Abstract
One of the ways leading towards sustainable development of the firms is to adopt proactive approaches to identify green demand. This study first examines the relevant contents of green demand then develops a demand chain management (DCM) approach to analyze the identifying process of green demand. The approach makes use of institutional theory to explain how external environmental conditions influence the firms’ analysis and natural-resourced-based view to suggest how the firms could employ own resources and capabilities associated with natural environment to identify green demand for improving environmental, financial, and social performance.This study examines the DCM approach with selected cases from several firms offering electronics and electro-optic products. Through the product life cycle analysis in the DCM approach, the case firms may derive the green demand stemming from institutional forces into operations and connect the selection, deployment, and application of resources and capabilities with the life cycle stage. Collaboration in the DCM approach can also enhance the firms’ natural resources and capabilities to respond to green demand from the institutional forces, even to grasp and create new demand. When firms reinforce more its own natural resources and capabilities to influence institutional forces proactively, it can have more opportunities to create new green value, improve green performance, and then achieve the objectives of identifying green demand. Finally, this study summarizes the findings in a set of green demand identification processes and procedures.