Stericycle (SRCL) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Stericycle (United States)

Based on various researches at Oak Spring University , Stericycle is operating in a macro-environment that has been destablized by – increasing commodity prices, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, geopolitical disruptions, supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, central banks are concerned over increasing inflation, etc

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Introduction to SWOT Analysis of Stericycle

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Stericycle can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Stericycle, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Stericycle 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 Stericycle can be done for the following purposes –
1. Strategic planning of Stericycle
2. Improving business portfolio management of Stericycle
3. Assessing feasibility of the new initiative in United States
4. Making a Waste Management Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Stericycle

Strengths of Stericycle | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Stericycle are -

Cross disciplinary teams

– Horizontal connected teams at the Stericycle 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.

Innovation driven organization

– Stericycle is one of the most innovative firm in Waste Management Services sector.

Sustainable margins compare to other players in Waste Management Services industry

– Stericycle has clearly differentiated products in the market place. This has enabled Stericycle to fetch slight price premium compare to the competitors in the Waste Management Services industry. The sustainable margins have also helped Stericycle to invest into research and development (R&D) and innovation.

Organizational Resilience of Stericycle

– The covid-19 pandemic has put organizational resilience at the centre of everthing Stericycle does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

High brand equity

– Stericycle has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Stericycle to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Analytics focus

– Stericycle 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 Waste Management Services industry. The technology infrastructure of United States is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.

Learning organization

- Stericycle 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 Stericycle is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Stericycle emphasize – knowledge, initiative, and innovation.

Superior customer experience

– The customer experience strategy of Stericycle in Waste Management Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

High switching costs

– The high switching costs that Stericycle 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.

Effective Research and Development (R&D)

– Stericycle has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Stericycle staying ahead in the Waste Management Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Diverse revenue streams

– Stericycle is present in almost all the verticals within the Waste Management Services industry. This has provided Stericycle 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.

Ability to lead change in Waste Management Services

– Stericycle is one of the leading players in the Waste Management Services industry in United States. Over the years it has not only transformed the business landscape in the Waste Management Services industry in United States but also across the existing markets. The ability to lead change has enabled Stericycle in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Weaknesses of Stericycle | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Stericycle are -

Employees’ less understanding of Stericycle strategy

– From the outside it seems that the employees of Stericycle 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.

Need for greater diversity

– Stericycle 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.

Ability to respond to the competition

– As the decision making is very deliberative at Stericycle, in the dynamic environment of Waste Management Services industry it has struggled to respond to the nimble upstart competition. Stericycle has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

High dependence on Stericycle ‘s star products

– The top 2 products and services of Stericycle still accounts for major business revenue. This dependence on star products in Waste Management Services industry has resulted into insufficient focus on developing new products, even though Stericycle has relatively successful track record of launching new products.

Increasing silos among functional specialists

– The organizational structure of Stericycle is dominated by functional specialists. It is not different from other players in the Waste Management Services industry, but Stericycle needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Stericycle to focus more on services in the Waste Management Services industry rather than just following the product oriented approach.

Interest costs

– Compare to the competition, Stericycle 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.

Aligning sales with marketing

– From the outside it seems that Stericycle needs to have more collaboration between its sales team and marketing team. Sales professionals in the Waste Management Services industry have deep experience in developing customer relationships. Marketing department at Stericycle can leverage the sales team experience to cultivate customer relationships as Stericycle is planning to shift buying processes online.

Low market penetration in new markets

– Outside its home market of United States, Stericycle needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

No frontier risks strategy

– From the 10K / annual statement of Stericycle, it seems that company is thinking out the frontier risks that can impact Waste Management Services industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.

Products dominated business model

– Even though Stericycle has some of the most successful models in the Waste Management Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Stericycle should strive to include more intangible value offerings along with its core products and services.

High cash cycle compare to competitors

Stericycle has a high cash cycle compare to other players in the Waste Management Services industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Stericycle Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Stericycle are -

Low interest rates

– Even though inflation is raising its head in most developed economies, Stericycle 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.

Leveraging digital technologies

– Stericycle 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.

Identify volunteer opportunities

– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Stericycle can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Stericycle can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Creating value in data economy

– The success of analytics program of Stericycle has opened avenues for new revenue streams for the organization in Waste Management Services industry. This can help Stericycle to build a more holistic ecosystem for Stericycle products in the Waste Management Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Building a culture of innovation

– managers at Stericycle 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 Waste Management Services industry.

Better consumer reach

– The expansion of the 5G network will help Stericycle to increase its market reach. Stericycle 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.

Buying journey improvements

– Stericycle can improve the customer journey of consumers in the Waste Management Services industry by using analytics and artificial intelligence. It 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.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Waste Management Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Stericycle 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. Stericycle 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 Waste Management Services industry, but it has also influenced the consumer preferences. Stericycle can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Stericycle 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 Stericycle to hire the very best people irrespective of their geographical location.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Stericycle is facing challenges because of the dominance of functional experts in the organization. Stericycle can utilize new technology in the field of Waste Management Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Loyalty marketing

– Stericycle 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.

Threats Stericycle External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Stericycle are -

High dependence on third party suppliers

– Stericycle 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.

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 Stericycle in the Waste Management Services sector and impact the bottomline of the organization.

Technology acceleration in Forth Industrial Revolution

– Stericycle has witnessed rapid integration of technology during Covid-19 in the Waste Management Services industry. As one of the leading players in the industry, Stericycle needs to keep up with the evolution of technology in the Waste Management Services 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.

Increasing wage structure of Stericycle

– 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 Stericycle.

Stagnating economy with rate increase

– Stericycle can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the Waste Management Services industry.

Environmental challenges

– Stericycle 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. Stericycle can take advantage of this fund but it will also bring new competitors in the Waste Management Services industry.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Waste Management Services industry are lowering. It can presents Stericycle with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Waste Management Services 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 Stericycle.

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 Stericycle business can come under increasing regulations regarding data privacy, data security, etc.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Stericycle may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Waste Management Services sector.

Shortening product life cycle

– it is one of the major threat that Stericycle is facing in Waste Management Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Consumer confidence and its impact on Stericycle 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 Waste Management Services industry and other sectors.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Stericycle 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 Stericycle prominent markets.

Weighted SWOT Analysis of Stericycle Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Stericycle 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 Stericycle 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 Stericycle 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 Stericycle 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 Stericycle needs to make to build a sustainable competitive advantage.

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