Abstract unique chance of being the only recycling and

Abstract

This
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.

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Strengths

The company’s strengths to be
addressed include; 1. Steady client base 2. Customer retention 3. High barriers
to entry 4. Good reputation in the city

Steady client base

In the absence of competition TRC
is presented with the unique chance of being the only recycling and waste
management 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.

Customer Retention

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) controlling major market shares. 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.

 High
Barriers to entry

“Vertical integration is a strategy
where a company expands its business operations into different steps on the
same production path. (Investopedia.com)” 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 facilities that are forced
to attract recyclables from established markets by offering higher incentives
can easily destroy value, and lose income in doing so. Continued business
success due to a high barrier to entry especially related to high capital means
that there’s only going to be a handful of potential competitors which is good
for business, making this industry hard to break in due to resources and assets
required for general recycling and waste management.

Good 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).

Weaknesses

            The company’s weaknesses to be
addressed include; 1. Fluctuations in fuel cost 2. High transport cost 3. High
operating cost 4. Marketing strategies

Fluctuations 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 countries, regional
production patterns and environmental concerns. (NAVIOS, 2016)” Fuel is needed
to run the company’s collection and transfer trucks, and any price escalations
or reductions in the supply could increase operating expenses and have a
negative impact on the company’s consolidated financial condition, results of
operations and cash flows.

High 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. (Ashley, 2012)” Also, the increased
cost of shipping which get added to the original price of the product. Thus,
making it expensive for the end resale customers which results in buyers
searching for alternative sources. According to Ashley Micks, while the total
cost associated with the collection of recyclables from the average homeowner
is $125 per ton which is relatively cheap, for companies like TRC and others in
this industry to benefit from this low cost overall, they have to minimize
costs associated with transportation, sorting, and processing.

High Operating Costs

Within the last two decades the
overall recycling behavior has increased while this is associated with having
more recyclable materials to collect which is generally beneficial to TRC, the
high administrative costs associated are huge. When considering employee wages
and salaries, bonuses and raises, and insurance costs such as health, dental
and vision care, as well as severance packages. Moving forward TRC will
endeavor to cut overall non-essential administrative costs as the opportunities
present itself.

Marketing
Techniques

With
TRC’s penetration pricing marketing strategy, the inherent concern of low price
of products/services when compare to the overall high cost of operation is
imbalanced. To endure continued success and
avoid bankruptcy in the far future TRC’s marketing team will need to evaluate a
new approach to marketing to optimize profits.

Opportunities

            The company’s opportunity to be addressed include; 1.
Increased publicity on social media 2. Acquisitions and strategic partnerships
3. Improving customer recycling habits

Increased 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.
(Contentfac.com)” It will also serve as an avenue for customers and clients to
express their satisfaction or dissatisfaction, which we can then promptly
address.

Acquisitions and strategic
partnerships

            The unique chance to expand our
collection fleet as well as reach with regard to both clients and businesses,
restaurants, hospitals and hotels will be explored by the acquisition of a
smaller recycling and waste management company in a neighboring community. This
potential addition will foster company growth as well as the added benefits of
acquiring all their fixed assets in form of buildings, machinery and other
liquid assets where available.

Improving customer recycling habits

The
work of Vining & Ebreo (1990) indicates a direct correlation between
recycling knowledge and the rate at which people recycle. This means that the
greatest difference between recyclers and non-recyclers is their knowledge
about recyclable materials.          With research identifying recycling knowledge
as a key factor in establishing crucial recycling behavior. TRC will explore
the opportunity of raising public awareness on recycling knowledge. 

Threats

The company’s threats include; 1.
Ever evolving market 2. Dynamically continuous and discontinuous innovation 3.
Extensive government regulation

Ever evolving market

A major threat to any company is the fear of
the unknown and how said unknown can forever influence and shape the future of
the company. In this ever-changing world, the success of TRC depends on its
ability anticipate these changes, adapt to accommodate these changes and reacts
appropriately to still be able to meet customer needs.

Dynamically continuous and
discontinuous innovation

Continuous innovations and
technological advancements 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
everyone’s part.

Extensive government regulation

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)

Consumer
trends

            For TRC launching the new
product/service of cooking oil filtration and recycling will depend on consumer
trends. On the front-end, restaurants customers will recycle to save eliminate
costs associated with expensive plumbing fixes while demonstrating to their
clientele that they are concerned about environmental protection. On the
back-end, biodiesel customers are burdened by the high cost of maintenance and
upkeep of feedstock plants, so they look for readily available cheaper
materials which we provide.

            As millennials become more aware of
the growing biodiesel industry they will continue to seek out more
environmentally friendly fueling options which would translate to a rise in
product sales for TRC.

Ethics
and Affects

            With the new product/service launch
TRC must remain compliant to state and federal laws with respect to storage and
transportation of waste cooking oils, fat and grease. With state laws listing
waste cooking oil as hazardous material, its handling and transport require
permits and licensing. Most states also stipulate volume and weight limits, for
example, “the California Department of Transportation limits the transport of
hazardous waste to 15 gallons or 125 pounds per vehicle. (chulavistaca.gov)”
TRC has to ensure that it adheres to all the necessary laws to allow continued
business operations within its state and avoid fines as well as revoked
licenses and a negative reputation.

            While all listed factors are
continuously changing TRC will analyze their various influences. As the finance
and sales teams might want to explore other pricing strategies such as the
premium strategy to accumulate more revenue to meet and surpass operating
costs, the marketing team might have a difficult time convincing customers to
pay significantly much more. By having all teams work together with open
communication will ensure that they are all always informed and they can take
full advantage of all strengths and weaknesses appropriately.

Core
Competencies

            The company’s decision to venture
into the filtration and recycling of waste cooking oils, fat and grease highlighted
its capabilities, resources and organizational knowledge of the emerging
biodiesel industry.  It also shows how
flexible TRC is with respect to the evolution of the market, adapting to meet
the demand created by the changing waste oil recycling market. 

 

 

 

 

 

 

 

 

 

 

 

 

Reference

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January 20, 2018 from

Kazim Demir, Anthony Ikhimokpa, Dung Nguyen,
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Waste
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Vertical
Integration. Retrieved on January 20, 2018 from

Vining,
J., & Ebreo, A. (1990) What makes a recycler: a comparison of recyclers and

Non-recyclers. Environment and behavior 22:1,
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