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Tennant Company: Can “chemical-free” be a pathway to competitive advantage?

Company name
Tennant

Author(s)
Chris Laszlo, Eric Ahearn, Indrajeet Ghatge and Garima Sharma

Source 
Richard Ivey School of Business

Access this case
Tennant Company: Can “chemical-free” be a pathway to competitive advantage?

Year published 
2012

Last year covered in case 
2012

Abstract
Companies in every industry are attempting to reduce their use of chemicals, particularly synthetic organic compounds, where there is a perception of harm to human health or the environment. The industrial and commercial floor-cleaning equipment industry is no different, with many equipment manufacturers seeking to reduce their use of harsh cleaning chemicals such as petroleum solvents. But with every competitor pursuing similar greening efforts in a mature market, companies find it difficult to differentiate their offers to customers. Tennant Company chose to differentiate itself through a technology-driven business strategy based on chemical-free cleaning. Instead of reducing the use of harsh cleaning chemicals, or reducing the harshness of those chemicals, Tennant offered its customers a cleaning solution that used ionized tap water to clean and disinfect surfaces, thereby eliminating harsh chemicals altogether. The benefits to customers were numerous, including lower total cost of ownership and improved health and safety, while maintaining cleaning performance relative to conventional chemical-based products. This case helps to illustrate the challenge of profitably going beyond incremental “greening” efforts (aimed at doing less harm) to offer a disruptive step-change in environmental performance as the central argument for the company’s value proposition.

Teaching note

Key Management Reading

  • Ambec, S. & Lanoie, P. (2008). Does it pay to be green? A systematic overview. Academy of Management Perspectives. 45-62
  • Reinhardt, F. (1999). Bringing the Environment Down to Earth. Harvard Business Review. July; 149-157 

Other Readings

  • Wilson M, Schwarzman M, Malloy T, Fanning E, Sinsheimer P. (2008) Green Chemistry: Cornerstone to a Sustainable California. Special Report to the California Environmental Protection Agency. University of California Centers for Occupational and Environmental Health
  • Poliakoff, M., & Anastas, P. (2001). A principled stance. Nature, 413(6853), 257.
  • Hjeresen, D.L., Kirchoff, M.M., Lankley, R.L. (2002) Green Chemistry: Environment, economics and competitiveness. Corporate Environmental Strategy, 9(3). 259-266
  • Manley, Anastas, Cue. (2008) Frontiers in Green Chemistry: meeting the grand challenges for sustainability in R&D and manufacturing. Journal of cleaner production. 16:743-750
  • Larson, A. (2006) Illustrating the Finanical Benefits of Green Chemistry. Darden Business Publishing.

Audio/Visual Material

Discussion Questions

  • N/A

Green Chemistry Principle

  • Principle 1 Prevention
  • Principle 4 Designing Safer Chemicals
  • Principle 6 Design for Energy Efficiency
  • Principle 10 Design for Degradation
  • Principle 11 Inherently Benign Chemistry for Accident Prevention

Industry
Soaps and Detergents

Teaching Topic
Corporate Citizenship
Customer Relations
Environmental Issues
Innovation
Leadership
Mission/Vision/Values
Organizational Design and Change
Restructuring
Social Needs as Business Opportunity
Technological Change and Development
Sustainability

Management Discipline
Business, Government and Society
Leadership
Management
Operations
Organizational Behaviour
Strategy
Technology 

Business Logic
Cost of Labour
Differentiating Products
Managing Environmental Risks
Reduced Cost

Environmental Issue
Air Pollution
Climate Change
Ozone depletion
Waste
Water Pollution 

Region
North America

Self Identified as Green Chemistry?
No

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