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Cost of new technology is biggest challenge to greening prod

Cost of new technology is biggest challenge to greening prod

Green products hold great competitive promise, but companies need to be smart when pursuing costly development strategies, says a recent report by the Aberdeen Group.

What makes the difference between successes and missteps isn't strategy itself, but experience, the Aberdeen Group said its research found.

"The lead time in a strategy merely offers a manufacturer the opportunity to figure what does and does not work well earlier than their peers," said Chad Jackson, Aberdeen vice president for Product Innovation & Engineering Research, in a statement.

"Determining the best practices and methods for a design for green strategy can be seen as a very tangible manifestation of the lead time." said Jackson, who co-authored the report. "The marked difference between the Best-in-Class and Laggards comes in the tactical execution of the strategies, where longer pursued strategies have translated into lessons learned."

To conduct its study, "Greening Today's Products," Aberdeen surveyed 360 firms between July and August 2008 and supplemented its online survey with interviews. Aberdeen grouped its respondents into three categories according to their performance: "Best in Class" represented the top 20 percent; "Industry Average" was the middle band and accounted for about 50 percent; and "Laggard" was the 30 percent in the bottom tier.

The study looked at the top five drivers and challenges affecting green product development and steps for each of the three groups to take if they wish to improve.

The top five drivers are corporate social responsibility, the prospect of greater competitive product differentiation, customers' demand for more eco-friendly products, compliance with green-related regulations required for market entry, and customers' demand that products used natural resources more efficiently, the report said.

According to the report, the top five challenges are the high cost of developing new technologies, differing regulations around the world, difficulty measuring the ROI on green products, problems understanding the application of regulations, and the new, large capital manufacturing investments required to handle greener materials and greener investments.

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