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 - – banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, there is backlash against globalization, cloud computing is disrupting traditional business models, technology disruption,
digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, 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 -
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.
High switching costs
– The high switching costs that Terracycle Phillips has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Sustainable margins compare to other players in Leadership & Managing People industry
– Sustainable Growth at TerraCycle: Should Manufacturing Be Moved? firm has clearly differentiated products in the market place. This has enabled Terracycle Phillips to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Terracycle Phillips to invest into research and development (R&D) and innovation.
High brand equity
– Terracycle Phillips has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Terracycle Phillips to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
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.
Effective Research and Development (R&D)
– Terracycle Phillips 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 Sustainable Growth at TerraCycle: Should Manufacturing Be Moved? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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.
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.
Diverse revenue streams
– Terracycle Phillips is present in almost all the verticals within the industry. This has provided firm in Sustainable Growth at TerraCycle: Should Manufacturing Be Moved? 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.
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.
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 -
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Diane Phillips, Jason Keith Phillips suggests that, Terracycle Phillips 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.
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.
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.
Slow to strategic competitive environment developments
– As Sustainable Growth at TerraCycle: Should Manufacturing Be Moved? HBR case study mentions - Terracycle Phillips takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
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.
High operating costs
– Compare to the competitors, firm in the HBR case study Sustainable Growth at TerraCycle: Should Manufacturing Be Moved? 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 Terracycle Phillips 's lucrative customers.
Low market penetration in new markets
– Outside its home market of Terracycle Phillips, firm in the HBR case study Sustainable Growth at TerraCycle: Should Manufacturing Be Moved? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Terracycle Phillips has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Sustainable Growth at TerraCycle: Should Manufacturing Be Moved? should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Terracycle Phillips is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Terracycle Phillips needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Terracycle Phillips to focus more on services rather than just following the product oriented approach.
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 -
Creating value in data economy
– The success of analytics program of Terracycle Phillips has opened avenues for new revenue streams for the organization in the industry. This can help Terracycle Phillips to build a more holistic ecosystem as suggested in the Sustainable Growth at TerraCycle: Should Manufacturing Be Moved? case study. Terracycle Phillips 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 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.
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.
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.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Terracycle Phillips to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Terracycle Phillips to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Terracycle Phillips to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Terracycle Phillips 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.
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.
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 -
Increasing wage structure of Terracycle Phillips
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Terracycle Phillips.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Terracycle Phillips can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Terracycle Phillips 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 Sustainable Growth at TerraCycle: Should Manufacturing Be Moved? .
Technology acceleration in Forth Industrial Revolution
– Terracycle Phillips has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Terracycle Phillips needs to keep up with the evolution of technology in the Leadership & Managing People 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.
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.
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.
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.
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.
Environmental challenges
– Terracycle Phillips needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Terracycle Phillips can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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.
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.