Sustainable Growth at TerraCycle: Should Manufacturing Be Moved? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Sustainable Growth at TerraCycle: Should Manufacturing Be Moved?
As of April 2012, TerraCycle had witnessed exponential growth over the past few years due to its unique value proposition of creating a line of consumer products out of trash. With continued global expansion, the firm's biggest challenge was how to move forward while staying true to its mission to eliminate as much waste as possible from landfills, make fun products that consumers liked, and turn a profit. Operationally, TerraCycle was losing money on every domestically manufactured product and was regularly late on delivering its shipments to a major retail customer. All signs indicated that the company should move some of its manufacturing to an offshore location; however, TerraCycle had built its reputation on its strict adherence to the principles of sustainability, and such a move could cause a significant public-relations problem. There was little time to act, as orders from Walmart and Target were piling up. Should the CEO move some of TerraCycle's production to China? Diane M. Phillips is affiliated with Saint Joseph's University. Jason Keith Phillips is affiliated with West Chester University.
Swot Analysis of "Sustainable Growth at TerraCycle: Should Manufacturing Be Moved?" written by Diane Phillips, Jason Keith Phillips includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Terracycle Phillips facing as an external strategic factors. Some of the topics covered in Sustainable Growth at TerraCycle: Should Manufacturing Be Moved? case study are - Strategic Management Strategies, International business, Manufacturing, Marketing, Sustainability and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Sustainable Growth at TerraCycle: Should Manufacturing Be Moved? casestudy better are - – challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs,
increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Sustainable Growth at TerraCycle: Should Manufacturing Be Moved?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Sustainable Growth at TerraCycle: Should Manufacturing Be Moved? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Terracycle Phillips, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Terracycle Phillips 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 Sustainable Growth at TerraCycle: Should Manufacturing Be Moved? can be done for the following purposes –
1. Strategic planning using facts provided in Sustainable Growth at TerraCycle: Should Manufacturing Be Moved? case study
2. Improving business portfolio management of Terracycle Phillips
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Terracycle Phillips
Strengths Sustainable Growth at TerraCycle: Should Manufacturing Be Moved? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Terracycle Phillips in Sustainable Growth at TerraCycle: Should Manufacturing Be Moved? Harvard Business Review case study are -
Organizational Resilience of Terracycle Phillips
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Terracycle Phillips does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Terracycle Phillips in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Leadership & Managing People field
– Terracycle Phillips 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 Terracycle Phillips in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Terracycle Phillips is one of the leading recruiters in the industry. Managers in the Sustainable Growth at TerraCycle: Should Manufacturing Be Moved? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Sustainable Growth at TerraCycle: Should Manufacturing Be Moved? Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Strong track record of project management
– Terracycle Phillips is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Terracycle Phillips is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Diane Phillips, Jason Keith Phillips can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Cross disciplinary teams
– Horizontal connected teams at the Terracycle Phillips are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Highly skilled collaborators
– Terracycle Phillips 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 Sustainable Growth at TerraCycle: Should Manufacturing Be Moved? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Terracycle Phillips has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Sustainable Growth at TerraCycle: Should Manufacturing Be Moved? 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.
Innovation driven organization
– Terracycle Phillips is one of the most innovative firm in sector. Manager in Sustainable Growth at TerraCycle: Should Manufacturing Be Moved? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Terracycle Phillips 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 Terracycle Phillips is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Sustainable Growth at TerraCycle: Should Manufacturing Be Moved? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Sustainable Growth at TerraCycle: Should Manufacturing Be Moved? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sustainable Growth at TerraCycle: Should Manufacturing Be Moved? are -
Slow decision making process
– As mentioned earlier in the report, Terracycle Phillips 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. Terracycle Phillips 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.
Lack of clear differentiation of Terracycle Phillips products
– To increase the profitability and margins on the products, Terracycle Phillips needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Terracycle Phillips has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Terracycle Phillips supply chain. Even after few cautionary changes mentioned in the HBR case study - Sustainable Growth at TerraCycle: Should Manufacturing Be Moved?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Terracycle Phillips vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Sustainable Growth at TerraCycle: Should Manufacturing Be Moved? HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Terracycle Phillips has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Terracycle Phillips 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Sustainable Growth at TerraCycle: Should Manufacturing Be Moved?, in the dynamic environment Terracycle Phillips has struggled to respond to the nimble upstart competition. Terracycle Phillips has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Terracycle Phillips has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High cash cycle compare to competitors
Terracycle Phillips 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Sustainable Growth at TerraCycle: Should Manufacturing Be Moved?, is just above the industry average. Terracycle Phillips needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Sustainable Growth at TerraCycle: Should Manufacturing Be Moved?, it seems that the employees of Terracycle Phillips 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.
Opportunities Sustainable Growth at TerraCycle: Should Manufacturing Be Moved? | 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 Sustainable Growth at TerraCycle: Should Manufacturing Be Moved? are -
Using analytics as competitive advantage
– Terracycle Phillips 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 Sustainable Growth at TerraCycle: Should Manufacturing Be Moved? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Terracycle Phillips to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Terracycle Phillips can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Terracycle Phillips can use these opportunities to build new business models that can help the communities that Terracycle Phillips operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Terracycle Phillips can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Terracycle Phillips can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Terracycle Phillips can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Terracycle Phillips can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Terracycle Phillips in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Terracycle Phillips is facing challenges because of the dominance of functional experts in the organization. Sustainable Growth at TerraCycle: Should Manufacturing Be Moved? 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.
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 Terracycle Phillips in the consumer business. Now Terracycle Phillips can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Terracycle Phillips can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Leadership & Managing People segment.
Better consumer reach
– The expansion of the 5G network will help Terracycle Phillips to increase its market reach. Terracycle Phillips 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.
Manufacturing automation
– Terracycle Phillips can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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, Terracycle Phillips 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, Sustainable Growth at TerraCycle: Should Manufacturing Be Moved?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Sustainable Growth at TerraCycle: Should Manufacturing Be Moved? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Sustainable Growth at TerraCycle: Should Manufacturing Be Moved? are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Sustainable Growth at TerraCycle: Should Manufacturing Be Moved?, Terracycle Phillips may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Shortening product life cycle
– it is one of the major threat that Terracycle Phillips is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Terracycle Phillips with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Terracycle Phillips in the Leadership & Managing People industry. The Leadership & Managing People industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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 Terracycle Phillips in the Leadership & Managing People sector and impact the bottomline of the organization.
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 Terracycle Phillips business can come under increasing regulations regarding data privacy, data security, etc.
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.
Regulatory challenges
– Terracycle Phillips 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 Leadership & Managing People industry regulations.
Consumer confidence and its impact on Terracycle Phillips 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
– Terracycle Phillips 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.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Terracycle Phillips will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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 Terracycle Phillips.
Weighted SWOT Analysis of Sustainable Growth at TerraCycle: Should Manufacturing Be Moved? 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 Sustainable Growth at TerraCycle: Should Manufacturing Be Moved? 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 Sustainable Growth at TerraCycle: Should Manufacturing Be Moved? 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 Sustainable Growth at TerraCycle: Should Manufacturing Be Moved? 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 Sustainable Growth at TerraCycle: Should Manufacturing Be Moved? 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 Terracycle Phillips needs to make to build a sustainable competitive advantage.