Competing on Green Accelerates Pace of Change

In today’s hypercompetitive markets, companies in categories such as computers and retail struggle to establish and maintain a competitive advantage.  Given that consumer expectations are evolving, many of these companies are turning to green to differentiate their offerings by being greener than their competitors.  As the basis of competition shifts to the green space, companies seem to be continually upping the ante by trying to outdo each other for being the greenest company in the category.

Interestingly, green competitiveness is having an unintended consequence: green competitive pressure is accelerating the rate of change within these categories.  Industry leaders such as Wal-Mart and Tesco, and Dell and HP – already engaged in intense battles for consumer hearts, minds and share of wallet – are playing tit for tat when it comes to green.

Today, for example, Dell announced that that it plans to become the “greenest technology company on Earth”.   CEO Michael Dell went further stating that Dell would “take the lead in setting an environmental standard for [the] industry…and intend[ed] to maintain that leadership”.

Through such an announcement, Dell is demonstrating more than just responsible corporate citizenship.  With HP recently regaining it leadership position in a market where PCs are increasingly viewed as a commodity, Dell is trying to shift a basis of competition to green.  As this message will likely resonate with its core consumer, HP – already no slouch on green issues (it once invited Greenpeace to its annual shareholders meeting) – will have little choice but to follow suite.  While it is unclear whether it will match Dell’s challenge head-on, HP is certain to raise its commitment to green through announcements during the coming weeks.

The lesson for marketers is clear: as the basis for competition shifts to green, it is likely that companies will vie for leadership on the issue, accelerating change in the category.  Savvy green marketers will either take advantage of being a first mover on green or ready their company to be a fast follower when a competitor inevitably does.

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