TerraCycle Inc. Full Qualitative Answers

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Business Administration
Business Administration 2257
Ian Dunn

TerraCycle Inc. Role: Betsy Cotton, CFO of TerraCycle Inc. Decision: whether or not to pursue a product line expansion, with 2 new product formulae:African violet and orchid • Develop a promotional plan for TerraCycle’s products • Assess the need for financing (type, availability, amount) Goals & objectives: • Reach economies of sacle • Aiding the environment o Ultimate eco-capitalist corporation o Managing cash flow for future sustainability o Effective promotions o Improve profitability Industry Size-up • Trend of focusing more on the environment and human impact on it o Creates greater demand for TerraCycle’s products and implies greater appeal to the end consumer to be purchasing fertilizer that is naturally produced with organic ingredients • Eco-capitalist movement to be exploited as our competitive advantage since none of the competitors have done so • Large industry with a lot of product diversity o Potential to diversify our product line and capitalize on individual needs Competitive Analysis Pros Cons Scott’s Miracle Gro is the #1 product in Miracle-Gro is not all-natural or the industry environmentally friendly Brand loyalty Scott’s is a large, multi-national corporation Spectrum Variety of product lines Most product lines are not Garden Safe line is very similar environmentally friendly to TerraCycle’s products Garden Safe line is not well Large size, multiple industries known Manufactures Rayovac batteries DIY Easy to do Process takes a long time Composters share an interest in Compost soil does nto require helping the environment fertilizers Implications • Competitors’resources have reached economies of scale and allow them to compete on price and mass promotion • Loyalty may make it difficult for consumers to switch to new products • New products place us in direct competition with Spectrum • No competitors are truly eco-capitalists Consumer Analysis Who are our customers? • Large retailers (Home Depot & Wal-mart) What do we know about them? • Have all the negotiating power • Take a long time to pay • Make large orders • Drive prices down Implications • Due to our reliance on them, need to keep them happy and meet their demands • May fit with push strategy • Long age ofA/R will further strain cash flow • May strain capacity with large orders and tight time frame • Need to minimize costs to be able to offer low prices Corporate Capabilities • Founded by two Princeton students as a result of success from a business plan competition o Possibly implies that they don’t necessarily have the experience to manage a new venture well with no industry or working experience • All Purpose Plant Food is made using an environmentally friendly production process which helps eliminate waste o TerraCycle has a unique production process which is hard to be replicated by competitors and allows us to have a competitive advantage in product quality o In line with social trend of having a greater focus on the environment, which makes our product more appealing to the general public •
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