Wednesday, July 22, 2009

Samsung Makes $4 Billion Investment To Become Green Leader

Samsung will invest over $4 billion to develop energy efficient products and reduce its carbon emissions 50% by 2013. Under its Eco-Management 2013 plan, it will spend $2.5 billion to improve the energy efficiency of its products, including TVs, refrigerators and air conditioning units. The remaining $1.8 billion will be invested in reducing carbon emissions from the company’s manufacturing plants.

The question is what is Samung's motivation? Samsung’s move may reduce manufacturing costs. Taking a lesson from the retail industry, perhaps Samsung’s motivation should be to enhance its marketing and public relations image. According to a Retail Systems Research and Retail Industry Leaders Association survey, retailers with above average growth emphasize the brand image aspect of green practices more than the cost saving aspect. Besides focusing on the energy efficiency of the stores, survey participants spend considerable time and effort on efficiency in information technology, and optimization of operations and supply chains.

Samsung’s announcement does not state whether the emphasis is on cost savings or brand image. However, the company wants to make the most energy efficient products in its product lines.

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