P&G, the worlds largest consumer products company, proves to us that even the most efficient and profitable businesses can continue cutting costs on their production. The company has recently pledged to improve its energy efficiency by reducing waste build-up. P&G plans to accomplish this goal by using only renewable energy to fuel its factories as well as renewable inputs to construct and ship its products. Bob McDonald, CEO of the company, is motivated by social recognition and “do[ing] the right thing;” however, there are other benefits as well.
By converting 100% of its inputs into renewable resources, P&G will cut its production costs enormously. Money that would go towards purchasing non-renewable materials could be tacked onto the company’s net revenue and either saved or put towards another function of the business, like advertising. Although it is a lofty goal, this 100% reduction of waste could help solidify P&G’s top spot in the industry for many years to come.
http://online.wsj.com/article/SB10001424052748704654004575518122291029064.html
This is a great thing for P&G. Not only will their profits increase, but they will also increase their consumer type. Many people who care a lot about the environment would be more inclined to spend more money if they think their purchase his helping the environment. So, by making their company more "eco-friendly," P&G will be able to reach a larger variety of consumers.
ReplyDelete