MGMT-6050 Assignment 2: TerraCycle Case Study - Sustainable Growth

This case study analyzes the challenges faced by TerraCycle, a company focused on creating consumer products from waste materials. The assignment requires an examination of the company's strategic decisions, particularly regarding manufacturing and global expansion. The report explores the potential benefits and risks of shifting production to China, considering factors such as labor costs, market opportunities, and political and ethical considerations. The analysis also incorporates relevant concepts from the course, such as the triple bottom line and ethical business practices, to evaluate the best course of action for TerraCycle's CEO, Tom Szaky, to ensure sustainable growth. The report also considers the importance of government relations and social media promotion for business development and explores how to balance profit with social and environmental responsibilities.

RUNNING HEAD: TERRACYCLE CASE STUDY
Title: Sustainable growth of Terra Cycle
Name of Student:
Name of Organization:
Author Note:

1TERRACYCLE CASE STUDY
The present case study is based on the current managerial and strategic problem faced by the
TerraCycle organization, that needs to be solved to clear the backlog and allow progression
within the organization and so that the company can maintain a competitive position. In order to
analyze the course of action that is most suitable for the organization, it is essentially to scrutiny
the environmental force that directly affects the functioning of the organization.( Li,2014)
The most crucial point in the working of the orgnisation that it works with the raw
materials that is always available. While this is an added advantage for the company, this is also
posing a threat to the company as there is always a threat of new entrants and the threat for
competition in the market.
However, in recent times the company has encountered various problematic situations
starting from the delaying in the delivery of products to the various threats of new and potential
competitors like Wal-Mart and other organizations. The company, though is going lightly is
under sustenance pressure because of their inability to get higher volumes that led to a flat sales
report. Moreover, the company aimed at procuring a large number of waste materials to produce
fun products that are generally liked by the customers. The company is in dire need to increase
the volume but reduce the cost of production in order to make a suitable profit. (Szaky, 2013).
Szaky, the owner and the manager of the company discussed and thought about the
shifting of some of the production to China. This however, is a better course of action, the reason
for that can be analysed after the close examination of the macro environmental factor of the
industry in there.

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1. The man power in China is quite high which makes it easy for any industry to get a
labour at the lower prices. The company also needs to analyse the and intervene the
business surrounding in China.
2. China is place where there are a lot of commercial restrictions. Thus, the managerial head
of the company must discuss thoroughly wit the governmental body concerned and make
suitable law and order for the business policies.
3. It is also to be taken into account that the growth in the taxation policy of the business
will also result in the increase of expenses in the business. The most suitable step that can
be taken in this respect is the passing of a small portion of this increase on to the
consumers in more expensive rate. This will influence the core line of the business.
4. The company can use the governmental assistance both in china and to the hometown
country for grant purposes with the vision of growing the business.
5. Since China is a politically instable area, yet good for industry because of the labor
market and the access to the outer world, the company can impose task and insuarance to
lessen the extent of risk.
6. The company can also take into account the social media promotion for promoting their
business.
Analyzing the case in detail, it is found that the best that the managerial team of the
company can do is to shift some of the goods and waste to china. Though the cost of
transportation could be high and there will be risk of political takeover, the benefits of the
shifting is higher. The first benefit is the social advantage mainly. People of China are
creative and fun loving. The fun products produced by them will have ahigher demand.
Moreover, the employment rate in China is quite high. This ensures that the company will

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have a good market there (Yang, 2005). Another most significant benefit of the company
that it will get is the cheap labor market. This will help them in meeting the vision of the
company of increasing the volume and decreasing the expense in the production.
Creating a diplomatic relation with the government will make the company understand
how much the company can benefit in the business. Since China is a country that believes
in Communism, the company needs to know how much revenue it has to pay to the
government (Montinola, Qian, & Weingast, 1995). This will determine the extent of
benefit in the market. Moreover, a Global or an international presence is a matter of
prestige and profit for any company. It will have the benefit of creating rapport with
various other stakeholders and a good customer relationship. This will effectively help
the country to sustain and grow their business.

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Reference list:
Li, Y. (2014, August). Business model innovation of social entrepreneurship firm: A case study
of TerraCycle. In 2014 International Conference on Management Science & Engineering
21th Annual Conference Proceedings (pp. 507-514). IEEE.
Montinola, G., Qian, Y., & Weingast, B. R. (1995). Federalism, Chinese style: the political basis
for economic success in China. World politics, 48(1), 50-81.
Szaky, T. (2013). Revolution in a Bottle: How Terracycle Is Eliminating the Idea of Waste.
Penguin.
Yang, G. (2005). Environmental NGOs and institutional dynamics in China. The China
Quarterly, 181, 46-66.

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