Essay Sample on Total Value and Sustainable Products

Introduction

A value proportion refers to the reasons why customers in the market should purchase the commodities being sold by a given entity and not the rival businesses in the market. A significant number of firms are usually focused on offering products that are socially and environmentally friendly to ensure that they meet the needs of the consumers in the market. However, there exist others that only work towards offering commodities to their consumers without considering the fact that they need to ensure that they are sustainable and they are managing the environment in the right way. One of the organizations in the world that are failing to observe the sustainability measures is the Saudi Aramco which is a gas company that is based in Dhahran. It is often argued that this organization together with other seven oil companies are behind the pollution that is equivalent to what is produced in the United States (Shankleman, 2017). This is based on the information detailed in an article titled Study: Eight oil companies produce as much pollution as the entire U.S.

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It has been noted that Saudi Aramco is one of the organizations based in Saudi that are not following measures and strategies that are supposed to ensure that their activities are environmentally friendly and they do not cause any harm to the living things. However, if the business decides to make changes on the way it operates for it to become socially, economically, and environmentally conscious, it stands to gain through the adoption of a value proposition that will make it attractive to the potential customers in the market ahead of the competitors (Mcelroy, McElroy & Cheshire, 2016). Some of the propositions that are likely to arise from the sustainability perspective is the non-use values and use values. In this case, the non-use value is the benefits that are usually assigned to a given commodity by the customers in the market even though they do not use the product. Saudi Aramco is involved in the production of gas and oil products, and it is mainly accused of polluting the air and the spoiling the environment through the oil wastes. Option value is an issue that is likely to arise where the public may decide to use their funds and assisting in maintaining the operations of the company to ensure that there is continuous supply of the products in the market (Osterwalder, Bernarda, Papadakos, Pigneur & Smith, 2014). The organization can decide to invest in the latest technological systems that will enable it to reduce the environmental emissions thus ensuring that it is fully observing the environmental sustainability measures. The public especially those people who do not directly use these oils products may thus assist in the company in realizing this goal enabling it to derive the non-use value.

Through the bequest value, the organization can manage to unearth the non-use value and improve its positioning in the market by making sure that the customers are willing to make payment to the company so that it can take measures that will ensure that that the oil and gas resources are available for future generations. Additionally, materials that are of no use at the moment can be maintained so that the coming generations can have access to them. The oil products are made from fossils, and there is a possibility that their amount may diminish with time and there is a need to ensure that the right measures are observed so that there is continued use and extraction from the earth's surface (Hutchinson, 2016). The Altruistic value will present the firm with the opportunity of the customers in the market willing to assist in maintaining the asset even though they do not use these gas products so that others in the society can continue to use them. The other non-use value that the company can undertake is the observation of the ethical issues that it is supposed to follow (Rein, Shields & Grossman, 2015). There exist many stakeholders who are interested in the affairs of the company, and the management must ensure that all their expectations are met.

The use value that can help in raising the number of customers willing to consume the organizations' products is the prices that the oil and gas products are selling in the market. In this case, the firm may consider selling at the price that is lower than the competitors and still works towards attaining profits from the sales made (De Villiers, Rouse & Kerr, 2016). This means that the entity will have to find a way of using a low amount of funds when they are acquiring the raw materials or other resources like labor to make sure that they can manage to sell its products at low prices in comparison to the rival businesses and still make profits (Lutchman, 2012). Additionally, engaging in activities that will make it possible for the management to have the platform to be able to continue running the business activities is another move that the Saudi Aramco can rely on under the concept of use value to increase its sales in the market.

There exist different factors that determine the willingness of a customer to make a payment which includes their own-value which they derive from the commodity they are buying. The extent to which the buyer is willing to use the product is crucial, and its usefulness to their life plays a critical role in determining the willingness of the client to make purchases. In the case of the Saudi Aramco, the customers willing to make payment is determined by their desire to use the gas and oil products. Another way that an organization can determine the willingness of its clients to make payment is by finding out its market value and the value uncertainty (Soyka, 2012). The market value involves finding out if the prices that commodities are selling in the market are favorable and presenting them with a value for their money. The issue of value uncertainty involves the uncertainty among the buyers about the value that they will derive from a given commodity. An organization can determine its willingness to accept (WTA) compensation by finding out its financial position and the quality of services it expects to receive. Additionally, the benchmark firm in the market will also play a critical role in deciding the WTA and the level of qualification of an employee (Crilly, Hansen & Zollo, 2016). An organization can determine the consumer surplus by making a comparison of the amount of money that consumers are willing to pay in the market and the prevailing prices of a given product. If an entity is offering quality commodities and the service is also good, then it means that the clients will be willing to pay more than what the product is selling in the market.

References

De Villiers, C., Rouse, P., & Kerr, J. (2016). A new conceptual model of influences driving sustainability based on case evidence of the integration of corporate sustainability management control and reporting. Journal of cleaner production, 136, 78-85.

Crilly, D., Hansen, M., & Zollo, M. (2016). The grammar of decoupling: A cognitive-linguistic perspective on firms' sustainability claims and stakeholders' interpretation. Academy of Management Journal, 59(2), 705-729.

Hutchinson, K. (2016). Survive and thrive: Three steps to securing your program's sustainability.

Lutchman, R. (2012). Creating and managing sustainable organizations. Lancaster, Pa: Destech Publications, Inc.

Mcelroy, M. W., McElroy, M. W., & Cheshire, I. (2016). The multicapital scorecard: Rethinking organizational performance.

Osterwalder, A., Bernarda, G., Papadakos, T., Pigneur, Y., & Smith, A. (2014). Value proposition design: How to create products and services customers want. Hoboken: John Wiley & Sons.

Rein, I., Shields, B., & Grossman, A. (2015). The sports strategist: Developing leaders for a high-performance industry. New York, NY: Oxford Univ. Press.

Shankleman, J. (2017). Study: Eight oil companies produce as much pollution as the entire U.S. ST. Louis Post-Dispatch. Retrieved from https://www.stltoday.com/business/local/study-eight-oil-companies-produce-as-much-pollution-as-the/article_ecfb01a3-36d9-5ca0-bb04-1dabb5652234.html

Soyka, P. A. (2012). Creating a sustainable organization: Approaches for enhancing corporate value through sustainability. Upper Saddle River, N.J: FT Press.