Competing with the commons - an impossible endeavor?
Mats I Williander1 and Mikael Román2, (1)Chalmers University of Technology, Sweden; (2)Massachusetts Institute of Technology, USA
Lately, increasing empirical data has come to question the notion of ‘green consumers’. Fundamentally, these studies indicate a mismatch between people’s stated intentions to buy ‘green products’ and their actual purchase. Instead, price still stands out as the principal factor guiding choice of product. This, in turn, raises questions about the competitiveness and attractiveness eco-benign offers. Why are some of them successful? Why do others fail?

The low consumer interest in eco-benign products is particularly evident in the automotive industry. More importantly, consumer resistance towards eco-benign cars is not caused primarily by ignorance, or unawareness about the environment. Rather, it is a function of perceived uncompetitive value propositions of the product itself. Consumers simply regard eco-benign alternatives as inferior to ‘dominant technologies’.

This study compares two different companies’ launch and sales of eco-benign alternative fuelled cars in three countries. Still early in the process, none of them have managed to turn eco-benignity into a competitive advantage. The cases reveal, not surprisingly, that governments have a fundamental role in the creation of eco-benign markets. It is the way in which government participates that decides the market’s possibility of survival. Of particular relevance here is the notion of common goods and its influence on competitive rationality. Our study shows that governmental efforts regularly mitigate the effects of the overuse of common goods, mainly through the use of regulations and emissions taxes. However, the cause for using common goods is rarely addressed. This, clearly, deserves more attention also from a competitive standpoint. Our study tries to remedy this situation by combining research on competitive rationality with theories on public policy and greening of industry. Finally, we discuss how environmental issues could become a competitive advantage through the use of regulations.

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