Terracycle Inc. Case Study Analysis
Introduction
Terra cycle is the company of the United States of America established in the year 2001 (Smith, 2008). The company was started by two university friends, Tom Szaky and Jon Beyer. The foundation of the company was settled for a competition of business plan. Both the partners sold the first product which they completely manufacture and design from garbage. The first product of their production was a fertilizer which they produce from peep of caterpillars and filled it into used water flasks. The Tom Szaky is the CEO of the company at a very shortage of 19 years. After recycling, the Terra Cycle Company provides a variety of products. The company grows and today they provide 50 types of recycle products manufacture from trash. In the year 2010, the company produces a 30-gallon trash container from waste pens.
Issue Identification
Basic Problem
The Basic situation in this case is that the “Finance Director” of a “Green Business Company” that is produce all “organic plant fertilizer” is considering launching two new fertilizer products.
Intermediate Problem
The intermediate situation in this case is that the organization is committed to being “free market economy” and this organization is used an “Environmentally Friendly Manufacturing Techniques” to produce “organic fertilizer” through “Recycling the Waste Bottles”. Here, students are completed the task in which include: “Market’s Documented Investigation”, Organization Revenue Size-up”, “Consumer Profile”, “competitive analysis”, “Statement of Cash Flow” and other analysis calculations.
Qualitative Analysis
For qualitative analysis, two frameworks are to be used to better understand the Terra Cycle business performance.
SWOT Analysis
In SWOT Analysis we analyze the Strengths, weaknesses, opportunities and threats of the terra cycle company.
Strengths
- In the industry of Recycling the Terra cycle has the Competitive advantage.
- The intellectual property of both the partners for running the business is a core strength for the company.
- The company has good brand equity and brand image in the market of the United States in recycling.
- Recycling reduces the rate of global warming, which increases the reputation of company.
Weaknesses
- The prime weakness of the company is weak organizational culture. The operational sectors are not much attached with the higher authority.
- The talented employees are also in very low quantity.
- The customer is not much satisfied with the recycle products because the productivity should need improvement as compared to other competitors.
Opportunities
- The expanding of business in different countries is a great opportunity for the Terra Cycle Company, which generates more profit and increases the brand recognition.
- Company should focus on the online business model because the increase in technology increases the customers 'expectations towards the company.
- Make the organizational culture diversified, which increases the effectiveness of the company.
Threats
- The Terra cycle Company has the threat of new entrants because an increase in technology helps the new entrants to copy the ideas of Terra cycle.
- Bargaining power of customers is high because the products are manufactured from trash. The customers want the products at very low prices.
- Threat of political factors because change in politics affects the whole policies from which the manufacturing industry suffer.
PESTEL Analysis
PESTEL analysis is helpful for understand the macro factors which affect the Terra Cycle Company.
Political Factors
The taxation rate, policies of government and competition regulations are the political factors which affect the Terra cycle. The increase in taxes decreases the level of revenue for the company. Changing in government policies directly affect the production costs because this whole system is interlinked.
Economic Factors
Inflation rate of United States, unemployment rate and interest rates these all factors affect negatively to the operations of Terra Cycle Company. Increase in inflation, unemployment and interest rates reduce the purchasing power of customer.
Social Factors
Demographically the company gain benefit because most of the youngsters like to purchase the recycle products of Terra cycle for their use. Education sectors has also positive impact on Terra cycle because most of the educators purchase these recycle products for the academic purpose.
Technological Factors
The company should invest in research and development to increase the productivity of the company. Increase in the internet, social media increase the chances of growth for the Terra Cycle Company.
Environmental Factors
The waste management, recycling and green consumption are the major environmental factors which affect the company.
Legal Factors
The Terra Cycle Company must consider the legal laws to keep the company reputable and profitable. The laws of discrimination, employment laws, health and safety Laws Company must follow. If the discrimination happens in a working place, the effectiveness decreases by unsatisfied employees. The company must focus on the health and safety of employees because if an employee feels secure, performing employees increase....
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