Business Case Study
Although it is still unclear if the main cause of the increase in the global temperature in the rise in the levels of carbon dioxide in the atmosphere, but most researchers believes it is the main cause of global warming. As this issue grabbed attention of the world population and the governments, some not-for-profit and some for-profit companies emerged with the objective of reducing the carbon emission in the environment and to restore damaged habitat around the world. Planktos is one of the companies which are focusing on environmental restoration through restoring the ocean’s plankton population to normal levels.
Planktons are known to soak up atmospheric carbon dioxide through which the company earns credits in the global carbon market. Root Causes – Environmental Analysis External Threats and Opportunities The biggest threat that the company is facing is the competition from several up and coming companies which are looking in on making money using the same strategy which was innovated by Planktos Inc. A forthcoming company GreenSea Venture has patented method to control the fertilization of iron which may stand out as a better process than that of Planktos.
World Wildlife Fund (WWF) criticized the plans of Planktos to dump iron in the ocean near the Galapagos which was the first demonstration project of Planktos. The basis of the criticism of the project by the WWF was the concern of scientists about the negative effects that dumping iron will have on the balance of abundant life forms around the islands. It is possible that Planktos will face several such issues in other parts of the world on their quest to reduce the amount of carbon dioxide as the environmental concerns are rising.
There is a possibility of certain problems being caused by large scale ocean fertilization. Depletion of oxygen, overproduction of nitrogen and the production of carbonic acid are some of the major side effects of iron being dumped into the ocean. These are some of the threats that are caused by the external environment to the company Plankton. Professor Gary Rochelle of the University of Texas estimates that by 2030, approximately two-thirds of the carbon dioxide emissions will be produced by coal powered power plants.
These companies which produce a lot of carbon emissions face immense opposition by environmental groups and are also subject to the agreement of the Kyoto Protocol which enforces the countries to bring down their level of emission of carbon dioxide. Therefore these companies offer an opportunity to Planktos to serve them. Although United States has been slow to catch up on the carbon trading market, some states such as California are trying to establish necessary certifications so that the companies may trade carbon credits in the future. This is also an opportunity for Planktos to expand in the US markets and generates revenues.
Another prospect for Planktos is the voluntary organizations and individuals who are getting more and more aware about the environmental degradation because of carbon emissions and they are willing to pay more and more money for the carbon levels to be controlled. Segmentation Strategy The market can be divided into two segments; one which is the voluntary market motivated by individual or organizational interest in going green and other one is the regulated market motivated by the policies of the government and environmental organizations.
Among the market which is motivated by the policies to reduce the level of carbon dioxide, the major segment is the electricity producing coal power plant and the countries which are seeking to reduce their aggregated emissions. These countries are mainly the participant of the Kyoto Protocol, members of EU ETS, NWS and CCX. Due to the agreement that these countries signed voluntarily, they have to work under a set amount of carbon dioxide which they can emit. This agreement allows companies in those countries to produce a set amount of carbon dioxide designated as credits. Internal Strengths and Weaknesses
Planktos has currently advantage over the other companies in this business as it was the first with the idea. It also has a first mover advantage as it has been in the plankton restoration business before these two companies. At the same time, GreenSea Ventures, another company in the business, has a more efficient patented method for iron fertilization in the ocean than that of Planktos. This is an internal weakness for the company Planktos that it was unable to secure its idea through patents and therefore other companies were able to enter the business with better and more efficient methods for plankton restoration.
An ability of Planktos Inc. of giving logical reasons to the environmental organizations and its ability to defend its process of ocean fertilization has enabled it to expand its market and increase its revenue. This is an inner strength of the organization which has allowed it to go deeper into the market with its new projects and ventures. Through the case it is also evident that the company executives have done a lot of research on their part and the company is really concerned about the environment rather than just making profits.
The company’s distinctive competency lies in the experience it has gained before the other competitors entered the industry. The company has become now a benchmark in the industry as the projects and ventures it has instantiated have a lot of media coverage. Competitive Analysis Planktos is facing competition from several up and coming companies looking to cash it on plankton restoration. Climos and GreenSea Ventures are the two companies in particular. Climos is younger than Planktos and has yet to get a place in the market which is still dominated by Planktos in the plankton restoration business.
Planktos currently has an advantage over the two companies in experience, but GreenSea Ventures has a patented method to control the iron fertilization which may prove to be more efficient than that of Planktos. Company Mission/Goals Planktos Inc is a for-profit company whose main intention is to repair damaged habitat around the globe. The mission of the company Planktos is to stimulate the growth of carbon dioxide reducing phytoplankton in the world’s oceans so as to reduce the amount of carbon dioxide in the atmosphere.
The goal of the company is to also establish a business out or reducing the amount of carbon dioxide in the atmosphere. Planktos wishes to establish a marketing strategy which will allow them to continue to grow and expand in the global market. Current Company Strategy The company currently seeks to restore the ocean’s plankton population to normal levels since its main focus is environmental restoration. Planktos earns credits by reducing carbon dioxide from the atmosphere and then it sells these credits to other companies in the global carbon market.
Currently the company mainly serves the voluntary markets composed of environmentally aware individuals and companies. These individuals and companies understand the concerns associated with the increase of carbon dioxide in the environment. This strategy is however not so profitable because only those companies are being targeted which have a desire to reduce the carbon dioxide; other companies such as power plant which use coal as raw material are not targeted. This strategy is safe and there is an easy profit for the company, but if efforts are made, the company can expand more.
Alternatives One alternative strategy could be to target the electricity-producing coal plants which often use up the amount of credits which have been allocated to them. These plants are forced by the government to limit their carbon emission to a certain level. In case these companies are not able to keep their allowed emission level, they can purchase carbon credit to offset their individual carbon traces. This is an opportunity for the companies like Planktos to expand their customer base through targeting these companies to sell carbon credit.
These companies have a pure need of what Planktos is offering; therefore the company can be sure to make hefty profits on sales to these power plants. The benefits of this strategy are that the market share, revenues and as a result the bottom-line profits will rise for the company. However the company cannot completely rely on the strategy as coal-powered power stations are facing a lot of setback from the public because of their enmity towards the environment. Therefore the company cannot completely rely on this market niche as they may be closed down because of public pressure.
The other strategy could be to market the company in such a way that it attracts the public, companies and governmental attention of the countries across the globe. There should be campaigns which attract donations from across the globe to the company and hence the company will be able to expand on its activities and reach its goals. The good thing about this strategy is that large organizations will invest in the company to do their social marketing and huge donations from the governments can be attracted to the company which can also easily expand the business of the company.
The critical success factors for both these strategies include the validity of the process of ocean fertilization by sprinkling of iron particles. If however it is proved to be unhealthy for the environment by the scientists, the company can lose out its customers. Recommendations The marketing mix for the Planktos product promotion should include individual communication and creation of a corporate identity through creating strategic partnerships with well reputed firms.
An appropriate distribution channel should be chosen for the product and in large companies there should be direct sales through giving personal presentations and creating personal relations with the executives in the corporate world. With the entrance of more and more competitors in the industry, the company should practice price penetration to make barrier of entry for new entrants in to the industry. The problems in the implementation of strategies are likely to be inaccessibility of the governmental firms and large multinational companies which operate in more than one country.
The company also needs to make its process of ocean fertilization more efficient and environmental friendly. To achieve this, investment in research and development is needed. This is an important step because other competitors are coming up with better technologies and process such as GreenSea Ventures has developed a patented method to control the fertilization of iron which is more efficient than of Planktos. This is the right time to invest into research and development or engineering to create a better process and get it patented so that the new entrants are faced with many barriers of entry.
Ethical Implications and Contingency Plans There are no unethical activities in the decisions that are mentioned in the paper except that the company is making profits for the activities that should be done by a non-profit organization. In case of shutting down of the coal-powered electricity plants in the major parts of USA, the company can penetrate the other segments which include the governmental organizations and the private business which are seeking carbon credit as they reach their allocated ones. References Book Kotler, Philip, Keller, Lane. (2005). Marketing Management. 11th Edition. Prentice Hall.