion, some has used the
growth as an opportunity to expand and the inceasing demand and the growth in the wind energy
sector has opened opportunities for new actors to enter the industry. China has very fast become
the largest country in the world in terms of installed wind energy capacity (28,7% share of total
installed capacity and 45,4 % share of installed capacity in 2013). China is followed by Germany, UK
and India. USA is now on the 6th place regarding the share of new installed capacity in 2013 with 3,1
%. Sweden is on the 9th global place, shared with Romania, with 2.0 % installed capacity in 2013.
The study focuses on the industry dynamics among major wind turbine producers during the period
of 2006 and 2013. The study explores how the seven top wind energy companies, with the greatest
market share of wind turbine manufacturing, used business model innovation to create competitive
advantage, how they act to sustain competitive, and how they act business wise globaly in the wind
energy industry.
Our analysis identifies three major industry clusters based on their mix of business model
components. We have labeled those three as “Born in Wind – Stay In Wind”, “Born In Wind – Expand
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In Others” and “Born In Others – Expand In Wind” due to the patterns of actors from their origin,
growth and expansion strategies to diffusion in different markets. The majority of manufacturers
have their origin outside wind energy industry, and they create success through new combinations
of resources and new value creation for customers. Only one global actors is born in the wind energy
and is still remaing in the wind energy industry. All actors have over the years reshaped their
business model components, value propositions and value creation to customers in order to sustain
competitive on the market. There are new comers in the wind turbine industry that in short of time
has achieved high growth and high market shares. Our analysis shows that the business model
innovation can be seen as one important perspective to understand the dynamics of wind power
industry. Based on our analysis and findings we suggest that companies in the future even more
should focus on the design and innovation of their business models, and that those should have the
focus on the value creation for customers from a customer perspective and make differentiation
from their competitors in the global wind power industry.
This article introduces the business models for sustainability innovation (BMfSI) framework to study how business models mediate between sustainability innovations and business cases for sustainability. The BMfSI framework integrates two major perspectives (implicitly) found in the sustainable business model literature. The first is the agency perspective. It takes into consideration that some form of agency is needed, that is, “someone” who takes decisions and acts. Sustainable entrepreneurs are discussed as those agents who align their new or existing business models with sustainability innovations in order to be successful in business and to create value with and for stakeholders. The second perspective is the systems perspective, which acknowledges that business models are always embedded within sociotechnical contexts through which, for example, public policies, private financing, or stakeholder interests influence whether and how business models can be developed. The agency and systems perspectives are integrated in the so‐called business model mediation space. This theoretical notion embraces the decisions and activities pursued by sustainable entrepreneurs as they align their business models with sustainability innovations on the one hand and the influence of environmental contingencies, barriers, and stakeholders from the sociotechnical context on the other hand. The paper concludes with propositions for future research derived from the BMfSI framework.
A sustainable economy fulfills societal needs in a fundamentally different way to the current economic system. Improvements to the efficiency of existing technologies or practices appear insufficient for achieving sustainable development within the planetary boundaries. Disruptive, systemic and transformational changes appear necessary in order to replace existing technologies and practices to establish a sustainable economy. Such innovations often start out in niches; however, the scaling up and the ultimate replacement of current socio-technical systems requires governance to allow for the coordination of actors, the reorganization of socio-technical systems and the mobilization and allocation of resources. As governmental institutions are part of the current (non-sustainable) systems and thereby fail to provide coherent, integrated and transformative governance, we explore whether institutional innovation from non-state actors can step in to provide governance of transformation processes. Based on explorative qualitative case studies of networks in the food sector, city planning and reporting tools, we analyze the potential of bottom-up institutional innovations to coordinate actors in transformation processes.
Decarbonization has been identified as necessary to preventing catastrophic climate change, creating a dilemma for the global oil industry. This article examines the industry's reaction to this dilemma and focuses on its historical response to market and governmental regulatory pressure. The article argues that differing national climate policies provoked some oil companies to develop proactive decarbonization strategies. However, the continued growth of fossil fuel demand, the industry's vested interests, and the voluntary nature of climate governance have resulted in the industry taking very little meaningful action to achieve decarbonization.
In food supply chains, products and services are continuously expanded and adapted according to changing customer demands. As concerns for environmental and social issues within societies grow, sustainable business practices in supply chains are coming to the fore. Altogether customers’ growing demand for local food has led to an increased importance of local food production and distribution networks. In this context, the present study analyzes sustainability-related practices in two local food production and distribution networks in Germany and Austria applying a multiple-case study approach to understand how business models can facilitate sustainable practices within the food industry. By comparing the selected cases, insights were derived with regard to sustainable business model elements in local food networks, in particular promoting logistics and financial coordination in the supply chain. Thus, the article builds on academic literature by identifying and describing key elements of sustainable business models in local food networks. At the same time, it can be argued that sustainable business models have to be accepted by consumers such that sustainability advantage aspects need to be stressed through external communication. Managerial implications with regard to transferability and scaling of regional food businesses are provided accordingly.
NaWiKo Synthese Papier der Projekte RegioTransKMU und ILoNa
(bei de Projekte wurden mit den Mitteln des Bundesministeriums für Bildung und Forschung unter den Förderkennzeichen 01UT1406B und 01UT1403A gefördert)
Das Thema unternehmerische Nachhaltigkeit hat seine akademische Nische verlassen und ist zu einem prominenten Bestandteil der unternehmerischen Praxis geworden. Während es zum guten Ton gehört, sich als wettbewerbsfähig und zugleich ökologisch und sozial verantwortungsvoll zu positionieren, haben sich einige Pioniere auf den Weg gemacht, dieses Thema auf der Ebene von Geschäftsmodellen anzugehen. Der vorliegende Beitrag befasst sich mit den Zusammenhängen zwischen den Herausforderungen der unternehmerischen Nachhaltigkeit und der Entwicklung entsprechender Geschäftsmodelle. Der Beitrag verknüpft das Geschäftsmodell mit dem „Business Case for Sustainability“ und der übergeordneten Nachhaltigkeitsstrategie. Des Weiteren werden Geschäftsmodelle als Plattform zur Durchsetzung von Nachhaltigkeitsinnovationen diskutiert und abschließend wird ein Blick auf das derzeit verfügbare umsetzungsnahe Wissen geworfen. Insgesamt werden wesentliche Eckpunkte für einen Geschäftsmodellprozess vorgeschlagen, der die Phasen Analyse, Innovation und Umsetzung umfasst. Anstelle eines „How to?“ Leitfadens lassen sich gegenwärtig jedoch vor allem konzeptionelle Überlegungen in diesen Prozess einordnen. Hierauf können Forscher und Praktiker aufbauen, um ihren Interessen entsprechend die nächsten Entwicklungsschritte in Richtung eines konsistenten nachhaltigkeitsorientierten Geschäftsmodellmanagements zu gehen.
Die deutsche Wirtschaft kann von zusätzlichen nachhaltigen Geschäftsmodellen profitieren. Die Potenziale liegen in allen Wirtschaftsbereichen und lassen neben dem persönlichen Erfolg von Unternehmensgründern und etablierten Unternehmen vor allem mehr Arbeitsplätze erwarten. Zwar wird es niemals eine komplette Durchdringung durch nachhaltige Geschäftsmodelle geben, doch sollte sich jedes Unternehmen auf den Weg zu mehr Nachhaltigkeit begeben. Die Beschäftigten, die Umwelt, die nachfolgenden Generationen und der Unternehmer können davon profitieren. Dieses Kapitel präsentiert einen integrierten Ansatz für die Entwicklung bzw. Weiterentwicklung nachhaltiger Geschäftsmodelle.
This thesis starts with a conceptual framework about sustainability and BM (business model), inquiring if something, as a green business model could exist. Thanks to Ehrenfled (2005) and others, notion of BMF (business model for flourishing future) is defined. The question is now how to introduce managers to BMF theory and practice? Was does it demand as cognitive effort? And how can it be stimulated by gamestorming as a learning space enabling new concept formation like new flourishing practices.
Chapter one is dedicated to literature review, conceptual framework building and research problem definition. This chapter contrasts BM as developed under a more traditional computational-interpretative cognitive view with BMF building asking for new preconditions being situated cognition and macrocognition. In this way, actors design a BMF through their sensorimotor interface to socio- and physical materiality where meaning emerges from multiple interactions. Also a BMF becomes a shared public object open to social competence development in a situation where macrocognition principles apply.
Chapter two takes stock of a teaching/learning experiment with an MBA classroom in which students had to handle—in the same course—both Business Model Canvas (BMC) and a rather abstract organizational modeling (OM) (Morabito and al., 1999) connected to knowledge management (KM) approaches. This learning experiment is a case of thick design inside an inverted classroom to explore the following idea: if more socio- and physical materiality is part of domain design, the more complex are the cognition requirements and the cognitive load. The chapter ends by associating weak sustainability with thin design and strong sustainability with thick design and by synthetizing key elements such as cognitive processes, ontologies contributions and computer-based support in both business model canvas (BMC) and organizational architecture (OA) approaches.
Chapter three delves more deeply into greening issues. This chapter presents a table game experiment with Logim@s© that occurred in the sustainability division of a large Canadian city: the four players were sustainability directors and professionals. The game is based on Steven Moore's book (2007) that exposes storylines, logical modes and discourses that enable three very different cities (Curitiba, Austin and Frankfurt) to deploy sustainability leadership. A thick design challenge lies at the heart of the experiment: how can a player connect the BMC approach with each city’s contradictory discourses and ‘abductive’ sentences on the physical materiality axis? Are the players in an inductive/deductive logical mode, or will they move on to abductive mode?
Chapter four examines how Logim@s© could become an open gamestorming platform, let’s call it SustAbd©. This chapter has two parts: the first part is a reflection on the game design process in order to justify a platform-architecture approach made up of the SustAbd© core and the SustAbd© periphery, and a second part, where five key UML use cases are proposed.
Chapter five builds on this researcher’s experience as a human tutor in inverted teaching and gamestorming experiences. The intent in this chapter is to adopt cognitive modeling (CM) as an approach devised to replace a human tutor with an embedded robot. This chapter continues with thoughts about situatedness and situated robots borrowed from Clancey (1997) work on situated robots. Those ideas enable to devise SustAbdPLAY© in accordance with situatedness and macrocognition by making distinction between individuals devising a new course of actions inside a community compliant with macrocognition conditions and individuals acting under instructions from others inside a hierarchy. Then new UML use cases are derived like getting to know each other’s and establishing a players’ community.
A conclusion ends the thesis.
This cumulative dissertation deals with the relationships between business models, sustainability innovations, and the business case for sustainability. Its main purpose is to define theoretical and conceptual interrelations between these concepts. According theoretical foundations are developed and combined with empirical studies on the solar photovoltaic industry. This industry is particularly suitable for this kind of research because of its increasing maturity paired with public policy and market dynamics that lead to a variety of business model challenges. The overarching research question is: How can business models support the commercialisation of sustainability innovations and thus contribute to business cases for sustainability?
Theoretical and conceptual foundations are developed from a systematic literature review on the role of business models for technological, organisational, and social sustainability innovations. Further, business model innovation is linked to sustainability strategies and the business case for sustainability. These foundations are applied in an in-depth case study on BP Solar. Moreover, because supportive public policies and the availability of financial capital are important preconditions for commercial success with solar innovations, the dissertation contains a comparative public policy study as well as a conjoint experiment to explore debt capital investors’ preferences for different photovoltaic business models.
The main contribution of this work is the “Business Models for Sustainability Innovation” (BMfSI) framework. It is based on the idea that business models are artificial and social constructs that fulfil different functions based on social interaction and their deliberate construction. The framework emphasises the mediating function, i.e. the iterative alignment of business model elements with company-internal and external factors as well as with the characteristics of environmentally and socially beneficial innovations.
British Petroleum (BP) gehörte zu den ersten Ölkonzernen, die Solartechnologien im großen Stil kommerzialisiert haben. BP bzw. das Tochterunternehmen BP Solar galt zeitweise als eines der größten vollintegrierten Solarunternehmen der Welt. Es wurde in Folge der Ölkrisen der 1970er Jahre und als Teil einer allgemeinen Diversifikationsstrategie gegründet und avancierte später zum zentralen Element der Corporate Social Responsibility (CSR) und Nachhaltigkeitsaktivitäten des Konzerns. Jedoch wurde BP Solar im Dezember 2011 aufgrund schwieriger Industrieentwicklungen und unzureichender Erfolgsaussichten aufgelöst. Interessanterweise war das Unternehmen in der jüngeren Vergangenheit durchaus in der Lage, einen „Solar Business Case“ zu realisieren, d. h. geschäftlichen Erfolg auf Basis umweltschonender Solartechnologien. Das Kapitel untersucht wie dieser Erfolg erzielt wurde und wie durch Geschäftsmodellinnovationen und einen Prozess der Geschäftsmodellevolution der Erfolg erhalten und ausgebaut werden sollte – was schließlich jedoch nicht ausreichend gelungen ist. Für diese Untersuchung wurden die jeweils 14 Jahres- und Nachhaltigkeitsberichte des Konzerns von 1998 bis 2011 (1.854 Seiten) sowie 359 Pressemitteilungen und Reden (1.505 Seiten) mithilfe der Textanalysesoftware MAXQDA ausgewertet. Das Ziel war die Rekonstruktion des Geschäftsmodells und der Geschäftsmodellinnovationen hinter BPs Solaraktivitäten. Als theoretischer Untersuchungsrahmen wurde das „Business Case for Sustainability“-Konzept aus der Nachhaltigkeitsmanagement-Forschung herangezogen. Diese Untersuchung zeigt, dass die Entwicklung von BP Solar auf einer Geschäftsmodellevolution basierte, die zwei klar unterscheidbare Innovationspfade integrierte, den „Optimierungs-“ und den „Marktentwicklungspfad“.
The disruptive nature of many sustainability solutions may be the main barrier to their implementation and dispersal: adopting a business model perspective may help address this problem. Previous literature has explored how organizations can convert their supply chains and customer interfaces toward a sustainability focus, but has generally not considered links to other business model elements—such as value propositions and financial models—in exploring business model transitions. Moreover, the implementation of sustainable solutions often relies on projects being implemented and managed collectively, so that organizations need to adapt their business models to deliver value propositions collectively, a phenomenon that research on business models for sustainability should address. This article addresses these issues by exploring changes in business model elements in detail via an in-depth qualitative study of two French sustainable urban projects—Caserne de Bonne and IssyGrid®. Our results show, first, that it is worth considering the role played by business model elements (the value proposition and the financial model) that literature does not usually discuss in enabling the management of or transition to business models for sustainability. Second, considering all four business model elements allows us to develop a typology of their transformations in organizations working toward sustainable solutions. Third, introducing the necessary collective dimension of sustainable solutions highlights the role of agency in facilitating their development and adoption.
Drawing on the strategic issue interpretation literature, this study examined links between managerial interpretations of environmental issues and corporate choice of environmental strategy among 99 firms in the Canadian oil and gas industry. Environmental strategies ranging from conformance to regulations and standard industry practices on the one hand to voluntary actions for environmental preservation on the other were found to be associated with managerial interpretations of environmental issues as threats or as opportunities. Differences in managerial interpretations were influenced by certain factors in the organizational context, including the legitimation of environmental issues as an integral aspect of corporate identity and the discretionary slack available to managers for creative problem solving at the interface of the business and the natural environment.
While the societal salience of environmental issues appears to have risen substantially in recent years, relatively little is known regarding how environmental responsiveness has evolved over time within business in general, or within particular private sector organizations. In this study we seek to address this deficit by exploring the evolving pattern of environmental strategy within a large sample of US companies over the period 1997 to 2006. Based on evolutionary theories of selection and adaptation as well as Burgelman's strategic change processes, we characterize the pattern of evolving responses to natural environmental issues, distinguish between changes in the overall attention paid to environmental issues that are attributable to the forces of adaptation and selection, and examine the distinctive characteristics of those organizations that have exhibited the most dramatic improvements in their environmental strategy. Our findings indicate that while there is widespread inertia in respect of environmental responsiveness within our sample of companies, those companies that have achieved significant improvements in their environmental strategies do so as a result of a combination of autonomous and induced change processes. Such companies have often recently appointed a new CEO, are relatively strongly engaged in research and development, and have strong prior achievements in environmental strategy.
We integrate perspectives from the literature on contingency, dynamic capabilities, and the natural resource-based view of the firm to propose how dimensions of the general competitive environment of a business will influence the development of a dynamic, proactive corporate strategy for managing the business-natural environment interface. We also explain how certain characteristics of the general business environment-uncertainty, complexity, and munificence-moderate the relationship between the dynamic capability of a proactive environmental strategy and competitive advantage. We conclude with a discussion of implications for research and practice.
The Fifth Edition of the “PV Status Report” tries to give an overview about the current activities
regarding Research, Manufacturing and Market Implementation. I am aware, that not every country
and development is treated with the same attention, but this would go beyond the scope of this report.
Nevertheless, I hope that this report will be a useful overview about the situation world-wide. The
opinion given in this report is based on the current information available to the author, and does not
reflect the opinion of the European Commission.
Photovoltaics is a solar power technology to generate Electricity using semiconductor devices, known as solar cells. A number of solar cells form a solar "Module" or "Panel", which can then be combined to solar systems, ranging from a few Watts of electricity output to multi Megawatt power stations. The unique format of the Photovoltaic Status Report is to combine international up-to-date information about Research Activities with Manufacturing and Market Implementation data of Photovoltaics. These data are collected on a regular base from public and commercial studies and cross-checked with personal communications. Regular fact-finding missions, with company visits as well as meetings with officials from funding organisations and policy makers, complete the picture. Growth in the solar photovoltaic sector has been robust. Yearly growth rates over the last five years were on average more than 40%, thus making photovoltaics one of the fastest growing industries at present. Business analysts predict that the market volume will increase to € 40 billion in 2010 and expect rising profit margins and lower prices for consumers at the same time. The PV Status Report provides comprehensive and relevant information on this dynamic sector for the public interested, as well as decision-makers in policy and industry.
Photovoltaics is a solar power technology to generate Electricity using semiconductor devices, known as solar cells. A number of solar cells form a solar “Module” or “Panel”, which can then be combined to solar systems, ranging from a few Watts of electricity output to multi Megawatt power stations. The unique format of the Photovoltaic Status Report combines international up-to-date information about Research Activities with Manufacturing and Market Implementation data of Photovoltaics. These data are collected on a regular basis from public and commercial studies and cross-checked with personal communications. Regular fact-finding missions with company visits, as well as meetings with officials from funding organisations and policy makers, complete the picture. Growth in the solar Photovoltaic sector has been robust. Yearly growth rates over the last five years were on average more than 40%, thus making Photovoltaics one of the fastest growing industries at present. The PV Status Report provides comprehensive and relevant information on this dynamic sector for the public interested, as well as decision- makers in policy and industry.
The market implementation of photovoltaic (PV), and the potential to expand research and development program is discussed. The use of wafer silicon devices technology in meeting the demand of 50 MWp annual capacity will be accelerated by the positive development of the PV. It is observed that cost reduction depends not only on the scale-up benefits, but also on the cost of the encapsulation system with efficiency remaining limited below 15%. It is suggested that future growth will require constant support of all stakeholder to implement the envisaged change to a sustainable energy supply with photovoltaic playing a major role.
The rise of solar photovoltaic (PV) technology as a driver of rural electrification in the developing world and a contributor to climate change mitigation suggests that innovations enhancing PV efficiency and scalability could make considerable strides in reducing both poverty and greenhouse gas emissions. The nearly global access to the solar resource coupled to innovation-driven decreases in the costs of PV provides a path for a renewable energy source to accelerate sustainable development. Open-source software development has proven to produce reliable and innovative computer code at lower costs than proprietary software through sharing development responsibility with a large community of invested individuals. Concepts of open-source design have been applied to other fields in an attempt to reap the same benefits realized within software development; however, applying open-source strategies to solar PV research is uncommon. This paper reviews and examines how open-source design can be utilized to catalyze rapid innovation in the PV industry. The results show how successful open design and development methods can be created and utilized by identifying business models that provide PV researchers, turnkey suppliers and solar PV module manufacturers with the opportunity to utilize open-source design principles to accelerate innovation.
The aim of this paper is to advance research on sustainable innovation by adopting a business model perspective. Through a confrontation of the literature on both topics we find that research on sustainable innovation has tended to neglect the way in which firms need to combine a value proposition, the organization of the upstream and downstream value chain, and a financial model, in order to bring sustainability innovations to the market. Therefore, we review the current literature on business models in the contexts of technological, organizational, and social sustainability innovations. As the current literature does not offer a general conceptual definition of sustainable business models, we propose examples of normative 'boundary conditions' that business models should meet in order to support sustainable innovations. Finally, we sketch the outline of a research agenda by formulating a number of guiding questions.
A considerable body of literature deals with the creation of economic value while increasing corporate environmental and social performance. Some publications even focus on the business case for sustainability which aims at increasing corporate economic value through environmental or social measures. The existence of a business case for sustainability is, however, mostly seen as an ad hoc measure, a supplement to the core business, or simply a coincidence. As a contrast, this paper argues that business model innovations may be required to support a systematic, ongoing creation of business cases for sustainability. A framework for business model innovation is proposed as a means to strategically create business cases on a regular basis as an inherent, deeply integrated element of business activities.
In this article, the authors describe how they used a hybrid process of inductive and deductive thematic analysis to interpret raw data in a doctoral study on the role of performance feedback in the self-assessment of nursing practice. The methodological approach integrated data-driven codes with theory-driven ones based on the tenets of social phenomenology. The authors present a detailed exemplar of the staged process of data coding and identification of themes. This process demonstrates how analysis of the raw data from interview transcripts and organizational documents progressed toward the identification of overarching themes that captured the phenomenon of performance feedback as described by participants in the study.
Do firms committed to stewardship of the natural environment differ from less environmentally committed firms in their perceptions of the relative importance of different stakeholders in influencing their environmental practices? Using cluster analysis on six responses to questions describing a firm's practices, we classified 400 firms into four environmental profiles: reactive, defensive, accommodative, and proactive. Results indicate that firms with more proactive profiles do differ from less environmentally committed firms in their perceptions of the relative importance of different stakeholders.
Corporate Social Responsibility (CSR) has emerged as an important approach for addressing the social and environmental impact of company activities. Yet companies are increasingly expected to go beyond this. They are now often expected to assist in addressing many of the world's most pressing problems, including climate change and poverty. With increasing expectations placed on business, this article asks if CSR is capable of delivering on these larger issues based on evidence from the oil and gas sector. Looking at companies from developed countries, such as Exxon and Shell, as well as companies from emerging economies, such as Brazil's Petrobras and Hungary's MOL, the article investigates the potential of CSR for addressing three important challenges in the business-society relationship: the environment, development and governance.
A considerable body of literature deals with the creation of economic value while increasing corporate environmental and social performance. Some publications even focus on the business case for sustainability which aims at increasing corporate economic value through environmental or social measures. The existence of a business case for sustainability is, however, mostly seen as an ad hoc measure, a supplement to the core business, or simply a coincidence. As a contrast, this paper argues that business model innovations may be required to support a systematic, ongoing creation of business cases for sustainability. A framework for business model innovation is proposed as a means to strategically create business cases on a regular basis as an inherent, deeply integrated element of business activities.
This article examines the function of documents as a data source in qualitative research and discusses document analysis procedure in the context of actual research experiences. Targeted to research novices, the article takes a nuts-and-bolts approach to document analysis. It describes the nature and forms of documents, outlines the advantages and limitations of document analysis, and offers specific examples of the use of documents in the research process. The application of document analysis to a grounded theory study is illustrated.
We use content analysis to examine the content analysis literature in organization studies. Given the benefits of content analysis, it is no surprise that its use in organization studies has been growing in the course of the past 25 years (Erdener & Dunn, 1990; Jauch, Osborn, & Martin 1980). First, we review the principles and the advantages associated with the method. Then, we assess how the methodology has been applied in the literature in terms of research themes, data sources, and methodological refinements. Although content analysis has been applied to research topics across the subdomains of management research, research in strategy and managerial cognition have yielded particularly interesting results. We conclude with suggestions for enhancing the utility of content analytic methods in organization studies.
Solar energy systems (photovoltaics, solar thermal, solar power) provide significant environmental benefits in comparison to the conventional energy sources, thus contributing, to the sustainable development of human activities. Sometimes however, their wide scale deployment has to face potential negative environmental implications. These potential problems seem to be a strong barrier for a further dissemination of these systems in some consumers.To cope with these problems this paper presents an overview of an Environmental Impact Assessment. We assess the potential environmental intrusions in order to ameliorate them with new technological innovations and good practices in the future power systems. The analysis provides the potential burdens to the environment, which include—during the construction, the installation and the demolition phases, as well as especially in the case of the central solar technologies—noise and visual intrusion, greenhouse gas emissions, water and soil pollution, energy consumption, labour accidents, impact on archaeological sites or on sensitive ecosystems, negative and positive socio-economic effects.
In this review, the primary subject is the ‘business case’ for corporate social responsibility (CSR). The business case refers to the underlying arguments or rationales supporting or documenting why the business community should accept and advance the CSR ‘cause’. The business case is concerned with the primary question: What do the business community and organizations get out of CSR? That is, how do they benefit tangibly from engaging in CSR policies, activities and practices? The business case refers to the bottom-line financial and other reasons for businesses pursuing CSR strategies and policies. In developing this business case, the paper first provides some historical background and perspective. In addition, it provides a brief discussion of the evolving understandings of CSR and some of the long-established, traditional arguments that have been made both for and against the idea of business assuming any responsibility to society beyond profit-seeking and maximizing its own financial well-being. Finally, the paper addresses the business case in more detail. The goal is to describe and summarize what the business case means and to review some of the concepts, research and practice that have come to characterize this developing idea.
This paper introduces the special issue on Social Acceptance of Renewable Energy Innovation. It is a collection of best papers presented at an international research conference held in Tramelan (Switzerland) in February 2006. While there are ambitious government targets to increase the share of renewable energy in many countries, it is increasingly recognized that social acceptance may be a constraining factor in achieving this target. This is particularly apparent in the case of wind energy, which has become a subject of contested debates in several countries largely due to its visual impact on landscapes. This paper introduces three dimensions of social acceptance, namely socio-political, community and market acceptance. Factors influencing socio-political and community acceptance are increasingly recognized as being important for understanding the apparent contradictions between general public support for renewable energy innovation and the difficult realization of specific projects. The third dimen
The mainstream of the literature on corporate sustainability follows the win–win paradigm, according to which economic, environmental and social sustainability aspects can be achieved simultaneously; indeed, corporate sustainability has often been defined by the intersection of these three areas. However, given the multi-faceted and complex nature of sustainable development, we argue that trade-offs and conflicts in corporate sustainability are the rule rather than the exception. Turning a blind eye to trade-offs thus results in a limited perspective on corporate contributions to sustainable development. In order to overcome this situation, we propose an initial framework for the analysis of trade-offs in corporate sustainability. By doing so, we pursue two aims. First, the framework serves as a starting point for a more systematic analysis of trade-offs in corporate sustainability, as it identifies different levels and dimensions to characterize such trade-offs. Second, it serves to contextualize the contributions to this special issue on trade-offs in corporate sustainability. Based on the framework, we finally point to some promising avenues for future research on trade-offs in, and a more inclusive notion of, corporate sustainability. Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment.
Part I - Introduction.- The Emergence of Green Business Models.- Purpose of this Work and Research Approach.- Part II - Theoretical Foundation of Green Business Model Transformations.- Environmental Sustainability in Business.- The Business Model Concept as a Unit of Analysis for Management Science.- Towards a Taxonomy of Green Business Models.- Organisations, Change, and Innovation.- Part III - Towards a Practical Management Approach.- A Survey on Green Business Model Transformations.- Managerial Implications of Survey Results.- Managing Green Business Model Transformations - A Framework for Management Practice.- Part IV - Conclusion and Outlook.- Conclusion and Outlook.
A business case for sustainability intends and realizes economic success through (and not just with) an intelligent design of voluntary environmental and social management. A business case for sustainability is different from a conventional economic business case. It can be characterized by three requirements which have to be met. Firstly, the company has to realize a voluntary or mainly voluntary activity with the intention to contribute to the solution of societal or environmental problems. These are intended activities for the society or the natural environment which are not just a reaction to legal enforcement and regulations or which would anyhow be expected for economic reasons as part of conventional business behavior. Secondly, the activity must create a positive business effect or a positive contribution to the economic success of the company which can be measured or argued for in a convincing way. Such effects can for example include cost savings, the increase of sales or competitiveness, improved profitability, customer retention or reputation. The cause and effect relationship can be direct or indirect, however, must not be speculative but rather based on a sound management argumentation. Thirdly, a clear and convincing argumentation must exist that a certain management or entrepreneurial activity has led or will lead to both the intended societal or environmental effect and the economic effect. This argumentation includes an explanation of the link between the voluntary social or environmental activity and the economic and sustainability effect. A business case for sustainability is thus characterized by creating economic success through (and not just along with) a certain environmental or social activity. In summary: A business case for sustainability results from the intelligent design of voluntary or mainly voluntary social and environmental management and creates a positive business effect based on a distinct management or entrepreneurial activity. The concept of the business case for sustainability guides researchers and practitioners alike to find answers to the crucial question: How can the competitiveness and business success of a company be improved with voluntarily created outstanding environmental and social performance?
Although the term 'business model' is widely used in the business world, the academic research on this issue is sparse. This paper tries to close that gap by developing a typology of different business models along three dimensions: value chain constellation, market power of innovators versus owners of complementary assets and total revenue potential. This typology consists of four different types of business model (Integrated, Layer Player, Market Maker and Orchestrator) and is built on the resource based view as a conceptual foundation. Moreover, this paper discusses how business models may change over time, due to a varying competitive landscape.
The transformation of the energy industry towards a more sustainable production of electricity increases the importance of distributed generation from renewable sources such as solar photovoltaic (PV). German utilities have largely failed to benefit from this development and lost 97% of the distributed PV generation market to investors from outside the electric power industry. Recent studies indicate that utilities have to react to prevent revenue erosion and loss of profits. This study identifies threats and opportunities of distributed PV generation for utilities based on a series of interviews with German utility managers. The key finding is that utilities do not perceive distributed PV as a threat to their current business models nor do they see it as a potential market for them. Relating these findings to the existing literature on transformation processes in other industries leads to the conclusion that the solution for utilities lies in changing their perspective on distributed PV. Utilities could greatly benefit if they did not treat PV as just another source of electricity generation in competition with traditional sources (as they do today), but as a strategic gateway into the emerging distributed generation and service market. Distributed PV could function as a basis for further business model innovation in new growth markets such as energy efficiency and distributed storage. Specific recommendations are provided and a modular value proposition is suggested to help utilities to turn distributed PV from a threat into an attractive business opportunity.
In 2006, BP Solar announced the breakthrough of a new process for ingot growth that significantly increased cell performance over traditional multi-crystalline based silicon solar cells. This new technique, named Mono 2 ™, is a great advance in casting technology and builds on the pioneering work conducted by BP Solar scientists who first introduced multi-crystalline growth techniques more than 25 years ago. Mono 2TM enables the higher efficiencies of mono crystal based wafers while incorporating the benefits of cast technology such as high silicon yield, low light induced degradation (LID), low capital intensity, and scale. Product incorporating cells from this process were installed in a 0.5MW grid connected system in Chino, California, USA during 2007. Mono 2 ™ product was installed alongside standard multi-crystalline modules for the purpose of direct comparison. This paper reports on data such as LID, low light level responsiveness and outdoor performance at the module and the system level. Early results from these activities show that product made with the Mono 2 ™ wafer process affords significant improvements in energy generation (>6%) over traditional cast multi-crystalline silicon processes. Reduced defect densities and higher carrier life times contribute to these gains.
The buried contact solar cell has become one of the most successful commercial developments in photovoltaics in the past 10 years. Since the first commercial cells were manufactured in 1992 over 50 MWp of product has now been fabricated. With the building of a new production facility in Tres Cantos (Spain) the annual installed production capacity for this technology is currently 50 MWp on two sites. The background to the growth in this technology is presented together with recent developments and innovations that have been incorporated into the new Tres Cantos facility, including automation, manufacturing systems and effluent treatment. Future prospects for the technology are outlined.
This paper seeks to complement empirical studies that have been done in researching the business case for sustainable development. Drawing on the process approach within strategic management, the paper offers a way of viewing the role of sustainable development within corporate strategy that overcomes the shortcomings of the stakeholder-shareholder dichotomy. A qualitative research approach discerns different management strategies taken towards integrating sustainable development objectives into the business model at two multinational companies, BP and Shell. Although both companies are recognised for what is traditionally viewed as a responsible attitude to society and the environment, Shell integrates sustainable development thinking more deeply into its structures, systems and processes. By taking a predominantly risk view of sustainable development, BP avoids potential damage that may result from emphasising sustainable development thinking at the expense of business value. The future experience of the two companies will be beneficial to others in the industry, who may learn the appropriate level of embeddedness to attribute to sustainable development thinking in adding value. A deeper analysis of processes that are currently in place at each company fits with Simon Zadek's call for further research to establish a greater understanding of what corporate social responsibility management really means in practice.
The recent growth of photovoltaic (PV) electricity generation despite its high levelized costs is largely explained by strong national policy supports. Indeed, renewable energy sources are receiving increasing support worldwide from public authorities because of the environmental benefits they bring in comparison with conventional energy sources. Thus, many countries have set targets for PV deployment. The possibility to achieve them at a lower cost has now become a central issue, making it necessary to examine the efficiency of the instruments used to promote PV.After describing the mechanisms of the impact of demand and supply on the reduction cost of PV systems, the public support for PV is assessed for five representative countries (France, Germany, Japan, Spain and the US) from an extensive policy review. Based on their financial evaluations, the performances of these policies are compared from the different states of PV development in each country.The main conclusion is that it is necessary to have a well-planned policy, i.e., with a controlled level of expenditures and balanced allocation of these, in order to install the desired amount of PV, to control its impact on the electricity prices and to give a sufficient visibility to the industrialists.
Rural electrification (RE) has gained prominence over the past two decades as an effective means for improving living conditions. This growth has largely been driven by socio-economic and political imperatives to improve rural livelihood and by technological innovation. Based on a content analysis of 232 scholarly articles, the literature is categorized into four focal lenses: technology, institutional, viability and user-centric. We find that the first two dominate the RE debate. The viability lens has been used less frequently, whilst the user-centric lens began to engage scholars as late as 2007. We provide an overview of the technological, institutional and viability lenses, and elaborate upon the user-centric lens in greater detail. For energy policy and practice, we combine the four lenses to develop a business model framework that policy makers, practitioners and investors could use to assess RE projects or to design future rural electrification strategies.
The teaching case takes a look at the recent history of the oil major BP. It contains two storylines: Part A is about the Gulf of Mexico oil spill of 2010, its physical and financial consequences, and how it was perceived by the public, especially political representatives. The first section provides comprehensive information on the oil spill and the preceding explosion on the drilling rig Deepwater Horizon. This event in particular and BP’s safety performance in general were treated in numerous U.S. Congress hearings, to which also BP’s CEO Tony Hayward was summoned. Two sections on “The Hearing”, which are based on original protocols, illustrate Hayward’s inability (or unwillingness) to answer crucial questions on safety and risk management and decision making at BP. Additionally, Part B provides further background information on the company. Three sections present milestones between 2000 and 2009, with a focus on the “beyond petroleum” campaign. Readers learn of BP as a complex business group that tried to re-define itself after one century of corporate history. Former CEO Lord Browne gave BP the “beyond petroleum” identity and in his term BP Alternative Energy was founded. But he left the company because of a private scandal. Despite this re-branding and improved business performance, Tony Hayward, Lord Browne’s successor, was exposed to fierce critique and accused of greenwashing.Accepted for publication by the International Journal of Case Studies in Management. The final case version as well as teaching notes for lecturers will be available on the journal website.
This report summarizes work to better understand the structure of future photovoltaics business models and the research, development, and demonstration required to support their deployment.
The transformation of today's electric power sector to a more sustainable energy production based on renewable energies will change the structure of the industry. Consequently, utilities as the major stakeholders in this transformation will face new challenges in their way of doing business. They will have to adapt their business models to remain competitive in the new energy landscape. The present review of business model literature shows that two basic choices exist: utility-side business models and customer-side business models. The two approaches follow a very different logic of value creation. While the former is based on a small number of large projects, the latter is based on a large number of small projects. The article reveals that blueprints for utility-side business models are available, whereas customer-side business models are in an early stage of development. Applying the business model framework as an analytical tool, it is found that existing utility-side business models comprise a series of advantages for utilities in terms of revenue potential and risk avoidance. This study provides new insights about why utilities will favor utility-side business models over customer-side business models and why they also should engage in customer-side business models in their quest for more sustainable future business models.
The authors revisit Hart’s natural-resource-based view (NRBV) of the firm and summarize progress that has been made in testing elements of that theory and reevaluate the NRBV in light of a number of important developments that have emerged in recent years in both the resource-based view literature and in research on sustainable enterprise. First, the authors consider how the NRBV can both benefit from recent work in dynamic capabilities and can itself inform such work. Second, they review recent research in the areas of clean technology and business at the base of the pyramid and suggest how the NRBV can help inform research on the resources and capabilities needed to enter and succeed in these domains.
In diversifying energy supply, the transformation of the energy industry has been identified as a key challenge for a sustainable energy future. This suggests that incumbent firms in this industry have a vital role in the development and commercialization process of renewable energy technologies. This paper provides a comparative analysis of oil and gas firms’ strategies regarding solar PV technology investments, a renewable energy technology that has seen explosive growth of late. The main aim is to examine the strategic approach of incumbent firms in the oil and gas industry towards the development and commercialization of solar PV technology. To investigate this, a multiple case study has been conducted within the European oil industry, focusing on the three largest oil and gas firms: BP, Royal Dutch/Shell, and Total. Findings show that oil and gas firms have difficulties with integrating solar PV technology in their supply chain. The analysis suggests that it is uncertain whether all oil and gas firms will abandon solar completely, as this depends to what extent they are able to generate profits. Nevertheless, there is currently a trend in the oil industry of leaving solar and positioning towards a ‘recarbonization’ of business activities.
Drawing on a social constructionist perspective, the authors present insights into the business case for eco-effective greening of business, based on analysis of Royal Dutch Shell's 1997 establishment of Shell Renewables as its fifth core business. They apply organizational decision-making theory to suggest that Shell's new eco-effective renewable energy business came about in a process fitting the garbage-can decision-making model - a model more aptly named after a recycling bin, they also argue. In rationalizing the decision after it had been made, Shell leveraged its energy-industry networks to enact a market for its new eco- effective products and services. The article concludes with the authors' observations that eco- effective greening can be a business case-in-the-making, with the economic outcome of developing eco- effective products and services dependent on how new green markets are created and pursued.
For a long time, companies have been unaware of or unconcerned with their activities' consequences to the environment. In the 1990s, however, this narrow-minded attitude seemed to begin changing, as some signs increasingly appeared: overcompliance with regulation standards, voluntary environmental expenditures and agreements with regulators, the appearance of 'green' products, corporate statements on the environment and implementation of environmental management systems, among others. If companies are now taking the environment into account, they probably have an economic pull for doing so. The interaction process with regulators, stakeholders' pressure, corporate reputation enhancement, creation and taking advantage of competitive opportunities, and the view of corporate environmentalism as a strategic issue are the reasons examined here in order to evaluate the potential benefits for environmental integration in companies' management orientation. This article tries to present corporate environmental strategic management as an essential management function because of its ability to minimise costs and risks and enhance (or ensure) companies' value.
This study investigates the corporate decision to voluntarily purchase premium-priced Green Electricity (GE) by examining the internal and external factors which influence environmental decision making. In-depth interviews were conducted with eight paired firms in Alberta, Canada. Firms purchasing GE typically employed a top-down decision-making process, while firms characterised by a participative process did not. An internal driver (environmental champion) was more significant than external factors (regulations, stakeholder pressure) at influencing firms to voluntarily adopt GE purchasing, while organisational culture was found to moderate the effect of drivers. Cost is a common inhibitor to green purchase decisions, but customer (oil industry) perceptions and government regulations were also identified in some cases
Utility-scale solar projects have grown rapidly in number and size over the last few years, driven in part by strong renewable portfolio standards (RPS) and federal incentives designed to stimulate investment in renewable energy technologies. This report provides an overview of such policies, as well as the project financial structures they enable, based on industry literature, publicly available data, and questionnaires conducted by the National Renewable Energy Laboratory (NREL).
Discusses the idea that continuing business model innovation provides a parallel way to outperform the competition. Improving a company’s business model by redirecting its focus will mean that competitors will be left out of position and unable to respond effectively.
Elementary village electrification Holistic community development (HCD) WLED light Indoor air pollution Renewable energy Human development index (HDI) Solar PV Sustainable Appropriate a b s t r a c t More than 100 years after Edison's life changing discovery, 1.6–2 billion people around the globe still live without light, in dark and smoke filled homes. The remote and impoverished Himalayan villages of upper Humla, in north-west Nepal, belong to some of the 2.4 billion people who still depend on the use of traditional biomass for their daily energy services such as cooking, heating and light. These activities on open fireplaces have a direct chronic impact on the health and extremely low life expectancy of the women and children along with devastating deforestation. There is a strong relationship between prosperity and access to electricity. The more remote and isolated communities in Nepal generally live in great poverty. Eighty percent of Nepal's 28.5 million people live in rural areas, with around half of these so remote, that neither a road, nor the national grid is ever likely to reach them. While Nepal has no fossil fuel resources, it is a country that is rich in renewable energy resources such as hydropower and solar energy. These abundant and locally available renewable energy resources can be tapped into with appropriate locally developed technologies. Generating and storing electrical energy derived from these rich local energy resources can provide for appropriate and sustainable lighting, which brings potential health, education, social and economic benefits to the people who have pre-viously lived in homes with excessive indoor air pollution. This paper describes the living conditions of some villages in upper Humla, and the possible benefits of a simple village electrification system that provides basic lighting for the homes and the consequent improvements in the living conditions of the villagers.
As building-integrated photovoltaic (PV) solutions can meet around one-third of electricity demand in Germany and China, both countries are interested in exploring this potential. PV technologies have demonstrated significant price reductions, but large-scale global application of PV requires further technology improvements and cost reductions along the value chain. We analyze policies in Germany and China, including deployment support, investment support for manufacturing plants and R&D support measures, and we survey the industrial actors they can encourage to pursue innovation. While deployment support has been successful, investment support for manufacturing in these nations has not been sufficiently tied to innovation incentives, and R&D support has been comparatively weak. The paper concludes with a discussion of the opportunities for global policy coordination.
What kinds of PV project configurations do lenders prefer to finance? Recent developments in the field of renewable energy project finance have reinforced the need for investigation, as fundraising has become more challenging and project evaluation stricter. To contribute to the limited research in this field, we focus on photovoltaic projects and report from an Adaptive Choice-Based Conjoint experiment with German experts in project finance. We find a bias which we call “debt for brands”. Simulations reveal that debt investors prefer projects with premium brand technology (modules, inverters) to low-cost technology. Although we assumed that debt investors prefer projects with the highest Debt Service Cover Ratio (DSCR), they favour projects with lower DSCR, as long as those projects include premium brand technology. We find that, if premium brands were engaged, debt investors would also choose projects with higher risk. Our findings have implications for renewable energy project finance in practice and research.