Waste Management Inc2

Waste Management IncStudent NameDate

Introduction of Waste Management Inc:Waste Management Inc (WM) started its operations in 1987 and has expanded its scope of services to residential and commercial sectors in North America. It is one of the major waste management firms, playing a central role in regulating the energy needs of its customers as well as maintaining the environmental protection standards. As a blend of both of these elements, the company offers a wide array of integrated environmental solutions which range from waste recycling to production of liquefied gas. The main focus of the company is the minimization of the wastage, while at the same time providing the natural and environment friendly energy sources to its customers in residential and non residential sectors. Currently there are 45,000 personnel employed in Waste Management Inc who are serving 20 million customers. As a leading company in North America the various waste disposal and recycling facilities are able to handle 8 million tons of disposed off items. The management has expansion plans for the next 7 years, indicating thus enhancing this ratio up to 20 million tons on an annual basis (About Us, 2013). The mission of the company is to ensure that the customers receive services that are more responsive, reliable and resourceful than any other company in our industryand prove it every day (Annual Report, 2011). The management has utilized its own company based resources as well as the strategic partnerships with other firms such as Linde Group and acquisition of Oakleaf Global Holdings to actualize the mission of the firm. Identification of the industry and the competitors:The company is operating in waste management industry, which comprises of various activities including landfill, recycling and sustainability practices. Waste Management Inc is facing competition from the rival companies. Its key competitors include Casella Waste Systems Inc, Republic Services Inc and Safety-Kleen Inc (Competitors, 2013). Other rival companies consist of Clean Harbours Environmental Services and Stericycle Inc. Casella Waste is engaged in providing the services of landfill, recycling and waste collection from the residential and commercial sectors in North America (What We Do, 2013). Another major firm operating in the waste management industry is Republic Services which is focusing on providing dumpster, recycling and management of household and commercial waste (Republic Services, 2012). Safety-Kleen is focusing on the recycling of waste emanated in the industrial sector in US, such as oil collection, compliance and Vac Services (Services, 2012). Potential profitability of the industry:Porters Five Forces ModelThreat of entryWaste management industry is a progressive industry, however the capital costs required to establish a set up to compete with the firms already operating in the market seems to be a difficult task. The new entrants also need to establish linkages within the industry to maintain a profitable position in the long run. Moreover, the issue of low economies of scale also creates a barrier for new firms intending to venture in the waste management industry. Considering this situation it can be stated that there is low threat of entrants, thus is has positive effect on profitability of Waste Management Inc.Rivalry among existing competitorsEven though it is a growing industry the existing companies engage in intense competition with each other. There are a few major privately held, public and semi government companies providing land-filling, recycling, waste collection and green energy services to the residential and commercial areas in US (Annual Report, 2011). The industry can therefore be viewed as possessing high level of rivalry. Based on this analysis it can be inferred that this force can have a negative effect on profitability. Pressure from Substitute productsIn waste management industry, there is no direct substitute available. Moreover, the process of waste management is a mandatory requirement for households and industrial units. The only substitute available to the customers is the low cost services offered by rival companies. Due to this reason, the pressure from substitute products can be seen as low, with a positive impact on profitability. Bargaining power of buyersSince there are few companies operating in the waste management industry, the buyers do not have much control over the price structure of the services. At the same time, the companies need to offer competitive price to the customers to retain adequate market share. Therefore it can be stated that the bargaining power of residential and commercial customers is moderate. The subsequent impact on company profitability is neutral. Bargaining power of suppliersThe major suppliers in the waste management industry are oil and petrol firms who fulfill the fuel needs of the vehicles of the waste management companies. The operations of waste collection and supply of waste from customers to the recycling or land-fill areas is based on the deployment of fleet of trucks. Due to this situation, the suppliers hold a great degree of bargaining power. On the other hand suppliers also need to maintain their contractual agreement with the large scale companies, thus it can be seen that the suppliers have moderate bargaining power. It further indicates that this force has a negative effect on company profitability. Based on the above analysis it can be inferred that the waste management industry has a moderate degree of profitability. Critical success factors:In order to retain a competitively strong position in the waste management industry, a company needs to possess certain elements which are deemed as critical success factors (CSFs). The notable CSFs in this context are the management of operating cost, formulation of effective partnership and adoption of advanced technology to manage the operations effectively. Companies that are able to manage the financial resources invested in the operations and attain a significant profitability can obtain long term growth in the industry. Similarly the formation of partnerships can result in combination of resources to achieve common goals which can help the organizations in establishing a stronger base. Furthermore, providing high quality services to the residential and commercial customers also constitutes a part of CSFs. To ensure that customers are retained with the company, the management needs to identify the distinctive needs of various segments of the target market and strive to fulfill those requirements with due diligence. Organizations which have integrated these critical success factors such as Waste Management, Casella Waste, and Republic Services can be deemed as winners in the industry. On the other hand Safety-Kleen is not able to capitalize on the residential community waste handling needs, thus it can be categorized as a loser from this perspective. PEST Analysis:Political/legal forces:The political/legal forces in the Waste management industry consist of the legal regulations at all levels of government as well as Environment Protection Agency (EPA). For instance the Resource Conservation and Recovery Act, National Environmental Policy Act, Clean Air Act, Clean Water Act Toxic Substances Control Act, Solid Waste Disposal Act refers to some of the examples of environment related legislative principles devised by US courts and government institutions. The tax laws also have an impact on the industry, as it influences the post tax deduction profitability. Landfill tax, excise tax, business income tax, sales tax employment taxes are some of the taxation regulations that the companies in the industry have to comply. The environmental friendly and recycled goods can be supplied to other regions of the world, thus involving the application of international trade laws devised by WTO, regional trade agreements and the related tariff or duty paid by the supplier. The industry is also affected by the laws pertaining to employee management such as Equal Employment Opportunity Act, Occupational Safety and Health Act, Fair Labor Standards Act, Employee Retirement Income Security Act, Labor-Management Reporting and Disclosure Act etc. In addition to the legal factor, the political outlook of US also holds implications for the industry players. The electoral campaigns in US involve the lobbying activities from waste handling organizations, such as WM Inc, Clean Harbors, and Republic Services. These companies lend support to a specific political candidate (in federal government) during electoral process, and the outcome of elections in favor of the firm can serve the companys vested interest. Economic forces:The economic outlook of the industry can be gauged through the variables of GDP, disposable personal income, unemployment and inflation. In year 2010, the estimated GDP of USA was $14,660 billion and the personal income was approximately 40,459 (The National Data Book, 2012a). The unemployment rate reported in 2010 was reported to be around 14,825 thousand (The National Data Book, 2012b). The inflation rate in US was reported to be approximately 1.7% by the end of 2012. Other economic factors include exchange rates, interest rate energy costs, stage of economic cycle and monetary policy. The exchange rates determine the investment a company will be required to make in international business expansion. Short term interest rate in 2012-2013 will be kept at a minimum to support the recovery of US economy, while in the long term the interest rate is likely to increase (Conerly, 2012). Energy price is dependent on the cost of fuel used for the generation of energy. As shown in table 2 in 2012 electricity cost for households had an increase of 1.3%, but by the end of 2014, it is expected to rise up to 2% (Electricity, 2013). The US economy is still recovering from the far reaching effects of the credit crunch and financial crisis, thus the country is in the recovery phase of economic cycle. The US monetary policy includes decisions related to use of maturity extension program (MEP), ratio of federal funds and mortgage-backed securities (MBS). These factors carry implications for the various industries and businesses (Speech, 2012). Social forces:The social trends can result in alterations in the demands of the customers, which affects the waste management industry. Increasing health consciousness among customers resulted in reinforcement of the notion of improving quality of life through proper waste disposal. These prevailing values also encourage businesses as customers of waste management firms to engage in socially responsible behavior by appropriately disposing off the waste and toxic substances. The consumers have a positive attitude towards businesses who adopt corporate social responsibility framework in their operations, thus illustration how societys expectations and consumers attitude can shape the behavior of corporations. The increasing population, life expectancy and child birth rates also expand the customer base that can be targeted by waste management industries. Moreover, the rising population also requires more effective means of handling the waste in households and industries. Other social factors include an increasing environmental awareness among the public and heightened intensity of restrictions on the emanation and means of disposal of industrial wastage. These factors can undoubtedly have implications for the firms operating in the waste management domain. Technical forces:Waste management industry is exposed to rapid technology based chang, scientific improvements and innovation as new versions of recycling equipment; waste disposal and energy conversion are launched. The integration of such technology is an organizational necessity as well as a means of maintaining competitive edge in the market. The waste to energy projects and plasma gasification are few illustrations of the technological advancements in this industry (Humes, 2012). The introduction of automation and efficient sorting of recyclable items can result in quick processing of solid waste. The companies in waste management industry focus on research and development to gain access to innovative technologies, however, the expenses in R&D require significant capital support. The new product development doesnt related to the waste management industry, however, the companies in this domain can include new services such as waste to energy conversion facilities for promoting the use of environment friendly energy sources. Internet has also facilitated the waste management companies in forming effective relations with the residential and industrial customers as the potential and current customers can access information about the firm through company website or social media pages. Strategy analysis:The strategy analysis of the company will be based on the evaluation of the corporate, business and functional level strategic course of action adopted by Waste Management Inc. Firm-level strategy of Waste Management IncThe firm level strategy or corporate level strategy of Waste Management Inc can be identified as focusing on growth and expansion of the company. The firm has been engaging in the acquisition of other business entities such as Oakleaf Global Holdings which was acquired in 2011 on the basis of a massive investment of $432 million. The inclusion of Oakleaf has strengthened the firm level strategy of expansion of the operations within US, as the acquired company had been providing recycling services to the customers. A more recent acquisition can be seen in the form of integration of Greenstar, LLC which required an investment of $170 million (Waste Management form 10-K, 2012). The financial stability of the company has supported the various acquisitions that have been conducted in the past few years by WM Inc. another example of acquisition as a growth strategy is evident from the step towards integrating an additional waste to energy unit through an acquisition of a facility in Virginia. Furthermore strategic formation of subsidiaries such as Wheelabrator has supported the company in expansion of the operations.Apart from the expansion in the local market across USA, the company has also emphasized its mission to provide the customers in the international market with recycling and waste to energy conversion services. For this purpose, joint venture collaborations have been formed with companies such as Shanghai Environment Group (SEG). The company also intends to adopt green technology thus facilitating its development into the new market areas as well. Business level strategy of Waste Management Inc:From the perspective of Porters generic strategies it can be stated that the company is following a focused differentiation strategy. This business level strategy of WM is based on the notion that pursuing the distinctive segmentation of target market can allow the company in retaining a loyal customer base. The strategic outcomes outlined by the company also emphasize the need to enhance the degree of loyalty among the clientele (Waste Management form 10-K, 2012). The residential and industrial customers are regarded as two distinctive segments having different needs. The company strives to fulfill the needs of both these groups accordingly.Miles and Snow have offered an alternative view to understand the business level strategy adopted by an organization. In case of Waste Management Inc, the business level strategy which is aligned with the framework of Miles and Snow is Prospector Strategy. Waste Management Inc not only focuses on strategic expansion in local and international market through acquisition and joint collaboration, but also indicates the need to fulfill the needs of the various market segments with due diligence. To further elaborate the implementation of prospector strategy, it can be seen that WM has adopted new green technologies, engaged in waste to energy projects and invested in using natural gas for its vehicles as an alternative fuel source. These activities reflect the focus on innovation, adoption to change and introduction of new ideas in the market (Waste Management form 10-K, 2012). Business level strategies of competitors:The business level strategies of competitors differ from one company to other. Casella Waste is focusing on providing the services to communities, residential units and industrial organizations thus illustrating the deployment of cost leadership strategy. Republic Services on the other hand is aiming to establish a stronger position in the market by using a differentiation strategy thus providing its customers with quality services for the waste disposal and waste management. Safety-Kleen is using focused strategy, by targeting the needs of the business entities in terms of waste disposal and maintenance of green and environment friendly outlook of their operating units. The business level strategy of Waste is similar to the prospector strategy adopted by Waste Management Inc. On the contrary; Republic Inc is pursuing the analyzer strategy as the management is focusing on providing services to the customers while maintaining cost effectiveness for the operational aspect of the firm. Lastly, Safety-Kleen is also following analyzer strategy as the firm modifies its strategic focus according the needs of its industrial target market. Marketing strategy of Waste Management Inc:The marketing strategy employed at WM uses a combination of the 4 Ps of marketing which are outlined as follows:Product/Services:The services offered by Waste Management Inc range from waste collection, landfill operations, waste to energy conversion, recycling and sustenance of green energy in the residential and commercial sectors primarily in US and Canada. The strategic partnership with SEG has further helped the company in growing beyond the US and Canadian regions. Price:The price structure of the services offered by the company varies from service to service. For instance within the domain of recycling, the nature of goods that need to be recycled determines the price charged for the process. Similarly, the price of the services is also influenced by the alterations in the Consumer Price Index (Waste Management form 10-K, 2012).Place:Waste Management Inc is mainly providing its services to the customers located in US and Canada. It is regarded as a leading waste management firm in North America. The operations of WM are run on the basis of a closely connected network of collection and transfer units. Moreover, the more than 100 recycling plants maintain steady flow of the conversion of disposed off solid waste into recycled content that can be utilized within industries and households. Promotion:The promotional activities at Waste Management Inc can be viewed as consisting of establishing linkages with the customer base and encouraging the industries to participate in the adoption of environment friendly practices. The sales and marketing personnel at Waste Management focus on analysis of the target market and communication with the potential customers who are likely to purchase the recycled content generated in the solid waste management facilities. In addition to this the use of awards are used as an incentive which promotes the integration of the principles of green energy in industrial segment. This promotional tactic facilitates the various businesses to avail the waste management services of WM. For instance, Sustainability Circle of Excellence Awards were held to acknowledge the efforts displayed by the companies in the implementation of environment friendly practices such as reuse of materials, purchase of recycled/recyclable and using recycle of solid waste instead of landfill (Press room, 2013). The company has also established in presence in the online arena by using the social networking websites such as Facebook, Twitter, LinkedIn and YouTube. Financial position and financial strategy of Waste Management Inc:The financial position and strategy of Waste Management Inc can be analyzed by conducting an analysis of the profitability ratio of the firm while offering insight into the profitability of the rival companies too. The analysis of financial strength of WM and two if of its leading competitors is provided in the appendix (refer to table 1) displaying the liquidity and profitability ratios for Waste Management, Casella Waste and Republic Services in 2012. The analysis shows that the company has high current (80%) as compared to Casella (76%) and Republic (73%). WM also has higher quick ratio and cash ratio. This implies that WM has a relatively stronger position as compared to Casella Waste and Republic Services. In case of profitability ratios, WM has lower Gross Margin ratio (35%) and operating margin ratio (14%) as compared to 38% and 16% GM and OM ratios of Republic Services. On the other hand, Casella has only a ratio of 31% and 2%. The financial analysis further shows that Waste Management Inc has the lowest profit margin as compared to its lead competitors. The management at WM is pursuing the financial strategy of acquiring long term loans to engage in the local and global expansion of the scope of waste handling services (Waste Management form 10-K, 2012). The major element utilized in obtaining the loan is senior notes and tax-exempt bonds.Production and purchasing strategy of Waste Management Inc:The company is concerned with the production of recycled goods which are in turn purchased by the manufacturers who rely on the use of recycled content in their products. The integration of Wheelabrator units is an integral part of the production of waste based energy. Waste Management Inc is also concerned with the production of energy from wastage, thus providing the energy to residential and commercial based sectors in the market. Its more than 100 Material Recovery Facilities support the firm in becoming the major provider of waste managing services. Furthermore, the company also purchases the recyclable content from its external stakeholders. The use of these production and purchasing strategies helps the company is maintaining a differentiated approach towards the various market segment it serves. The competitors such as Casella Waste and Republic Services also collect wastage from the households as well as industrial units, to recycle the solid waste and sale it to the third party. Strategies in functional areas at Waste Management Inc:Waste management Inc is able to maintain leverage in the market due to the hiring of highly capable workforce which understands the vision of the company and strives to implement it accordingly. The management considers the presence of skilled employees as one of the necessary factors in successful implementation of business and firm level strategies. The personnel are provided with opportunities to learn and grow with the company through multitude of training sessions which include in house sessions, training through outsourced consultants and seminars. The theme of training revolves around environment protection and the role personnel can play in leading this process. In 2009 the company has reported to provide training sessions to more than 35,000 employees operating at various levels of hierarchy within the company (Protection and Management, 2013). The management at WM is well aware of the usefulness of Information systems and information technology as a means of gaining a competitive edge over the rival companies. Based on this background, the company has utilized software solutions to handle its operations in various departments. Waste Management has formed collaboration with AEC Software, Inc to enable the logistics department to access the database about the potential suppliers that can be included in the vast pool of supply chain activities (Suppliers, 2013). WM has also integrated CYCLE and Dakota as software tools that help in maintaining smooth flow of internal and external operations. Apart from that the use of IT, telecommunication has also supported the company in delivery of high quality services. The management has also increased the capital investment in IT to maintain premium functional level of operations. WM uses intranet (WMVisor) to provide its employees with recent news about company related or environment based events (Protection and Management, 2013).SWOT Analysis:Strengths:One of the major strengths of Waste Management Inc is the sheer size of the company which allows it to manage the various operations within US. The 45,000 employees regulate the various segments of the company entailing the handling 20 million customers in residential, industrial and municipal segments. Furthermore, the firm is managing a network of 390 collection operations, 287 transfer stations, 271 landfill disposal sites, 17 waste-to-energy plants, 107 recycling facilities and 131 beneficial-use landfill gas projects (Annual Report, 2011). The financial capability of the company is an additional source of strength which is reflected through the operating revenues of $13,649 million in 2011. WM has established a reputable brand name on the basis of providing high quality and reliable services to the customer. Along with that the firm has been associated with the notion of environmental protection, thus a favorable brand image has emerged (Waste Management form 10-K, 2012). An example to illustrate the implementation of environment friendly processes in the company operations is the conversion of its trucks on natural gas rather than oil based energy. WM plans to ensure that 80% of its vehicles are run on natural gas thus reducing noise and air pollution (Rubinkam, 2012). The company also employs highly skilled and trained human resources to ensure that the customers receive high quality waste disposal and garbage management services. Weaknesses: WM has not been able to maintain adequate control on its accounting and auditing processes which has resulted in litigations in the past and monetary payment as a compensatory action. Recently the company has suffered from decreasing revenue in the collection business as the revenue declined to $ 65 million in 2012 (Waste Management form 10-K, 2012). Another weakness of the firm is its inability to incorporate ERP software for managing its business operations. The management wasnt able to align its businesses operations and IT infrastructure with the re3qusities of ERP. Thus, the inadequate planning resulted in loss of company resources. In addition to this, the legal issues such as the penalty of $2 million paid by the Wheelabrator subsidy of WM Inc indicate the weakness in the monitoring and implementation of environment friendly practices within the firms operations (Bloomberg Businessweek, 2013). Opportunities:There are investment opportunities in the waste management industry as the existing firms seek joint ventures with other companies. Another eminent opportunity in the industry is the integration of innovative technology such as automation, efficient waste to energy conversion, increased environment friendly recycling procedures etc. The implementation of environment protection policies by the government also serves as an opportunity as the industrial customers seek support from waste management companies to handle their toxic and non toxic industrial emanation. More stringent policies from the government propel the industrial segments to obtain services from the firms who can handle the industrial wastage. Moreover, the focus on green technology has further opened up the avenues for deployment of green technology in the corporations. The waste management industry has expanded on the global scale as well, thus the companies can obtain greater market share by expanding their operations into densely populated regions such as China, Korea. Furthermore, the regions that do not have adequate waste management handling companies also serve as an opportunity for global market entry such as developing countries across the globe. Threats:The increase in sales due to summer season can be viewed as an opportunity, but at the same time such seasonal cyclical influences have negative implications for waste management companies. The resultant changes in the ratio of revenues and profitability can become a source of threat for the players in the industry. The alterations in the rules and regulations imposed by the government and environment protection agencies can also become a source of threat for the waste management industry as the companies will have to modify their processes accordingly. The processes of waste management through recycling, land-fill operations and waste to energy conversion is required to adhere to the framework of regulations developed by the government. Failure to integrate these regulations can become a source of legal threats as well. Moreover, the adoption to changing requirements to comply with environment friendly business practice can create a threat of increasing operational cost for an organization. Economic changes in the market also threaten the revenue and profitability as the customers can alter their spending patterns. The residential and industrial customers may seek a low cost waste disposal service. Closely connected with the notion of market forces is the factor of threat of competitive rivalry. The various waste managing companies such as Waste Management Inc, Clean Harbors Environmental Services, Stericycle Inc, Casella Waste Systems and Republic Services strive to gain a competitive edge in the market, thus resulting in a threat of high competitive rivalry.Alternatives for Waste Management Inc:Strategic alternatives for Waste Management Inc:Waste Management Inc can pursue the following strategic alternatives which are related to firm level and business level strategy:Alternatives for Firm Level Strategies: Focus on joint ventures in USA and Canada instead of acquisitions as the investment needs are different in both initiatives. As a firm level strategy, it can also consider the expansion of its operations in European and Asian countries through acquisition of waste management resources in these regions. Alternatives for Business Level Strategies:The alternatives for business level strategy are: Increase the profit margin by following an overall low cost business strategy. Use a combination of focused low cost and focused differentiation strategy. Adopt Analyzer strategy.Pros and cons of the alternatives:The pros and cons of each alternative will be discussed as follows:Firm Level Strategies:Pros and Cons for Joint Venture:In case if the firm decides to use joint ventures for the expansion of its operations within US and Canada, the major benefit it can gain is accessing the facilities, resources and market base of its partner firm. At the same time the limitation evident in the adoption of joint ventures is that the company has limited autonomy in decision making. Furthermore, the points of difference between the partner firms with management can also have negative implications. The use of joint ventures also carries the risk of lack of alignment between the mission, values, capabilities of the company and its partner firms. Pros and Cons of International ExpansionThe expansion of company operations in European and Asian countries can hold the benefit if reaching a larger market. The use of green energy and environmental protection are themes which are gradually being implemented in various regions of the world. Waste Management can consider positioning itself as a global firm rather than limiting its operations to US and Canada mainly. The limitation in this context is that venturing into external market is likely to expose the company to various macro and micro environment factors which will differ from one country to another. Therefore it will require a great deal of proactive planning. In addition to this, the profitability potential of each country will also be different, thus transforming the international expansion as a stable source of revenues will be time and resource consuming process. Business Level Strategies:Pros and Cons of Low Cost Business Strategy:The recommendation of cost leadership as a business strategy can be source of benefit for Waste Management as the customers are likely to respond positively to the low cost of waste handling services. Recession has altered the consumer spending habits, and even though waste disposal is a mandatory requirement of households and industries, the customers can find low cost waste removal an appealing offer thus increasing the sales of the company. The disadvantage of this approach is that it will have negative implications for the operating cost, as the low prices will result in lower profit margin. Pros and Cons of focused low cost and differentiation Business Strategy:In the differentiation business strategy WM can offer distinctively prices service packages to residential and industrial segments. The quality of service will be better than the rival companies while at the same time the price offered to the customers will be affordable, thus the company can have the benefit of gaining a competitive edge over the rivals. Moreover, the increased market share is another positive outcome of this approach. The challenge evident in this approach is the effect on profit margin and operating cost of the firm. Pros and Cons of Analyzer Business Strategy:The adoption of analyzer business strategy can be advantageous as Waste Management can retain its operating expense under control. However, the intricate balance between current and new markets can be a difficult task. WM may face issues in maintaining similar levels of profitability in the new ventures as compared to the existing ones. Recommended alternatives:Out of the list of recommended actions and their respective pros and cons presented above the company is recommended to adopt the firm level strategy of formation of joint ventures to further expand its scope of operations. Given the financial position of the company, massive investment in the acquisition of recycling units, waste to energy conversion facilities and Material Recover Centers may not be a feasible course of action at present. Thus the use of collaborative relationship with other similar companies appears to be a more viable alternative.As far as business level strategies are concerned, the company can adopt focused low cost and focused differentiation strategies. Despite the limitation of low cost differentiation on profit margin and cost of operations, the company can gain further leverage in the industrial sector. At present, Waste Management is playing a central role in helping the corporations to maintain environment friendly practices. The inclusion of differentiated packages for households, SMEs and large scale businesses can be a source of long term benefit for the company. Waste Management emphasizes providing quality experience to the customers to obtain loyal clientele. The use of focused differentiated strategy can help in understanding the different needs of target market and fulfilling those needs as effectively as possible Implementation of Alternatives:The chosen alternative can be implemented within US and Canada as these regions are the prime focus of Waste Management Inc. The company can engage in the marketing and promotion of its new price structure and service offerings through the use of press releases. The industrial customers are likely to keep track of the press release of the service providers in waste management industry. Secondly, the use of social media is also an attractive option as the customers in the residential and industrial segments obtain recent updates and information about new service offerings through social networking websites. The company videos can also be displayed on YouTube to illustrate the implementation of the notion of green energy by company. The implementation of this alternative strategy will also entail the changes in the operating cost and profit margin; however the launch of differentiated service packages for residential and commercial sector can help in the retention of the financial strength of the company. Such an approach can also help WM in avoiding the pitfall of implementation of a low cost strategy in isolation which is likely to result in financial weakness. The use of differentiation may require restructuring of operations at the functional level, but the return on this strategic implementation can allow WM to gain a stronger position in the market. Controlling the Alternatives:In order to ensure that the implementation process is conducted with effectiveness, the management will conduct analysis of the degree of success of the implementation of the strategy from a financial and nonfinancial perspective. From a financial perspective, the use of sales ratio, profitability, annual revenues can allow the management to analyze the outcome of the alternatives. The outcome can be further controlled by analyzing its capability of facilitating the firm to meet its short and long term objectives. Moreover, the non financial perspective can also serve as an integral part of controlling. Management can obtain feedback from internal stakeholders (employees) and external stakeholders (customers) to gauge the degree of attractiveness of the service packages offered by the company. Internal surveys can be conducted from the employees by using the company intranet. The employees can provide their opinion about the implementation issues and successful attainment of the objectives. Moreover, the customers can be requested to participate in the survey by displaying the option of providing feedback on company website and social networking websites. In addition to this, the customers can be sent the feedback/comment cards via postal mail, which can be filled in and sent back to the company. Risk management and Future outlook of Waste Management Inc:The company needs to be able to identify the risk and pitfalls in the adoption of a focused cost leadership and differentiation strategy. Moreover, the threats present in the external environment also add up to the risk faced by WM. Despite these risks and threats, Waste Management Inc is likely to grow and expand in the future. The need of implementation of green energy, increased emphasis on preserving the environment and strict regulations of waste disposal and recycling from the government and other pressure groups indicates massive growth opportunities for the firms operating in waste management industry. WM has the advantage of possessing vast number of waste management facilities and financial capability thus it has a positive outlook for the future.

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AppendixTable 1Financial Strength of Waste Management Inc and two major competitors in 2012Casella WasteRepublic ServiceWaste Management

Liquidity Ratios

Current Ratio76%73%80%

Quick Ratio72%73%74%

Cash Ratio 5%4%6%

Profitability Ratios

Gross Margin31%38%35%

Operating Margin2%16%14%

Profit Margin16%7%6%

Table 2: US Residential Electricity Price:

Table 3: SWOT Analysis:

Strengths: Size of company Large number of employees Vast number of collection operations, transfer units landfill sites etc Financial capability Brand name and image Vehicle conversion on natural gas Skilled and trained employees High quality CRM

Weaknesses: Accounting issues ERP implementation failure Legal problems Lack of environment friendly practice in international operations at subsidies

Opportunities: Firms seeking joint venture/partnership Development and integration of innovative technology Implementation of environment friendly policies by industries Focus on green technology and green energy Global expansion

Threats: Seasonal nature of industry Changes in revenues and profitability Government rules and regulations Threat of litigations and penalty Economic changes Competitive rivalry