Understanding Value Chain Participant Contribution to the Competitiveness of Sustainable Firms

Historically, there have been trade-offs between the needs for profitability and sustainability in business strategy. This has been changing as the two needs have become interwoven in the pursuit of competitive advantage for many firms. This relatively new phenomenon of profitability being tied to sustainability has been examined from many perspectives, including internal and external pressures to be sustainable and competitive advantage from sustainable practices. Hence, using a model developed from an analysis of the literature, the relative importance of value chain participants and their respective contribution to the competitiveness of firms adopting sustainable practices will be investigated. The validity of the weight of each value chain participant was tested, using a deductive approach. Data collection was carried out through a questionnaire administered by Eco-Business, a large media company addressing ethical and sustainable business practices worldwide, and data analysis was done using multiple regression. Overall, the inclusion of Corporate Social Responsibility in a firm’s business strategy was the greatest influence for sustainability compared to its competitors. From primary activities of the value chain, the largest influence on a firm’s sustainability is its demand that suppliers have sustainable business practices. To further evaluate the relative importance of value chain participants for a global sample, different geographical regions and industry sectors have been analysed separately. While the results were fairly similar for each subsample, several disparities have arisen for certain geographical regions and industry sectors.