Waste Management Inc

Student Name
Date

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 Model
Threat of entry

Waste 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 competitors

Even 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 products

In 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 buyers

Since 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 suppliers

The 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 mortgagebacked 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 Inc

The 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 Expansion

The 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.

References
About Us (2013). Waste Management Inc. Retrieved on February 19, 2013 from
http://www.wm.com/about/index.jsp
Annual Report (2011). Waste Management Inc. Retrieved on February 19, 2013 from
http://investors.wm.com/phoenix.zhtml?c=119743&p=irol-reportsannual
Bloomberg Businessweek (2013). Wheelabrator Technologies, Inc. Agrees to Pay $7.5 Million to
Settle a State Lawsuit. Retrieved on February 28, 2013 from
http://investing.businessweek.com/research/stocks/private/snapshot.asp?
privcapId=314432
Census Briefs (2011). Population Distribution and Change: 2000 to 2010. U.S Census Bureau.
Retrieve on February 20, 2013 from
http://www.census.gov/prod/cen2010/briefs/c2010br-01.pdf
Competitors, (2013). Waste Management, Inc. Retrieved on February 19, 2013 from Yahoo!
Finance. http://finance.yahoo.com/q/co?s=WM+Competitors
Conerly, B. (2012). Interest Rate Forecast 2012-2013. Forbes. Retrieved on February 27, 2013
from http://www.forbes.com/sites/billconerly/2012/05/02/interest-rate-forecast-20122013/
Electricity (2013). Short-term energy outlook. US Energy Information Administration. Retrieved
on February 27, 2013 from http://www.eia.gov/forecasts/steo/report/electricity.cfm
Humes, E. (2012). Grappling With a Garbage Glut. The Wall Street Journal. Retrieved on
February 19, 2013 from
http://online.wsj.com/article/SB10001424052702304444604577337702024537204.html
Press room, (2013). Waste Management Awards Companies for Sustainable Construction. Waste
Management, Inc. Retrieved on February 21, 2013 from
http://www.wm.com/about/press-room/2013/20130219_circle_of_excellence_award.jsp
Protection and Management (2013). Waste Management, Inc. Retrieved on February 21, 2013
from http://www.wm.com/sustainability/protection-and-management.jsp
Republic Services (2012). Republic Services, Inc. Retrieved on February 21, 2013 from
http://www.republicservices.com/Corporate/home.aspx\
Rubinkam, M. (2012). Natural gas drillers target US truck, bus market. BusinessWeek. Retrieved
on February 21, 2013 from http://www.businessweek.com/ap/2012-11-25/natural-gasdrillers-target-us-truck-bus-market
Services (2012). Safety-Kleen Systems, Inc. Retrieved on February 21, 2013 from
http://www.safety-kleen.com/services/Pages/default.aspx

Speech (2012). U.S. Monetary Policy and International Implications. Board of Governors of the
Federal Reserve System.
http://www.federalreserve.gov/newsevents/speech/bernanke20121014a.htm
Statistical Abstract of the United States (2012). U.S. Census Bureau. Retrieved on February 20,
2013 from http://www.census.gov/compendia/statab/2012/tables/12s0932.pdf
Suppliers (2013). Waste Management, Inc. Retrieved on February 21, 2013 from
http://www.wm.com/about/suppliers/index.jsp
The National Data Book (2012a). Income, Expenditures, Poverty, & Wealth: Gross Domestic
Product (GDP). U.S. Census Bureau. Retrieved on February 19, 2013 from
http://www.census.gov/compendia/statab/cats/income_expenditures_poverty_wealth/gros
s_domestic_product_gdp.html
The National Data Book (2012b). Labor Force, Employment, & Earnings: Unemployed Persons.
U.S. Census Bureau. Retrieved on February 19, 2013 from
http://www.census.gov/compendia/statab/cats/labor_force_employment_earnings/unempl
oyed_persons.html
Waste Management form 10-K, (2012). Waste Management, Inc. Retrieved on February 20, 2013
from http://investors.wm.com/phoenix.zhtml?c=119743&p=irol-sec
What We Do. (2013). Casella Waste systems Inc. Retrieved on February 19, 2013 from
http://www.casella.com/what-we-do

Appendix
Table 1
Financial Strength of Waste Management Inc and two major competitors in 2012
Casella Waste

Current Ratio
Quick Ratio
Cash Ratio

76%
72%
5%

Gross Margin
Operating
Margin
Profit Margin

31%
2%
16%

Republic Service

Liquidity Ratios
73%
73%
4%
Profitability Ratios
38%
16%
7%

Table 2: US Residential Electricity Price:

Waste
Management
80%
74%
6%
35%
14%
6%

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