Swot Analysis of "TerraCycle: Outsmarting Waste" written by Stuart Read, Lepoutre Jan, Philippe Margery includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Outsmarting Terracycle facing as an external strategic factors. Some of the topics covered in TerraCycle: Outsmarting Waste case study are - Strategic Management Strategies, Entrepreneurship, Innovation, Sustainability and Strategy & Execution.
Some of the macro environment factors that can be used to understand the TerraCycle: Outsmarting Waste casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies,
central banks are concerned over increasing inflation, technology disruption, etc
Introduction to SWOT Analysis of TerraCycle: Outsmarting Waste
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in TerraCycle: Outsmarting Waste case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Outsmarting Terracycle, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Outsmarting Terracycle operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of TerraCycle: Outsmarting Waste can be done for the following purposes –
1. Strategic planning using facts provided in TerraCycle: Outsmarting Waste case study
2. Improving business portfolio management of Outsmarting Terracycle
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Outsmarting Terracycle
Strengths TerraCycle: Outsmarting Waste | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Outsmarting Terracycle in TerraCycle: Outsmarting Waste Harvard Business Review case study are -
Effective Research and Development (R&D)
– Outsmarting Terracycle has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study TerraCycle: Outsmarting Waste - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Outsmarting Terracycle in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Strategy & Execution field
– Outsmarting Terracycle is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Outsmarting Terracycle in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Outsmarting Terracycle is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Outsmarting Terracycle is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in TerraCycle: Outsmarting Waste Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Outsmarting Terracycle has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Outsmarting Terracycle has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Outsmarting Terracycle digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Outsmarting Terracycle has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Highly skilled collaborators
– Outsmarting Terracycle has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in TerraCycle: Outsmarting Waste HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Outsmarting Terracycle has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Outsmarting Terracycle to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Outsmarting Terracycle in the sector have low bargaining power. TerraCycle: Outsmarting Waste has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Outsmarting Terracycle to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Outsmarting Terracycle is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Outsmarting Terracycle has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in TerraCycle: Outsmarting Waste Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Diverse revenue streams
– Outsmarting Terracycle is present in almost all the verticals within the industry. This has provided firm in TerraCycle: Outsmarting Waste case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Weaknesses TerraCycle: Outsmarting Waste | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of TerraCycle: Outsmarting Waste are -
Low market penetration in new markets
– Outside its home market of Outsmarting Terracycle, firm in the HBR case study TerraCycle: Outsmarting Waste needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study TerraCycle: Outsmarting Waste, it seems that the employees of Outsmarting Terracycle don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Outsmarting Terracycle is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study TerraCycle: Outsmarting Waste can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Outsmarting Terracycle products
– To increase the profitability and margins on the products, Outsmarting Terracycle needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring
– The stress on hiring functional specialists at Outsmarting Terracycle has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Interest costs
– Compare to the competition, Outsmarting Terracycle has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High cash cycle compare to competitors
Outsmarting Terracycle has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High bargaining power of channel partners
– Because of the regulatory requirements, Stuart Read, Lepoutre Jan, Philippe Margery suggests that, Outsmarting Terracycle is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study TerraCycle: Outsmarting Waste, in the dynamic environment Outsmarting Terracycle has struggled to respond to the nimble upstart competition. Outsmarting Terracycle has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study TerraCycle: Outsmarting Waste has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Outsmarting Terracycle 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Outsmarting Terracycle has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Outsmarting Terracycle even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Opportunities TerraCycle: Outsmarting Waste | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study TerraCycle: Outsmarting Waste are -
Loyalty marketing
– Outsmarting Terracycle has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Using analytics as competitive advantage
– Outsmarting Terracycle has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study TerraCycle: Outsmarting Waste - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Outsmarting Terracycle to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Outsmarting Terracycle can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Developing new processes and practices
– Outsmarting Terracycle can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Outsmarting Terracycle in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Manufacturing automation
– Outsmarting Terracycle can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Outsmarting Terracycle can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, TerraCycle: Outsmarting Waste, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Outsmarting Terracycle in the consumer business. Now Outsmarting Terracycle can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Outsmarting Terracycle can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. TerraCycle: Outsmarting Waste suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Creating value in data economy
– The success of analytics program of Outsmarting Terracycle has opened avenues for new revenue streams for the organization in the industry. This can help Outsmarting Terracycle to build a more holistic ecosystem as suggested in the TerraCycle: Outsmarting Waste case study. Outsmarting Terracycle can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Outsmarting Terracycle to increase its market reach. Outsmarting Terracycle will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Outsmarting Terracycle is facing challenges because of the dominance of functional experts in the organization. TerraCycle: Outsmarting Waste case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Outsmarting Terracycle can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats TerraCycle: Outsmarting Waste External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study TerraCycle: Outsmarting Waste are -
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Outsmarting Terracycle business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Outsmarting Terracycle needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study TerraCycle: Outsmarting Waste, Outsmarting Terracycle may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Outsmarting Terracycle can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study TerraCycle: Outsmarting Waste .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Outsmarting Terracycle with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Outsmarting Terracycle.
Shortening product life cycle
– it is one of the major threat that Outsmarting Terracycle is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Outsmarting Terracycle in the Strategy & Execution sector and impact the bottomline of the organization.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Outsmarting Terracycle needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Consumer confidence and its impact on Outsmarting Terracycle demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
High dependence on third party suppliers
– Outsmarting Terracycle high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Technology acceleration in Forth Industrial Revolution
– Outsmarting Terracycle has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Outsmarting Terracycle needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Weighted SWOT Analysis of TerraCycle: Outsmarting Waste Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study TerraCycle: Outsmarting Waste needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study TerraCycle: Outsmarting Waste is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study TerraCycle: Outsmarting Waste is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of TerraCycle: Outsmarting Waste is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Outsmarting Terracycle needs to make to build a sustainable competitive advantage.
