Introduction
Convened in 2005, the world summit on social development came up with three main pillars of sustainable development. The pillars included environmental development, social progress, and economic advancement.The three pillars of sustainability are applied when ranking various cities. The index, compiled by London Centers for Economics and Business Research, finds European cities such as Frankfurt, London, and Copenhagen as leading in terms of their sustainability index based on people (public), planetary (ecological), and returns (economics). In the profit-factor category, the index ranks Dubai in the 47th position while Madrid is in the fourth position (Koch, 2015).
Dubai is scheduled to hold Expo 2020, which it claims will be the most sustainable Expo. Indeed, looking forwards to the Expo, Dubai has put in place various strategies to ensure that the city operates sustainably. This paper presents Dubai as a sustainable city. It also compares its sustainability with that of Madrid. Dubai is among the Gulf nations of the Middle East while Madrid is in Spain in Europe. In the discussion of Dubai’s sustainability, the paper also considers how Dubai is making the city ready for Expo 2020. The paper uses Porter’s five forces, SWOT analysis, intensive strategy, CPM, integration strategy, and BCG as the six major tools for comparing sustainability efforts in both cities.
Porter’s Five Forces of Competitive Analysis
Madrid
Madrid is one of the highly ranked planetary sustainable cities across the globe and in the OECD. Therefore, it faces low rivalry from competing cities around the globe. The city already has various programs for maintaining sustainability. For example, it has implemented a BUS/HOV system, which has lower carbon emissions associated with transporting every passenger to the city (Sustainable Cities, 2015). With such successful models, the threat of new entrants on global platforms is currently low. However, in the coming years, more nations are likely to consider looking for better mechanisms for increasing sustainability because of the rising global warming and environmental degradation challenges that are associated with unsustainable lifestyles (Porter, 2008).
Sustainability substitutes are indefensible mechanisms for running a city. Considering the implications of substitutes such as environmental degradation and the rapid replenishment of energy resources, Madrid residents do not embrace such mechanisms. Indeed, the high concern about the need for conserving and preserving the environment makes threats of substitutes low. The demand for a sustainable city is high. This situation lowers the bargaining power of buyers while increasing the bargaining influence of suppliers. For example, Madrid aims at incorporating sustainable technologies into its operations, suppliers of the technologies have a higher-end score in terms of bargaining for better prices of the technologies and installations they sell.
Dubai
The Dubai 2020 Expo is an attempt to display how cities can execute their daily activities in planetary responsible ways. Expo 2020 Dubai (2016) reveals, “Expo 2020 Dubai will be a monument to the Green Economy, a landmark in sustainable development, and will contribute to the BIE legacy as one of the most sustainable Expos in history” (Para.5). Can Dubai hold such an Expo?
Koch (2015) asserts that London Center for Economics and Business Research ranks Dubai in the 47th position in terms of terrestrial sustainability. This finding shows high threats of rival cities aiming at dominating in terms of global environmental sustainability. Hence, Dubai faces a high rivalry among competing cities in terms of adopting environmental sustainability mechanisms.
To become the best environmentally sustainable city, Dubai has to invest more resources in improving its energy sourcing and processing to minimize carbon prints. Dubai is well ahead of all other urban centers in the UAE in terms of economic capability. Therefore, threats of new entrants are low. Its high economic capability can help in transforming the city into a planetary responsible base faster than any other urban center in the UAE. However, on global platforms, the threat is high. Other cities rank lower in sustainability, despite having higher economic capability than Dubai.
Dubai’s lifestyles support the high consumption of non-green and unsustainable energy sources due to the availability of cheap oil. The ranking of Dubai in the 47th position in terms of environmental sustainability supports this assertion. Therefore, the threats of substitutes are high. Dubai’s demand for sustainable cities is low, owing to its high consumption of non-green energy resources. Therefore, buyers’ bargaining power is high. Since technological change is necessary to drive sustainability programs, the suppliers have an upper hand in their bargaining power.
Competitive Profile Matrix
Competitive Profile Matrix (CPM) aims at identifying various major players of a company with the view of analyzing its strategic position based on the observed strengths and weaknesses. In the CPM, the critical success factor reflects various in-house and outdoor issues (David, 2011). The rating applies to strengths and limitations as David (2011) categorizes them on a scale of one to four in order of their strengths and weaknesses. The ratings of various weighted total scores are then compared to an identified sample organization. The comparative analysis yields crucial information for making internal strategic decisions.
Madrid and Dubai’s comparisons based on CPM may be accomplished based on factors such as a sustainable transport system from the context of the reduction of carbon footprints, clean water extraction technologies, waste recycling, building construction, and energy sources. Indeed, carbon footprints are one of the methodologies of determining the extent to which a city has embraced sustainable supply chains. Carbon footprints are computed from the consideration of inventories of greenhouse gas emissions within a city.
Such gases include methane, nitrous oxide, and carbon dioxide among others as defined by the Kyoto Protocol. Each of these gases contributes a given proportion to global warming. Any sustainable effort for Dubai that is geared towards the 2020 Expo strategy must ensure that the contributions of each of the gases that fit in the definition of greenhouse gas emissions have a reduced impact on global warming.
To mitigate the problems of depletion of natural resources, utilizing environmentally friendly sources of energy by any city that seeks to be sustainable is necessary. Even during the 2020 Expo, Dubai needs to ensure that the festival is accompanied by sustainable activities. Indeed, Kyong, Myong, and Hee (2009) assert that heating energy solutions in environmentally friendly festivals need to come from solar, wind, and hydro sources. Similarly, water wastage, which decreases both the quality and quantity of the accessible uncontaminated water, may be minimized by solutions such as the deployment of modern technologies in water recycling and/or the adoption of positive environmental friendly attitudes. Table 1 below shows the CPM for Dubai in comparison with Madrid based on their sustainability of transport systems, clean water extraction technologies, waste recycling, building construction, and energy sources, vegetation cover and forestation.
Table 1: CPM for Dubai and Madrid.
Table 1 shows Dubai lags behind Madrid in terms of environmental sustainability. This finding may be explained by various factors. Vegetation cover and forestation are important since they help in the absorption of Carbon Dioxide. Madrid has “has gained more than three million two hundred square kilometers of green areas that connect both sides of the city around it” (Madrid, 2008, p.2). It has also planted 26,000 trees.
This move shows the large vegetation coverage in the city to levels that are nonexistent in Dubai. Dubai’s limited vegetation cover relies heavily on the water since temperatures can rise to more than 40 degrees during summer. While the water used in greening the city is mainly recovered from the city’s wastewater, Dubai relies on desalination for its clean water suppliers. This process requires a heavy input of cheap energy from unsustainable sources. Although the two cities have traffic jams, Madrid has adopted sustainable solutions such as the BUS/HOV system (Sustainable Cities, 2015).
Intensive Strategy
An organization pursues various strategies to guarantee current and future success. One such strategy encompasses the intensive strategy. Intensive strategies include market infiltration, market developments, substitute channels, the designing of new commodities for new customers, and merchandise development (David, 2011). A strategy that presents the least risk to an organization is deemed fit to guarantee market penetration. The strategy involves efforts to sell more products to an organization’s current clientele. It may involve deriving new mechanisms in which customers can use and/or access a product.
Market penetration involves developing new ways of selling more products to a nearby market. The globalization of the organization’s products follows this reasoning. Alternative channels involve developing new ways of selling to customers such as online selling. Product development entails the innovation of a new product that targets an organization’s existing customers. Lastly, an organization can pursue an intensive strategy to develop new products that target new customers to increase its competitive advantage. This strategy is the riskiest since a new product may fail to meet the needs of new customers.
Alternately, a new product for a new customer, who an organization does not fully understand, may take a long time to break even. Considering the risks involved in developing new ways of enhancing environmental sustainability, different cities rely on the implementation of their evidence-based green technologies. Indeed, some of the intensive strategies do not find any application in cities’ sustainability efforts.
As Dubai looks forward to hosting the 2020 Expo on sustainability, it has developed various solutions. For example, Green Energy Solutions and Sustainability LLC is an organization incorporated into Dubai whose focus is on various environmental issues. It offers a green solution to waste management by investing in projects on landfill. Its primary aim is to generate electricity from gasses emitted in landfills. Today, the company has generated 1MW of electricity from landfills.
The company focuses on how it can generate even more electricity from all Dubai’s landfills. Hence, the company deploys the intensive strategy of market penetration. However, the strategy of new product development is still appropriate for Dubai. The booming Dubai’s economy is supported by unsustainable lifestyles. The construction industry sources sand from the sea. The sand is then used in the building and construction of real estates that are sold for cash as an economic strategy for reducing reliance on oil exports. This practice has a cost implication for the environment.
Royal Geographical Society (2016) reveals, “33 million cubic meters of sand and shell from the sea bed are dredged up to make islands” (Para.6). This move has implications for the flora and fauna or the sea ecosystem. While it may be necessary to divert from this practice, some environmentalists argue that a new island creates new dives, which may produce positive effects on the sea ecosystem.
While Dubai recognizes the necessity to promote sustainability, such efforts are much lower when compared to Madrid. While the city of Dubai is designed for vehicles propelled by readily available cheap fossil fuel, Madrid has shown incredible efforts to ensure the sustainability of its transport system. The fuel guzzlers of Dubai are normally stuck in traffic jams. Madrid has developed BUS/HOV programs to ensure it moves more people using less fossil fuel. Under the program, personal vehicles that carry their full capacity are allowed into the lanes used by buses to ferry people to the city and out of the city without being stuck in the traffic jam (Sustainable Cities, 2015).
This strategy encourages people to use lesser vehicles while going to the city. To this extent, Madrid deploys a product development-intensive strategy while Dubai mainly focuses on market penetration-intensive strategy. Indeed, Dubai’s lifestyle is supported by high air travel and a huge number of low-capacity vehicles, which often carry one person. The city is designed for motorists and not for pedestrians (Royal Geographical Society, 2016).
Although both Madrid and Dubai use trains to ferry people to the city, Madrid’s public road transport system carries more passengers efficiently to the city with lower carbon footprints. Madrid is designed for pedestrians and cyclists (Madrid, 2008). This finding implies that Madrid’s intensive strategy is more effective than that of Dubai in terms of enhancing planetary sustainability. Table 2 illustrates how the management of the road transport system by adopting an appropriate intensive strategy can help to increase the sustainability efforts of a city by reducing Carbon Dioxide and other greenhouse gas emissions.
Table 2: Energy needed in the transportation of one passenger per kilometer.
Integration Strategy
Integration strategies encompass mechanisms for expanding an organization or a sector in an economy. One of such strategies, namely vertical integration, entails a forward strategy in which an organization gains leadership in controlling supplies for raw materials or in manufacturing products and/or services (David, 2011). In terms of sustainability, integration may involve operating different projects to ensure true relationships that lead to cost-saving activities.
Unlike Dubai, Madrid has its suitability projects operating in an integrated manner through the “plan for sustainable use of energy and climatic change prevention and the water management” (Madrid 2008, p.2). Under the project, Madrid has planted over 26, 000 trees that are watered by the city’s 100% recycled water. Consequently, the city ranks position two globally in terms of cities that have the highest number of aligned trees. For Dubai, such an integrative strategy is absent. The city only depends on desalinated water to take care of its vegetation.
Through true partnerships by various sectors such as the energy and water management sector and the technology business sector, it is possible to conduct real-time analysis of data to prompt large savings and efficiency in the use of these two critical resources. In Madrid, such efforts have translated into significant savings on the resources, thus leading to lower waste generation. This strategy has not only increased the efficiency and effectiveness of sustainability but also lowered the cost of sustainable efforts. For example, due to the reduced wastes, Madrid’s waste treatment facilities are designed for lower capacities. This situation has led to lower start-up investments in such projects. As Dubai looks forward to hosting Expo 2020, it is arranging for developing partnerships in creating lasting solutions in terms of water and energy sustainability.
Dubai is developing partnerships for improving accessibility to these resources. It is also planning for their looming scarcity by developing integrated strategies for their conservation together with effectively managing the existing resources. Considering the outcomes of such initiatives as evident in the case of Madrid, as Dubai prepares to host Expo 2020, innovative and intelligent vertically integrated technologies and systems will go far in transforming the usage of energy and water to foster planetary sustainability. Indeed, the success of these arrangements goes far in making Expo 2020 the greenest and sustainable event.
SWOT Matrix
Cities encounter a myriad of challenges and opportunities in their operations. To determine how they need to respond to such situations, it is critical to conduct a SWOT analysis. However, a SWOT analysis is incomplete without the consideration of a SWOT Matrix. Under the SWOT Matrix, four types of strategies are possible to adopt in implementing the sustainability of both Madrid and Dubai cities. These are OS (Opportunities-Strengths), WO (Weaknesses-Opportunities), ST (Strengths–Threats), and WT (Weakness-Threats).
Strengths are the traits that enable a city to have an advantage in comparison with other cities in its sustainability implementation efforts. Madrid has the strength of having established a successful model for reducing carbon prints such as the BUS/HOV. It has achieved success in recycling “100% of residual waters (up to 500 million of m3) that are either returned to rivers or used for watering of green spaces and cleaning of streets” (Madrid, 2008, p.2).
It has established remnant management programs, a move that has led to the reduction of municipal wastes by 50%. The program has also led to the construction of a biometanization facility that is capable of extracting biogas from 60% of the total wastes in the city. Other strengths include the successful implementation of urban mobility projects, air quality projects, and cycling mobility in the city. Cycling mobility is particularly important due to its capacity to reduce carbon footprints.
Comparably, Dubai has the strength of reducing the cost of labor. It has an elaborate and efficient city transport system. Besides offering monetary assistance to various business units, it has a well-developed domestic market. Dubai has the weakness of high rates of loans. Madrid’s weaknesses include its high rating of debts, unattractive tax structures, highly competitive markets, and the high investment in new products’ research and development.
Opportunities are the existing external chances, which while utilized make an organization improve its performance (Hill & Westbrook, 2007). Dubai has opportunities such as the growing demand, new commodities and services, new markets, and the constant increment of people’s income levels. Madrid has opportunities that are similar to those of Dubai but has venture capital as an additional opportunity. Dubai’s threats include the likelihood of increasing labor costs, technological challenges, high competition, which lowers businesses’ profitability levels, increased interest rates, and problems in cash flows. Madrid’s threat includes tax changes, high labor costs, and high external risks while doing business.
The SO strategies deploy the internal strengths of an organization to exploit external opportunities (David, 2011). For Madrid, it can utilize its strength in the deployment of evidence-proven successful models for managing wastes and carbon footprints in developing products that release wastes, which can make the city unsustainable. Therefore, the city can exploit the opportunity of the increased people’s income to augment the consumption of new products sustainably. Through the strength of monetary assistance and the developed domestic market, Dubai can exploit the opportunity of developing new sustainable products to meet the growing demand with higher income expectations.
The WO strategies help in improving a firm’s internal weaknesses through the exploitation of various external opportunities (David, 2011). Madrid can overcome unattractive tax structures by utilizing its opportunities for new products for new markets. This goal can be achieved by providing tax relief to people who invest in research and development of new and sustainable products. Similarly, Dubai can overcome its weakness of high rates of loans by utilizing its opportunity for increased income to minimize the borrowing levels to fund household budgets.
The ST strategies deploy strengths to mitigate or reduce the effects of the existing external threats (David, 2011). Madrid can make carbon footprints savings through its strength in recycling wastes and the extraction of biogas from a large fraction of its wastes. This move can help to offset the threats of losses that arise from business risks. In both Madrid and Dubai, similar savings can be made in the use of clean vehicles and moving more people by putting lesser vehicles on roads to help in offsetting the common threat of high-interest rates. Monetary assistance from the government is an immense strength that Dubai can deploy to offset the threat of technological challenges, especially those that increase environmental sustainability.
The WT strategies act as defensive tactics. They aim to reduce the encountered internal weaknesses while ensuring the avoidance of external threats (David, 2011). Madrid can invest more in its recycling capability by improving its capacity to recycle by more than 60% so that it minimizes its sourcing of conventional energy and new materials, which attract higher taxation. After offsetting the technological challenges using the ST strategies, Dubai can also adopt a similar WT strategy to improve its planetary goals of sustainability as it looks forward to hosting the 2020 Expo.
Boston Consulting Group Matrix (BCG)
Organizations have autonomous divisions. These units make up business portfolios (David, 2011). In a case competition is witnessed between an organization’s divisions for different industries, it is crucial to develop different strategies for every business unit. The BCG matrix facilitates this effort. The goal of the BCG is to display differences between various divisions concerning market share relativity and the rate of growth of a given industry. The basic structure of the BCG matrix is shown in figure 1.
From figure 1, developing the BCG matrix requires the possession of information on cash flows and earnings in various divisions. In the context of environmental sustainability for both Madrid and Dubai, such information is required for divisions such as sustainable transport system projects, water management projects, and energy generation waste management projects among other divisions. However, limited quantitative cash flow and earnings or saving information are available for both Madrid and Dubai. For example, in the waste management and energy sectors, in the case of Dubai, the available data only indicates that Dubai LLC Company has generated 1MW of electricity to power municipality site offices and flagship project offices.
Various divisions in terms of ‘cash cows’, dogs, stars, and question marks underline the concept of profitability for various business divisions. Applying the concept in sustainability, it becomes void and unjustified since many of the sustainability projects such as waste recycling do not directly translate into profits in financial terms, but in other gains such as environmental protection through mitigating global warming. Therefore, quantifying such gains is problematic. Therefore, the construction of the BCG matrix for Madrid and Dubai is also problematic. However, qualitative information on Madrid’s sustainability investment as discussed by Hoekstra and Chapagain (2007), Madrid (2008), and Koch (2015) suggest that the city can score highly in terms of stars and ‘cash cows’ compared to Dubai.
Competitors’ Analysis
In an attempt to become the best sustainable city that is looking forward to hosting the 2020 Expo on sustainability, Dubai is making various arrangements. The city recognizes that in the changing environmental landscape, production innovation and water and energy production and utilization mechanisms imply the city’s future generation. Indeed, issues such as improved accessibility to these critical resources that drive the economies and ensuring their conservation and responsible management need to be integrated into sustainable cultures. Hence, for Dubai, environmental sustainability cannot be secluded from lifestyles.
Dubai is known for traffic congestion and the possession of a large number of recreational centers that can attract tourists from across the world to make it a major destination. Indeed, Dubai endeavors to become the main global economic hub to give it a competitive advantage other than relying on oil as a source of its competitive advantage. However, when compared to Madrid, it scores high in the use of non-green sources of energy, the disintegration of sustainability to its lifestyles and cultures, and the destabilization of its coastline natural forms to build extensive beaches for tourist attraction. This situation makes the city score low in terms of sustainable competitive advantage.
London Center for Economics and Business Research’s ranking shows the low competitiveness of Dubai in sustainability. Cities in Europe, including Madrid, are highly competitive in terms of their sustainability. Koch (2015) asserts, “Frankfurt and London, Copenhagen, Amsterdam, Rotterdam, Berlin, and Madrid make the top list” (Para.6). Berlin and Frankfurt are highly competitive in terms of planetary factors due to their deployment of effective strategies for managing wastes.
For North American cities, upon considering Carbon Dioxide as the competitive analysis factor in the sustainability of the planetary factors, the US’ cities score so low alongside various cities in the Middle East, including Dubai (Koch, 2015). Consistent with the analysis done on various approaches such as Porter’s five forces and the competitive profiles, the low ranking of Dubai in terms of sustainability evidences its low effectiveness in terms of environmental sustainability while compared to global planetary sustainability giants such as Madrid. An emerging question is, ‘why does Dubai score so lowly in planetary factors?’ ‘What can be done to reverse the situation?’
In response to the above interrogative, it is crucial to note that Dubai’s economy is highly dependent on energy and water, just like any other city. The sustainability issue is on how a city manages the interdependence of these two resources (Hoekstra & Chapagain, 2007). Large quantities of water are necessary for generating energy. A large amount of energy is also vital in generating adequate clean water. Dubai’s economy largely relies on cheap sources of energy. It possesses one of the largest energy consumption per capita across the globe (Bakari, 2014).
Conclusion and Recommendation
Dubai develops real estates and various monumental buildings to host recreation facilities that are established to support its diversification strategy of ensuring that it becomes the major economic hub in the world. It is recommended for it to develop planetary sustainability culture. Becoming the major economic hub in the world implies that Dubai will host a large number of people from foreign nations and from within the UAE. Sustainability cannot be realized with a large consumption culture for energy and water resources and at the expense of the available vegetation cover to put up real estates and skyscrapers.
Although Dubai’s economy cannot operate without the support of water and energy resources, it is recommended that apart from considering various policies to address the conservation of these resources, Dubai must consider that the resources are generated in environmentally sustainable ways. For example, the flashy lifestyle of Dubai is supported by huge freshwater consumption that is acquired through desalination. This process requires huge inputs of electrical power.
To enhance sustainability, Dubai not only needs to consider putting in place programs for recycling almost 100 % of its wastewater as it is witnessed in the case of Madrid but also needs to ensure cleaner sources of power that are used to operate desalination plants. One of such sustainable cleaner sources of energy is nuclear energy, as opposed to fossil fuel energy. The city can also guarantee the sustainability of its buildings by ensuring self-dependency in energy supplies. Such energy may come from wind and solar.
An innovative way of making Dubai the global leading sustainable city as it looks forward to hosting the 2020 Expo is to change its design architecture of future buildings. For example, the construction of skyscrapers that are powered by wind turbines located on every floor can help in ensuring sustainability. Although revolving skyscrapers imply that the buildings will constantly change their profiles, the main idea involves the generation of adequate power to power not only each floor but also the neighboring buildings that have already been developed without this new design. The city also needs to reduce its carbon footprints per person who travels into and out of it. To this extent, the city should benchmark from Madrid’s BUS/HOV system.
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