Imagine that in 30 years, sales of energy will become a small part of the value created by energy and the image created by energy production would create just as much or even more value.
Energy can become a valuable ingredient in nation branding. Nation- or place branding is a difficult task since it is about finding something that is unique for a country and millions of people can align themselves with. This brand essence is something that visitors to the country should experience and products originating from the country can use as a frame of reference in their branding.
CHARGE Energy Branding held an event recently in Reykjavik regarding Iceland as a country brand and a country of origin for brands. The subject of the event was Sustainable energy and Competitive advantage. It was the first of smaller events related to CHARGE Energy Branding. These events are meant for local business communities and energy clusters to discuss specific topics related to their operations. The next event will take place in Copenhagen on the 25th of May. The subject of the event is Creating a shared language for Smart Energy – to accelerate Green Transition. Further information and registration can be found by following this link.
The aim of the event in Reykjavik was to bring together people from different corners of the Icelandic economy to discuss energy branding and how the image of Iceland as a country of clean, renewable energy can increase the value of products and services in Iceland. Could the sustainable image of Iceland be a competitive advantage for Icelandic companies?
What is a Competitive Advantage?
Michael Porter coined the term Competitive Advantage in 1980’s. The term refers to what it is that makes goods or services superior to all other choices customers have. Porter considered there to be three determinants of Competitive Advantage, Benefit, Target Market and Competition. Success is determined by how good you are in articulating the benefit to the target market and convince them that the benefit is better than the competition.
For a company to succeed, it must create clear goals, strategies and operations to build a sustainable competitive advantage. Corporate culture and the values of employees must align with the goals.
For a nation to create a sustainable competitive advantage, it would require a push from every stakeholder and unite them under the same values and goals. To discuss the potential were representatives from the office responsible for the image of Iceland abroad, a branding expert from an advertising agency, aluminium CEO and a seafood CEO.
The event was presented and moderated by Dr. Friðrik Larsen, CEO of LarsEn Energy Branding and the Chairman of CHARGE. He opened up by saying that nation branding is a choice but by choosing not to brand, people are choosing to waste one of the most valuable naturals resources.
First to present was Inga Hlín Pálsdóttir from Visit Iceland. She talked about the strategy of building the country brand Iceland. Visit Iceland was initially focused on building the nation brand in relations to tourism but then started to include Iceland as a country-of-origin-brand in their marketing message. Energy is a large factor in the image of Iceland with 97% of foreign visitors agree that they are positive towards the use of renewables in Iceland.
Viggó Örn Jónsson, creative director of Jónsson & Le’macks looked at the possibilities of leveraging Iceland’s renewables in the nation’s image even further in the story-telling of the nation brand of Iceland. He stated that products that use terms such as Organic, Fair Trade and Sustainable have become the luxury products of the Western World. International household brands are starting to look more closely at every aspect of their value chain to make sure that every link can meet the demands of consumers today. Iceland has a unique opportunity to become a luxury brand through storytelling. “We have this magic island where everything is powered by 100% clean energy people use volcanoes to heat their homes and power their kitchens”. But the challenge is to create a simple, clear story that everyone, cross-sectors, can tell. In Viggó’s opinion, everyone is selling the same product – the image of the country.
Next up was Ragnar Guðmundsson, CEO of Norðurál which is part of Century Aluminium. Ragnar’s company proudly states that they make the World’s Greenest aluminium. Just as Viggó pointed out – big global brands are looking at every way to green their value chain. While he makes the greenest aluminium in the world – it is hard for large global brands to make such claims since there is not yet a branded gold (or aluminium) standard for green aluminium. A green stamp of origin for aluminium is being developed and Ragnar hopes that within two years, aluminium producers will be able to differentiate their product and create a competitive advantage with the source of energy as a branded ingredient.
Guðmundur Kristjánsson gave the last presentation. Guðmundur is the CEO of Brim Seafood, the largest seafood company in Iceland. Guðmundur pointed out that there are many things that other sectors could learn from the Icelandic seafood sector. And indeed, he is correct. Iceland is one of the few countries in the world with sustainable fishing stocks – due to the transferable quota system. As Guðmundur pointed out – 30 years ago the country would fish twice the amount of today. Today, however, the revenue of the fisheries is twice the amount it was 30 years ago when the quota system was implemented. Instead of throwing away by-products and just keeping the fillets, the fishing industry is utilising every part of the fish caught and is not focusing only on fish as a food product. Fishing in Iceland has become an innovative high-tech industry that is not only focusing on the core commodity.
For energy, it might be put this way: Iceland is today throwing away an image that energy production produces just like it did with various parts of the fish 30 years ago.