Interface’s ESA Case Study
EMS 503
Prasad Naik
Background
Interface Flooring Systems, Inc. was founded by Ray Anderson in 1973 as a joint venture between Carpets International Plc., a British company, and a group of American investors. He set up operations in LaGrange, Georgia, and embarked on a mission to adapt European technology to produce America’s first free-lay carpet tiles. In early 1990,Interface goes green and step up goal to reduce their negative impact on Environment. During 1995 executives of Interface to take step ahead and introduced The “Evergreen Services Agreement”(ESA). It provided for the following: (1) carpet and installation; (2) carpet maintenance; (3) selective replacement of tiles; and (4) carpet removal at
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Also they saved around 10 millions dollar in waste elimination activities. They also reduce their dependence on Non renewable energy and shit to using renewable sources like wind and solar. These results and Interface’s commitment to the environment brought much press coverage to the company in the mid to late 1990s. In 1999, Fortune developed a six-page spread on Anderson in which he was dubbed both “The Green CEO” and “The king of carpet tile.”
Evergreen Services Agreement (ESA)
ESA was intended to “close the loop,” thereby keeping used carpet materials away from landfills. The financial benefits of service provision were high margins, stable revenue streams, and long-term customer relationships. Additionally Interface believed it could create a sustainable cost advantage with ESA, given the practice of selective replacement. Because 20% of the carpet received 80% of the wear replacing only the worn tiles would reduce carpet consumption by 80%,a fivefold savings in material costs over the life of the lease.
Challenges
The major challenge was to educate the customer about the service, as it was new concept. The second challenge was that all the negations failed at purchase level and customer end up buying the product than leasing it. Customer also found it difficult to transfer funds from capital to operating expenses. .” And some customers objected to the lease’s lack of flexibility; these customers did not want to be locked into a long-term
Customers want the business to produce quality products at reasonable price. You have different types of customers. There are different types of customers there are loyal ones, young ones, elderly, family or one-time customers.
One needs to put themselves in the shoes of the service user and their carers when you think about the building / environment.
According to a “go green” blog named 2B Green World Website-LEED Consultants, “buildings represent over 50% of US wealth; $800 billion is the amount of renovation and new construction in the United States, buildings account for 1/6 of the worlds freshwater withdrawals, ¼ of its wood harvest and 2/5 of its material and energy flow” (Go Green Facts 1).These figures represent the disadvantages of a world without green building. Throughout this report the focus is on LEED certification and accreditation, and the impact LEED has on several different service firms. The report begins with background information about the U.S. Green Building Council (USGBC), LEED, and LEED
Many firms are learning that being environmentally friendly and sustainable has numerous benefits. (O.C Ferrell, Fraedrich, Ferrell, 2015). This could enable them to increase goodwill from various stakeholders and also save money in the long term. This will mean that they are being more efficient and less wasteful of resources, which will enable them to be more competitive by satisfying stakeholders. The CEO of
-Lack of evaluation and no review process of service provision. A review process should be put in place and all partners must complete this and evaluations
While our model of leaving as much individuality of our acquisitions in place as possible; allowing previous business arrangements, staffing levels and management to continue has been effective in building our reputation, efficiency has suffered. By not standardizing things such as automobile fleet usage and sharing facilities, we are incurring more administrative expense than is really necessary. By not centralizing purchasing across the board the company is not taking full advantage of economies of scale. As growth continues the administration of costs and the different contracts will become nightmarish. Expenses as % of total revenue are beginning to move up and currently stand at their highest level (18%). A move away from this model, especially after the image issues I mentioned earlier, may further damage our reputation as being the “preferred acquirer.” To further complicate such a move is our acquisition of numerous rural homes which will present a problem to the logistics of integrating services, etc. efficiently.
The company has improved since last year by three places on the list having scored strongly on sustainable operations and energy criteria. The company also placed 5th on Interbrand’s 2012 Best Global Green Brands list, 22nd on NewsWeek’s 2012 environmental ranking of the 500 largest publicly traded companies in the world and 3rd amongst companies in the technology equipment industry (Please refer to Appendix 2 and 3) thus clearly signifying its solid environmental standpoint.
Over Tennant Company’s (Tennant) 141 year history, they have consistently remained a producer of floor-cleaning equipment and technologies focusing their efforts in producing products for non-residential use. Since the new CEO Chris Killingstad has come to the company however, he has been dramatically changing Tennant’s value proposition with a broader emphasis encompassing “chemical-free cleaning and other technologies.” This case shows Tennant’s move beyond traditional green efforts to centralizing environmentally-friendly performance at the heart of the company’s focus, and whether this new focus provides enough benefit as a competitive advantage.
Lowe’s Home Improvement Stores have one mission, to “provide customer-valued solutions with the best prices, products and services to make Lowe 's the first choice for home improvement.” Even though the company is no longer a small-town company, it continues to focus on “exception customer service” and enhances its customer’s lives. In an effort to provide for its customers, the company also seeks to significantly provide for its employees by treating them with respect and providing them with good benefits and
Recently I have noticed more consumer complaints from poor service, more specially, service mistakes and customer mistreatment. When a mistake occurs, we do not handle customers in a courteous manner. In addition, we play favorites with customers and some of them are not getting the attention they require. To
S.C Johnson & Son Inc. has a business-level strategy that focusses on environmental protection. According to Green Choices SC Johnson 2013 Public Sustainability Report the company is focusing on minimization of landfill waste, reducing greenhouse gas emission and improving on product chemistry. The company also wants to continue on improving product packaging to ensure that they are attractive to consumers and that they are environmentally friendly. SC Johnson launched two wind turbines in its largest manufacturing facility, these together with the existing cogeneration units enables the facility to generate 100 percent of its power need onsite (SC Johnson, 2010). With generation of power through renewable sources the company experiences low power costs resulting in cost savings. The company launched a five year strategy which aims at ensuring less waste, creating winning products and reducing environmental footprints. SC Johnson is
Companies that have gone green have gained profits. Recycling has become a multimillion dollar industry in a lot of countries. When looking at America’s statistics in recycling it shows
Dominite customer relations and sales for the long term can be improved not only by product services, technical assistance
The issues encountered can occur on both the company and customer side, among them are the
with the service seems to be insufficient for customers to remain loyal. Creating customer loyalty is