Applied business Project Assessment 1

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Nov 24, 2024

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Sustainable and innovation integration in shoe companies in the USA and its impact on the circular economy Submitted To Evi Lanasier Student Name & Id Sunny (s4674349) Amit Kumar (s4643553) 1

Table of Contents 1.0 Introduction .......................................................................................................................... 3 1.1 Background of the Research ............................................................................................ 3 1.2 Problem Statement ........................................................................................................... 4 2.0 Research Question and Objectives ....................................................................................... 4 3.0 Literature Review ................................................................................................................. 5 3.1 Issues associated with the manufacturing of the shoes and perception of companies in undertaking innovation ........................................................................................................... 5 3.2 Critical review of the link between innovation, economy, and sustainable practices in the manufacture of the shoes .................................................................................................. 5 3.4 Successful implications of sustainable practices in footwear products and on the circular economy .................................................................................................................... 6 4.0 Conclusion ............................................................................................................................ 7 Reference List ............................................................................................................................ 8 2

1.0 Introduction 1.1 Background of the Research The context of the research is focused on the understanding and critical evaluation of impact of sustainable and innovative performances of shoes companies in USA and its link to the circular economy. According to the study of Schwab et al . (2009), teenagers are very much fascinated with the wearing of stylish shoes and sneakers. However, the users have been unknown of the materials that are used for the manufacturing of the sneakers like the harmful chemicals being present. The harmful chemicals are being known to either dumped in the landfills or being washed to the drains that do flow to the local areas. Mainly the adverse environmental impacts are caused even due to the throwing of the sneakers into the trash which do results in the form of garbage. The toxic chemicals do create harmful impact on the environment. USA have been a developed country where with the high-income standards, the presence of the Gen Z and the Millennials are common and so are the demands of the stylish apparels and wearables. From the statistical presentation, it has been evidenced that in USA, the revenue earned by the footwear market itself has been US$88bn (statista, 2023). This figure does clearly indicate of the high demand of the wearable shoes and footwear products among the users. Figure 1: Revenue of footwear products in USA by segments (Source: statista, 2023) 3

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However, one of the relevant factors that has been playing essence in the footwear sector in USA have been the gradual demand for sustainable products even in the segments of the footwear. With the severe issue of toxic chemicals being release by the manufacturing of the shoes, it has been idealized that companies are now showing concern towards it. Moreover, there has been a transition noticed in the demands of the customers from stylish goods to goods that are more eco-friendly (Perez, 2022). Therefore, the essence has risen among the management of the companies to review the existing business models and bring a change in it for addressing the sustainable demands of footwear. The management is however more concerned with the impact on the circular economy through the innovative approach and the report is constructed to explore on the influence of sustainable footwears on the economy of companies focusing in USA market. From the research, a vital implication is to gain better insights on how the footwear companies could manage sustainability with innovative approach and have an impact on the economy as well. More outcome can be gained of how the brands in USA are tending to embrace innovation keeping the Corporate Social Responsibility in the policy. 1.2 Problem Statement Most of the organizations are still not aware of the sustainability in the manufacturing of shoes, and therefore causing negative impacts to the environment. Therefore, it needs to be studied that how the shoe company could foster sustainability even in the manufacture of shoes aligned with innovation. 2.0 Research Question and Objectives The objectives are:  To identify the issues associated with the manufacturing of the shoes and footwear products concentrating in USA through qualitative method (perception of companies)  To assess the change witnessed in the customers demands for the purchase of the shoes  To evaluate and examine the relationship that do exists between innovation and sustainable practices in the manufacture of the shoes  To identify of the successful implications of sustainability in shoes and impact on the circular economy Research Questions 4

RQ1.What has been the relation of sustainable shoes and demands of customers currently in USA? RQ2.What has been the perceived threats associated with the innovation in shoes in the minds of users? RQ3.Does Corporate social responsibility do have a positive relation with the concept of development of innovative shoes in USA? 3.0 Literature Review 3.1 Issues associated with the manufacturing of the shoes and perception of companies in undertaking innovation Kim et al. (2022) argued that lechates which are released from the microplastic fragments that are contained the soles of the shoes do causes adverse impact on the planet. In the plastic material, it has been evidenced that there are different kinds of additives which have traces of the Ethylene-vinyl acetate (EVA) spectrum. Some of the brands like Nike, Vagabond have been studied over which chemical analysis have been performed. From the different soles like the midsole or the lining, there had been extraction of chemicals like methanol and with a sample of around 31 compounds, antioxidants, vulcanisation and others have been presence in millions (Dahlberg, 2010). Users generally following the Diffusion of Innovation model, do previously stood in the position of Late Majority where around 34% did believed in the concept of innovation even in shoes. The myth had been prevailing that with innovation, the companies may mislead them with original products lines or may charge more price with poor technology. 3.2 Critical review of the link between innovation, economy, and sustainable practices in the manufacture of the shoes Today’s customers from different segments specially in developed countries like USA, the awareness of the harmful impacts caused by chemicals have been found. Customers are preferring products that are eco-friendly and sustainable in practices. Polese et al . (2019) similarly stated that with the help of the text analytics study and with gathering of the opinion of the customers over Twitter, the data has been collected. The findings do suggest companies are now focusing on having 'innovative eco-value propositions' which can be seen in both the products and the services being offered. In consideration of USA, the demand for sustainable 5

footwear products from the period of 2016 to 2027 has been estimated and results indicates of growth in terms of athletic and non-athletic shoes (grandviewresearch, 2023). Figure 2: Demand for the sustainable footwear products in USA (Source: grandviewresearch, 2023) According to the study of Pacheco-Blanco et al. (2018), with the ease of access to the information, it has been tracked that organizations are focusing more on sustainable products not only in fashionable ones but even in the footwear with the growing concern among the customers. 3.4 Successful implications of sustainable practices in footwear products and on the circular economy In the study of Dwivedi et al . (2022), for the manufacturing firms, the integration of sustainability has become a mandatory approach. With the integration of the Industry 4.0, companies have not only urged to increase the operations through technology but even create an impact on the economy too. Waste dumping and evaluation of the risks are done accurately through the deployment of the technology-oriented tools in the manufacturing process. With innovation came the concept of usage of recycled products that did have zero impact on the environment and with such products being technically reviewed, the remaining risks do gets reduced. It does reduce the amount of the dumping and even causing low landfill thus not impacting the environment on a greater extent. Technology as form of innovation do helps in the proper waste management records being presented and pointing at 6

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the materials being used through data being cross-checked and thus fostering in the growth of the circular economy. 4.0 Conclusion The conclusion can be thereby drawn that in USA with the growing demands of sustainable footwear products, it has been identified that companies are showing interest in understanding the true potentiality of sustainable footwears. It has helped in elimination of the myth that with innovation, high costs are incurred. This has turned the attention of the shoe companies and even the users to focus on how recycling of the products could be re- worn with a better picture and drive the economy for the company in a presentable manner. 7

Reference List Dahlberg, A.K., 2010. Chemical analysis of organic compounds in footwear. Dwivedi, A., Moktadir, M.A., Jabbour, C.J.C. and de Carvalho, D.E., 2022. Integrating the circular economy and industry 4.0 for sustainable development: Implications for responsible footwear production in a big data-driven world. Technological Forecasting and Social Change , 175 , p.121335. grandviewresearch.com 2023. Sustainable Footwear Market Size | Industry Report, 2020- 2027 [Online]. Available at: https://www.grandviewresearch.com/industry- analysis/sustainable-footwear-market (Accessed: 9 August 2023). Kim, L., Kim, D., Kim, S.A., Kim, H., Lee, T.Y. and An, Y.J., 2022. Are your shoes safe for the environment?–Toxicity screening of leachates from microplastic fragments of shoe soles using freshwater organisms. Journal of Hazardous Materials , 421 , p.126779. Pacheco-Blanco, B., Martínez-Gómez, M., Collado-Ruiz, D. and Capuz-Rizo, S.F., 2018. Sustainable information in shoe purchase decisions: Relevance of data based on source. Sustainability , 10 (4), p.1170. Perez, N.Y.H., 2022. Evaluation of Sustainability & Materials Among Major Footwear Brands. Polese, F., Ciasullo, M.V., Troisi, O. and Maione, G., 2019. Sustainability in footwear industry: a big data analysis. Sinergie Italian Journal of Management , 37 (1), pp.149-170. Schwab, C., Bowman, M., Stringham, S. and Fagan, J.M., 2009. Sneakers Running our Environment into the Ground. statista.com 2023. Footwear - United States | Statista Market Forecast [Online]. Available at: https://www.statista.com/outlook/cmo/footwear/united-states (Accessed: 9 August 2023). statista.com 2023. Footwear - United States | Statista Market Forecast [Online]. Available at: https://www.statista.com/outlook/cmo/footwear/united-states#revenue (Accessed: 9 August 2023). 8

Applied business Project Assessment 1

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