Harvard Case - Environmental Platform LEEDership at USGBC
"Environmental Platform LEEDership at USGBC" Harvard business case study is written by Michael W. Toffel, Timothy S. Simcoe, Aldo Sesia. It deals with the challenges in the field of Strategy. The case study is 28 page(s) long and it was first published on : May 25, 2018
At Fern Fort University, we recommend that USGBC (US Green Building Council) adopts a multi-pronged strategy to solidify its leadership in the environmental platform space. This strategy should focus on expanding its reach, strengthening its brand, and driving innovation within the building industry.
2. Background
The case study focuses on the USGBC, a non-profit organization dedicated to promoting sustainable building practices through its LEED (Leadership in Energy and Environmental Design) certification program. The organization faces challenges in maintaining its leadership position as competitors emerge and the demand for green building solutions grows globally.
The main protagonists are:
- Rick Fedrizzi: CEO of USGBC, who needs to navigate the organization through a period of rapid change and competition.
- The USGBC Board of Directors: Responsible for setting the strategic direction of the organization and overseeing its financial performance.
- The LEED program: The core product of USGBC, which faces challenges from competing green building rating systems and evolving market demands.
3. Analysis of the Case Study
To analyze the case, we can utilize several frameworks:
a) Porter's Five Forces:
- Threat of New Entrants: High, as the green building market is attractive and barriers to entry are relatively low.
- Bargaining Power of Buyers: Moderate, as buyers (building owners and developers) have multiple options for green building certifications.
- Bargaining Power of Suppliers: Low, as USGBC relies on a diverse network of suppliers for its services.
- Threat of Substitute Products: High, as other green building rating systems and sustainability standards are available.
- Competitive Rivalry: High, as USGBC faces competition from organizations like BREEAM, WELL Building Standard, and others.
b) SWOT Analysis:
Strengths:
- Strong brand recognition: LEED is a well-established and respected certification program.
- Large network of stakeholders: USGBC has a vast network of members, partners, and industry professionals.
- Focus on innovation: USGBC actively develops new standards and tools to address emerging sustainability challenges.
Weaknesses:
- Limited international reach: LEED's presence in emerging markets is relatively weak.
- High reliance on certification fees: USGBC's revenue stream is heavily dependent on the LEED program.
- Potential for stagnation: The organization faces challenges in adapting to rapid changes in the green building landscape.
Opportunities:
- Growing demand for green buildings: The global market for sustainable building solutions is expanding rapidly.
- Emerging technologies: Advancements in technology offer new opportunities for USGBC to innovate and enhance its programs.
- Expansion into new markets: USGBC can leverage its expertise to expand its reach in emerging markets.
Threats:
- Competition from other green building certification programs: The market is becoming increasingly competitive.
- Economic downturn: A decline in construction activity could negatively impact USGBC's revenue.
- Changing regulatory landscape: Shifts in government policies and regulations could impact the demand for LEED certification.
c) Value Chain Analysis:
USGBC's value chain can be analyzed through the following activities:
- Inbound logistics: Developing and maintaining relationships with stakeholders, including members, partners, and industry experts.
- Operations: Managing the LEED certification process, developing new standards and tools, and providing education and training.
- Outbound logistics: Promoting the LEED program, providing support to certified projects, and engaging with the media.
- Marketing and sales: Building awareness of the LEED program, attracting new members and partners, and promoting its benefits.
- Service: Providing ongoing support to certified projects, offering technical assistance, and fostering a community of green building professionals.
d) Business Model Innovation:
USGBC can consider several business model innovations to enhance its competitive advantage:
- Developing a tiered pricing model: Offering different levels of certification based on project scope and sustainability goals.
- Expanding into new service offerings: Providing consulting services, green building design support, and sustainability assessments.
- Leveraging technology: Developing online platforms for project management, data analysis, and communication.
- Building strategic alliances: Partnering with other organizations to expand its reach and offer complementary services.
4. Recommendations
USGBC should adopt a multi-pronged strategy to solidify its leadership in the environmental platform space. This strategy should focus on three key areas:
a) Expanding Reach:
- Global Expansion: Invest in strategic partnerships and collaborations to expand LEED's presence in emerging markets. This could involve adapting the program to local contexts and building relationships with key stakeholders.
- Diversification of Services: Develop new service offerings beyond certification, such as consulting, training, and research. This will broaden USGBC's revenue streams and appeal to a wider range of stakeholders.
- Technology Adoption: Leverage technology to enhance the efficiency and accessibility of the LEED program. This could include online platforms for project management, data analysis, and communication.
b) Strengthening Brand:
- Brand Management: Develop a consistent brand message and visual identity to enhance brand recognition and differentiation. This could involve creating a stronger brand narrative and engaging in targeted marketing campaigns.
- Public Relations: Increase public awareness of USGBC's mission and impact through strategic media engagement and public outreach. This could involve highlighting successful LEED projects and showcasing the benefits of sustainable building practices.
- Community Engagement: Foster a strong community of green building professionals through networking events, online forums, and knowledge sharing initiatives. This will strengthen USGBC's reputation and attract new members.
c) Driving Innovation:
- Research and Development: Invest in research and development to identify emerging sustainability challenges and develop innovative solutions. This could involve exploring new technologies, materials, and design principles.
- Partnerships with Universities and Research Institutions: Collaborate with universities and research institutions to develop cutting-edge green building technologies and solutions. This will position USGBC as a leader in the field and attract talent.
- Incubating Startups: Create an incubator program to support startups developing innovative green building technologies and solutions. This will foster a culture of innovation within the organization and attract promising entrepreneurs.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core competencies and consistency with mission: The recommendations align with USGBC's core competencies in promoting sustainable building practices and its mission to advance the green building movement.
- External customers and internal clients: The recommendations address the needs of USGBC's external customers (building owners, developers, and investors) and internal clients (members, partners, and staff).
- Competitors: The recommendations aim to differentiate USGBC from its competitors by expanding its reach, strengthening its brand, and driving innovation.
- Attractiveness: The recommendations are expected to enhance USGBC's financial performance by increasing revenue streams and attracting new members.
6. Conclusion
USGBC faces a critical juncture in its journey. By adopting a multi-pronged strategy focused on expanding its reach, strengthening its brand, and driving innovation, the organization can solidify its leadership in the environmental platform space. This will require a commitment to strategic planning, resource allocation, and collaborative efforts across stakeholders.
7. Discussion
Other alternatives not selected include:
- Merging with a competitor: This could provide access to new markets and resources but could also dilute USGBC's brand and mission.
- Focusing solely on the US market: This would limit USGBC's growth potential and miss out on opportunities in emerging markets.
- Adopting a cost leadership strategy: This could make USGBC more competitive but could also compromise its commitment to quality and innovation.
Key assumptions of the recommendations include:
- The demand for green building solutions will continue to grow.
- USGBC can successfully adapt its programs to different market contexts.
- The organization can attract and retain talented professionals.
8. Next Steps
To implement these recommendations, USGBC should:
- Develop a comprehensive strategic plan: This should outline the organization's vision, goals, and strategies for the next 5-10 years.
- Allocate resources: USGBC should prioritize investments in key areas, such as global expansion, technology adoption, and research and development.
- Build a strong team: The organization needs to recruit and retain talented professionals with expertise in green building, international business, and technology.
- Monitor progress and adapt: USGBC should regularly assess the effectiveness of its strategies and make adjustments as needed.
By taking these steps, USGBC can solidify its leadership in the environmental platform space and continue to advance the green building movement globally.
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Case Description
By 2018, it was clear that U.S. Green Building Council (USGBC) had significantly contributed to the growth of green building, and over its 25-year history had become a powerful brand in the construction sector with its Leadership in Energy and Environmental Design (LEED) standard. Nonetheless, USGBC faced two significant challenges moving forward: maintaining LEED's leadership position as the green building standard in the U.S., and increasing the proportion of building stock that met the LEED standard. The case provides background on the USGBC and the evolution of its LEED standard, including how the standards are set, and green building benefits and costs.
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