paper addresses the recycling company’s (TRC) approach with regard to the
structured planning for its future considering all core areas such as its
strengths, weaknesses, opportunities and threats. While strengths and weaknesses
highlight internal leverage points as well as show room for development, the
opportunities and threats highlight external factors that can be exploited to
support product/service offered or serve to hinder TRC’s success.
The company’s strengths to be
addressed include; 1. Steady client base 2. Customer retention 3. High barriers
to entry 4. Placement as unique industry leader
Steady client base
In the absence of competition TRC
is presented with the unique chance of being the only recycling and waste
company located within the city. Several already pre-negotiated contracts
between TRC and the city allow for material collections at residential
locations while third-party recycling programs with local manufacturers,
restaurants, hotels and hospitals present us with a steady client stream, owing
to the TRC’s ability to tailor services to specific client needs. This
translates to a strong and steady income stream.
In the recycling and waste
management industry as a whole, there is a lot of competition with the big
companies such as Waste Management (WM). TRC’s saving grace in this project scenario
is that it has the opportunity to expand and build on its huge lead created by
being the only such company in its primary location. Its marketing ads and tiptop
service have garnered it much customers while its low price has ensured high
customer return rate. With a minimal churn rate TRC has a significant advantage
in this marketplace.
Barriers to entry
Vertical integration is a strategy
where a company expands its business operations into different steps on the same
production path. TRC is really vertically integrated into the community thereby
protecting itself against new entrants by exerting control over the entire
local recycling and waste management stream. At this point, it becomes too
expensive for new competitors to process incremental tons at a material recycling
facilities (MRFs) because of higher transportation costs to compete within the
same market. Also, newer MRFs that are forced to attract recyclables from
established markets by offering higher rebates can easily destroy value, and
loss income in doing so. Continued business success due to a high barrier to
entry especially related to high startup costs means that there’s only going to
be a handful of potential competitors which is good for business making the
market domain hard to break in due to resources and assets required for general
recycling and waste management.
reputation in the city;
because a lot of its staff live there, it provides good quality of life and
improved standard of living while also providing good benefits for employees:
including medical, family care, financial and professional development. This
according to Maslow’s Hierarchy of needs means that employee needs are met with
respect to the following; physiological (earn enough to buy basics), safety
(healthcare, job security), social (teamwork, sense of belonging), esteem
(acknowledgment, promotions, recognition) and self-actualization (challenging)
(D. Martin pg. 72).
The company’s weaknesses include; 1.
Fluctuations in fuel cost 2. High transport cost 3. High operating cost 4.
in fuel costs;
the price and supply of fuel is unpredictable and fluctuates based on events
including geopolitical developments, supply and demand for oil and gas, actions
by OPEC and other oil and gas producers, war and unrest in oil producing
production patterns and environmental concerns. Fuel is needed to run the
collection and transfer trucks, and any price escalations or reductions in the
could increase operating expenses and have a negative impact on the
consolidated financial condition, results of operations and cash flows.
transportation cost; the cost of picking up and transporting recyclables
can range from $20 to $70 per ton, depending on the length and difficulty of
the recycling truck routes, and the cost of recycling is considerably much
higher when compared against the costs associated with landfills as the budget
also has to consider the energy cost of the fossil fuels burned to run these
trucks, as well as labor and fuel costs to sort, process, and market the
recycled material. The average mix of recyclables collected by a homeowner are
estimated to be worth about $125 per ton when the recycled materials are sold
to manufacturers, so there is a possibility for recycling programs to make a
net profit, but only if transportation, sorting, and processing costs are kept
lower than this value per ton. Also, the increased cost of shipping which get
edit to the original price of the product. Thus, making it expensive for the
customers which results in buyers searching for alternative sources.
In the 2015 Annual Report, Verizon
discussed current trends and how this affected their high costs of operation.
With the increase of sales in smart devices, the company’s operating expenses
have risen over the past two years. Also, the high cost of administrative
expenses for wages, bonuses, and severance have accounted for just under 30% of
total costs (Verizon, 2016). Due to the fact the company has stated that they
will be cutting costs to become more efficient in 2016 and beyond, this may not
bode well for research and development for new products and services.
The company’s opportunity includes;
publicity on social media; can be used to drive targeted traffic.
Creating a new page on your site is like taking a great selfie. You want the
world to see it and bask in its brilliance, but you don’t want to beg for
attention (or worse, pay for it). That’s why for web pages and better online
following a well-placed social media posts can make all the difference. It will
also serve as an avenue for customers and clients to express their satisfaction
or dissatisfaction, which we can then promptly address.
The company’s threats include;
continuous and discontinuous innovation; makes it hard to get people to change and embrace
new ideas. For my company, this will include changing what and how people
recycle and how we throw away trash; people in the United States want the easy
way, and to improve recycling and waste management, will take more effort on
existing or future regulations and/or enforcement actions may restrict our
operations, increase our costs of operations or require us to make additional
capital expenditures. “The waste materials industry is often at the mercy
of extensive and ever-changing regulatory pressures by federal, state, and
local governments. Regulations range from those involving environmental
concerns, safety concerns, and transportation concerns. Regulatory agencies
often monitor companies to which the regulations apply, and in many cases, they
have the power to force compliance on these companies. Compliance with new
regulations can be costly to all companies in the waste materials industry, and
in some cases the additional expense to comply can affect the bottom line. In
addition, enforcement of these regulations can include civil and criminal
penalties that can also adversely affect the company.” (Strategic Case
Analysis, pg. 94)
The company’s decision to venture
into the filtration and recycling of waste highlighted its capabilities,
resources and organizational knowledge of the emerging biodiesel industry. The benefits
of this new service are multifaceted in my opinion; both to the environment,
the customer and the consumers.
The environment benefits with
Air Quality: Since
biodiesel reduces emissions of harmful air pollutants such as asthma-causing
fine particles, greenhouse gases, and acid rain forming sulfur dioxides. Also,
it decreases carbon dioxide emissions.
waste cooking oil is used in the production of biodiesel, a waste is diverted
from municipal solid waste landfills and sewer systems.
water quality is significantly improved. Therefore, fewer sewer spills
contaminating streams, lakes, and bays happen because less fat, oil and grease
accumulates in the public sewer pipes.
Unlike conventional diesel, biodiesel is non-toxic, biodegradable and safer to
ship. Spills do not require emergency response clean-up activities.
The customers enjoy lower clean-up
costs associated with clogged up drains due to dumping waste oils into the
sewer systems. The end consumers enjoy, a steady supply of raw materials at a
competitive market price necessary to ensure continuous manufacturing of
biodiesel fuel. The company’s competition within the market is minimal due
largely in part to the absence of any viable close competitor within the same
area. The company chooses various industries in the biodiesel field where the
demand for recycled waste oil is in high demand. Its implementation strategy is
using its strong relationships and contact to get more important contracts as
necessary. Its competitive edge rests with its proximity to its target markets,
as well as the industry knowledge, reputation and company executive contacts.
Product marketing will follow a two-way strategy, being direct sales by
management and the use of sales agent.
Martin and K. Joomis, 2007. Building Teachers: A Constructivist Approach to
Education, pg. 72–75.