Creating Shared Value-Reflection

After reading Creating Shared Value, I realized that there are some factors affect company’s strategy. The author talks about three methods which could create shared value in the society as well as the way of how to implement. I’m very into the methods he mentioned in the essay, especially when I think about the changes of some high tech companies of the internet industry recent years.

What particularly aroused my interest is that company will receive tremendous profits while reconceiving products and Markets. Like Project Loon which is a research and development project being developed by X (formerly Google X) with the mission of providing Internet access to rural and remote areas. While having a huge number of internet users and mature market in the developed country, we can’t ignore the great potential in third world countries. If Google can deploy this project successfully, it will not only provide convenience to people in remote area but also gain greater because business here will often be far more effective than in mature market. People who are benefited from Google Loon will potentially become users of other Google products. After identifying the social needs, benefits and harms then the company could start point for creating this sort of shared value.

Shared value could not only be created by a single corporation but also generated by cluster companies. Specifically speaking, the palaces where have firms, related businesses, suppliers, service providers, and logistical infrastructure have benefits for developing its regional economy. Guangdong-Hong Kong-Macao Bay Area is a notable example to explain it. This Bay Area have education institutes in Hong Kong, research agencies in Shenzhen and manufacture factories in Dongguan. The cooperation between these areas has successfully formulated a chain from researching to developing products and has attracted a huge number of companies and talents pilling into the region. Besides that, cluster will enable more local procurement and less dispersed supply chains. And new value chain configurations will create demand for equipment and technology that save energy, conserve resources, and support employees. With the help of these benefits, in Guangdong-Hong Kong-Macao Bay Area, company could develop products five times quicker while cost one fifth comparing with the same project which develops in SF Bay Area. And also, some private fundings will start investing this area with the development of this area. It contributes to a virus circle for the whole industries.

I believe creating shared value is not only about how to focus on single company’s strategy but more like a holistic strategy of the whole industry. Government should build up friendly cooperative relationship with private organizations then try to figure out the best way to develop our society. It is true that some decisions might not bring benefits immediately but could be able to make profits in the coming future. We will have much more situations facing this kind of decisions, we should conduct a comprehensive analysis then make the best decision for both of us.