How Waste Management Inc Has Succeeded Where Others Have Failed Term Paper

Excerpt from Term Paper :

External Analysis

General Environmental Analysis

Demographic Segment

Economic Segment

Political/Legal Segment

Socio-Cultural Segment

Technological Segment

Global Segment

Summary of General Environment Analysis

Driving Forces

Industry Analysis

Description of the Industry

Industry Dominant Economic Features

Market Size

Market Growth Rate

Industry Trends

Five Forces Analysis

Threat of New Entrants

Power of Suppliers

Power of Buyers

Power of Suppliers

Intensity of rivalry

Industry Competitors

Rivals Anticipated Strategic Moves

Summary of Five Forces Analysis

Industry Key Success Factors

Internal Analysis

Organizational Analysis

Corporate Mission

Products and Services


Organizational Culture



Summary of Organizational Analysis

Analysis of Firm Resources

Tangible Resources

Intangible Resources

Summary of Firm's Resources

4.3. Capabilities

Value Chain Analysis

4.3.2. Core Competencies and Sustainable Advantages

4.3.3. Summary of Firm's capabilities

4.4. Financial Analysis

4.4.1. Valuation Analysis

4.4.2. Growth Analysis

4.4.3. Profitability Analysis

4.4.4. Financial Strength Analysis

4.4.5 Management Efficiency Analysis

4.4.6. Summary of Financial Analysis

5.0. Strategic Issues Analysis

5.1. Critical Challenges...

5.2. Resources and Capabilities...

5.3. Strengths or Weaknesses Analysis...

5.4. Opportunities or Threats Analysis

6.0 Current Strategic Issues Facing Waste Management, Inc.

7.0 Two Major Challenges Facing Waste Management, Inc. And Corresponding Internal Capabilities



Executive Summary

Houston-based Waste Management, Inc. is the largest waste management service in the United States with an estimated $12.3 billion-a-year in revenues.


Company History

Founded in 1968 and incorporated in 1987, Waste Management, Inc. (hereinafter alternatively "Waste Management" or "the company") is currently the largest municipal waste disposal service in North America (Business summary, 2014). The company provides disposal services to more than 20 million customers in its North American market as well as Puerto Rico (Business summary, 2014). The company currently has around 42,700 full-time employees (Business summary, 2014). As part of the company's long-term strategy for growth, it states that it is "committed to developing new waste solutions that can help communities and organizations achieve their green goals, including zero waste" (Company profile, 2014, para. 2).

In addition, the company also provides renewable energy and currently produces more than twice the amount of renewable electricity than the entire solar-powered industry in the United States (Company profile, 2014). According to the company's profile, "One of the ways we do this is by recovering the naturally occurring gas inside landfills to generate electricity, called landfill-gas-to-energy. By the end of 2012, we operated over 138 beneficial-use landfill-gas projects, producing enough energy to power nearly 500,000 homes" (Company profile, 2014, para. 3).

At present, Waste Management projects an increase in capacity to process more than 20 million tons of waste annually by 2020, a significant increase from the current 12 million tons-plus processed in 2012 (Company profile, 2014). In this regard, the company reports that, "Part of that will come from expanding on proven technology to make recycling easier for consumers. Another part will be investing in future technologies, like converting organic waste from the materials stream to make high-end compost for local growers" (Company profile, 2014, para. 3).



Waste Management, Inc. provides waste management services to residential, commercial, certain industrial, and municipal customers in North America and Puerto Rico (Business summary, 2014). The company also provides waste collection, transfer, recycling and resource recovery, and disposal services (Business summary, 2014). In addition, Waste Management owns, develops, and operates waste-to-energy and landfill gas-to-energy facilities in the United States (Business summary, 2014). According to the company's business summary, Waste Management's "collection services include picking up and transporting waste and recyclable materials from generated area to a transfer station, material recovery facility, or disposal site; and recycling operations comprise materials processing, plastics materials recycling, and commodities recycling services" (Business summary, 2014, para. 4).

Furthermore, Waste Management also offers recycling brokerage services comprised of:

1. Managing the marketing of recyclable materials for third parties;

2. Electronic recycling services (e.g., collection, sorting, and disassembling of discarded computers, communications equipment, and other electronic equipment); and,

3. Sustainability services to businesses and organizations (including in-plant services that provide full-service waste management solutions and consulting services at customers' facilities) (Business summary, 2014, para. 5).

In addition, Waste Management is actively involved in the following activities:

1. The development, operation, and promotion of landfill gas projects;

2. Rental portable restroom facilities to municipalities and commercial customers under the Port-o-Let name;

3. The provision of street and parking lot sweeping services; and,

4. The acquisition and development of oil and gas producing properties (Business summary, 2014, para. 5).

The company also offers (a) medical waste disposal services; (b) portable self-storage services; and (c) fluorescent lamp recycling services (Business summary, 2014, para. 5). Formerly known as USA Waste Services, Inc., the company changed its name to Waste Management, Inc. In 1998 and is headquartered in Houston (Business summary, 2014).


Purpose of this study

The purpose of this study was to examine the internal strengths and weaknesses of the company as well as the external operating environment of Waste Management, Inc. And its competitors.


External Analysis

The external environment in which the company competes is characterized by increasing amounts of e-waste as well as efforts to divert as much recyclable material from the municipal waste stream as possible. In addition, disposable income for the municipal solid waste industry relates to the type of disposal methods that are employed. Municipal solid waste is either landfilled or recycled, including processes generate energy from these resources (Highfill & Mcasey, 2004). Recycling is regarded as a backstop waste disposal technology that costs more per unit than landfilling (Highfill & Mcasey, 2004). According to Highfill and Mcasey (2004), "Demand for waste disposal is linear and the measure of welfare is consumer surplus (less costs)" (p. 124).

Municipalities or regional cooperatives of municipalities and/or communities that enjoy sufficiently large landfill capacity can accept imports of waste without the need for recycling or other diversions efficiently (Highfill & Mcasey, 2004). In this regard, Highfill and Mcasey emphasize that, "A municipality with a sufficiently large landfill to accommodate both its own demand for landfill space and the demand for landfill space from the exporter would not exhaust in autarky, and has space that would have been unused if it had not been used to dispose of the exporter's waste" (p. 124).

Conversely, municipalities or regional cooperatives that lack sufficient landfilling space are faced with the need to divert a percentage of waste, thereby increasing costs (Highfill & Mcasey, 2004). Therefore, there is a definite potential for a growing preference for recycling among many American households in the future which could have a dramatic impact on the amount of municipal solid waste that enters the waste stream in the first place. In this regard, Folz reports that, "While the actual potential for diversion depends upon the composition of a locality's waste stream and the market for various materials, one estimate suggests that over 80% of the typical municipal solid waste stream technically can be recycled or composted" (2008, p. 301).

3.1. General Environmental Analysis

3.1.1. Demographic Segment. Currently, Waste Management, Inc. provides residential, industrial, commercial and municipal waste management services. The company also partners with various municipalities to improve their recycling regimens and lengthen the useful lifespan of landfills (Bloom, 2004).

3.1.2. Economic Segment. Demand for waste management services is resistant to downturns in the national economy (Alter, 2009).

3.1.3. Political/Legal Segment. Beginning the early 1990s, the federal government began implementing more stringent regulatory guidance concerning conventional solid waste disposal methods that increased the costs of doing business between five- and ten-fold (Tiller & Jakus, 2005). Furthermore, beginning in the early 1990s, a majority of the states had enacted various recycling laws, recycling or diversion regimens, or goals for waste reduction; in addition, a growing number of states implemented comprehensive waste management legislation that mandated long-term planning initiatives (Tiller & Jakus, 2005).

As municipal solid waste management has become more complex and costly, increasing numbers of communities across the country have implemented new strategies to satisfy growing demand, including regional cooperative efforts that extend to multiple counties or communities (Tiller & Jakus, 2005). According to Tiller and Jakus, "Cooperation is a process whereby neighboring cities, counties, or other governmental entities pool resources to address local challenges, taking advantage of the potential economies of scale associated with many aspects of municipal solid waste management" (2005, p. 223). In addition, a number of states have created solid waste regions that include incentives as part of a comprehensive municipal solid waste management system (Tiller & Jakus, 2005).

In addition, the disposal of municipal solid waste on an interstate basis has become an increasingly popular alternative for many American communities in satisfying the growing demand for municipal solid waste disposal capacity (Podolsky & Spiegel, 1999). According to Podolsky and Spiegel, "In general, the courts have supported a national market in municipal solid waste disposal by declaring unconstitutional legislative or regulatory approaches that inhibit interstate disposal" (1999, p. 250). Likewise, Highfill and Mcasey (2004) also report that, "While municipalities frequently resist imports, the interpretations of the Interstate Commerce Clause require that landfills accept waste regardless of…

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