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Growing City

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Submitted By zimm9290
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Table of Contents
Executive Summary…........................................................................................................ 3
Introduction..............…....................................................................................................... 4
Analysis.............................................................................................................................. 4
Alternative Solutions…...................................................................................................... 6
Recommendations and Implementation Plan .................................................................... 8
Contingency …………………………………………………………………………….. 10

Executive Summary
Growing City is in the midst of expanding their organic recycling business in Canada. The major issues they face is related to the complexity of their external environment. In relation to the industry size, low barriers to entry, and political regulation. In recent years there has been social and political trends are pulled towards environmental campaigns Growing City is one of many companies that will see the potential profit in this industry. Growing City needs to choose a strategy that allows them to differentiate their services from existing and potential competitors, but most importantly they must be the first to capture the market share. They also must increase efficiency in the operations of the business to keep costs low.
The best course of action for Growing City is to develop a presentation geared towards municipalities that have already or are in the process of developing waste management strategies, as well as encouraging others to put one in place. They should target municipalities in the provinces of Ontario, British Columbia, Alberta and Quebec first. This is due to the attractiveness of the organic corporate composting market in each of these areas. Growing City is already established in each of these provinces making them an easy choice for the municipalities.
If Growing City can be the first-movers in the market and establish themselves quickly than it will enable them to capture a large part of this market. Organic composting is a growing trend in today’s social environment, which puts Growing City at a competitive advantage. With contracts in place between Growing City and Canadian metropolitan cities the future of the company will be secure and profitable.

Introduction
The scope of this report specifically targets the Canadian organic recycling industry. Growing City is in the midst of expanding their organic recycling business in Canada. This process has presented the company with three major problems: First, the compost industry is large and comes with low barriers to entry, which increases the urgency for Growing City to capture this market. Second, this business requires high efficiency in operations in order to control transportation costs. The third issue is that Canadian municipalities already dominate the provision of similar services within the country. In an industry with complex but stable dimensions - Growing City is faced with relatively high environmental uncertainty. In order to adapt to this, the company will need a high level of internal planning, this will help them determine how well they will be able to cope with environmental pressures and succeed in this industry.
Analysis
The Canadian organic recycling industry is relatively large in size. As a result, there are low barriers to entry enabling competitors to quickly enter the marketplace. As social and political trends are pulled towards environmental campaigns Growing City is one of many companies that will see the potential profit in this industry. Waste Management World states that 32 million tonnes of municipal solid waste are produced in Canada per year, that’s 0.971 tonnes per capita. They also make the assumption that compost is worth $165.76 per tonne. This means that composting in Canada is potentially a $3.68 billion dollar industry (Exhibit 1). However, Growing City is currently capturing only 0.13% of this market which illustrates that there is huge growth potential (Exhibit 2).
The efficiency in day-to-day operations is another challenge Growing City faces. Thomas Hellmann, a professor at UBC’s Sauder School of Business states in an article in the Financial Post “My biggest concern is on the cost side of the business. All of the business plans I’ve seen in this area had giant transportation costs. As fuel costs increase, this will dip into profits. It will be a thin margin.” A high cost associated with transportation is a key element in their external environment that Growing City needs to take into consideration within their business plan. This can be done through the implementation of boundary spanning roles: which would enable Growing City to quickly adjust to changes, which in turn would increase the efficiency of operations (e.g. introduce liaison roles to open communication between drivers and office). Achieving this efficiency is essential to maximizing the bottom line of the company, and by the same token could facilitate their long-term goal of expansion. The challenge of high transportation costs may work in Growing City’s favour if they are able to achieve efficiency, as it will prevent the municipal governments from the need to outsource their transportation to other companies.
Many provincial governments have already mandated or are in the process of mandating legislations pertaining to sustainable waste management throughout Canada. For example, in 2010 Vancouver (Growing City’s Headquarters) passed the Integrated Solid Waste Management (ISWM) plan in which one particular point pertains to Growing City's Organic recycling Business under 2.6.2 (e) "Ban all compostable organics allowed in residential green bins from disposal to landfills and all forms of waste-to-energy, except anaerobic digestion by 2015". This makes it mandatory for organics to be separate from solid waste upon pickup. Many businesses pay for garbage removal privately and may look for alternatives (i.e. Growing City) to adjust to this new legislation. In Nova Scotia, the first province to pass a legislation such as this the Nova Scotia Environment Compost Maturity Study concluded that: “Factors impacting development include the vast distances and low population densities requiring vehicles to travel considerable distances to collect organic waste. Also, the wide-open spaces in much of the country leave plenty of space for landfill, removing the financial and environmental incentives that have pushed some parts of the world to compost more.” This is where the environmental domain and how Growing City approaches it will be critical to the success of the company. If the company is able to positively influence the legislation in their locations it will result in the growth of their market of composting services for businesses. On the other hand, if the municipalities do not support Growing City’s attempt to take care of their composting legislation, it could result in the failure of the entire business model for that particular location.
The solution that Growing City chooses must meet the following criteria: it must grow the market as well as the company’s market share. It must be financially feasible and expand nationally. This solution must also keep in mind the business’ core values and a commitment to the environment as well as giving back to the community.
Alternative Solutions 1. An option for Growing City’s is to Franchise. Franchising would allow Growing City to further establish their brand and customer base. It will also help maintain consistent growth nationally without the threat of a lack of resources. This alternative would have major positive effects on the supply chain as it would help Growing City build a larger distribution network based on economies of scale. 2. In order for Growing City to facilitate their integration into municipalities they could develop a presentation which they can tailor to each city with the intention of pitching their subcontracting opportunities. Planning is a great way to approach a complex and stable business environment. The presentation should be geared towards municipalities that have already/ are in the process of developing waste management strategies, as well as encouraging others to put one in place. This presentation should incorporate what Growing City does, the goals they want to achieve, and how they will achieve those goals. If they have an approach that they can consistently use across various cities it will help them adjust more effectively to their business environment. 3. Partner with other companies that would like to subcontract the organic composting side of their business. Since the largest cost to Growing City’s operations is transportation the best solution would be to outsource their transportation to another waste removal company such as Waste Management. As a result, this would allow Growing City to focus more on the main part of their business: organic recycling. The latter would also simplify the environment Growing City is faced with, and therefore lower uncertainty. If they were to do this it would help them gain a competitive advantage in their composting process which in turn will prevent the municipalities from taking over the compost removal from offices.
Recommendations and Implementation Plan
Our recommendation is to focus on municipal waste management rather than direct B2B just yet and implement the second alternative stated above. Since Growing City already has their foot in the door, and has proven their ability/ effectiveness in the organic recycling business, we have decided that now is the time to start advertising their services to the municipalities who have already/ are in the process of mandating sustainable waste management legislation. In order to do this, Growing City should develop a presentation that can be used to demonstrate to municipalities why it is essential to implement a sustainable waste management plan with rules specifically geared toward organic recycling, similar to Vancouver’s ISWM 2.6.2 (e) and why Growing City is the perfect candidate to take over that large responsibility. Growing City’s objective through this is to grow the market while simultaneously increasing the company’s market share through the adoption of subcontracts with cities throughout Canada. The following is a summary of what the presentation would entail: * Brief introduction to Sustainable Waste Management * Introduction to Canadian organic recycling industry (why it is essential to SWM) * Explanation of Growing City’s vision * Description of Growing City’s Business model. * Show Growing City’s past success in corporate compost industry. * The benefits Growing City can provide the municipality (How it can be tailored/ geared toward each). * How we will get over the complications * Business proposition
Action plan
Who: Canadian Metropolitan Municipalities; 2015 projections indicate that compost sales in Canadian provinces will be 12 million with a pessimistic forecast and 240 million with an optimistic forecast (Exhibit 3).
When: It is urgent, the initial provinces that we are targeting were chosen based on three factors: 1. The amount of compost/ forecast created by each province. 2. The percentage of population that lives in metropolitan areas, since targeting a larger market presents more opportunity for prenominal growth 3. The current or forecasted (pending on provincial legislation) municipal policies (Exhibit 4) * Ontario: The diversion policy will be at 60% this means that the policy demand value will be 2,372,666 tons which will be a $393,294,903 servicing value for Growing Cities. * Alberta: The diversion policy will be at 50% this means that the policy demand value will be 1,460,962 tonnes which will be a $242,170,251 servicing value for Growing Cities. * British Columbia: The diversion policy will be at 100% this means that the policy demand value will be 1,318,979 tonnes which will be a $218,635,035 servicing value for Growing Cities. * Quebec: The diversion policy will be at 65% this means that the policy demand value will be 995,796 tonnes which will be a $165,063,834 servicing value for Growing Cities.
Where: The company currently operates in British Columbia, Manitoba, Ontario and Quebec - these provinces match well with our initial assessment (Exhibit 5). Therefore, Growing City should expand into metropolitan areas in these provinces. It makes more sense to target metropolitans in the provinces where Growing City has already established a business model. The company can further expand into different provinces once the latter is complete.
How: Use the model in second alternative by tailoring a plan based on each province/ metropolitan area. Use previous and current success as a motivator. In our chosen alternative we may want to promote the implementation of similar rules such as the 2.6.2 (e) into other municipal waste management plans (which need to be approved by the provinces). For the provinces that have already incorporated a similar organic recycling rule into their sustainable waste management plan, the best option from there would be to try to convince these municipalities to allow Growing City to take over that responsibility. A way to incentivize other municipalities to take on the Growing City’s subcontract is to agree that any compost taken from their municipalities and donated is given to local non-for profit organizations to give back to their city.

Contingency If municipalities do not agree to take on Growing City as a contracted organic recycling provider there are two major alternatives. They both concentrate on direct B2B efforts. Through this Growing City can focus on advertising services with the popular social/ cultural trend recycling organics is attached to. They can attempt to target B2B relationships with major corporations who are trying to promote traditional Corporate Social Responsibility and make their business greener, then eventually once legislation passes, hope that Growing City has become popular enough that the municipality subcontracts the responsibility to them.

Exhibits

Exhibit 1:

Exhibit 2

Exhibit 3

Exhibit 4
Exhibit 5

Works Cited “2011 Annual Report.” Publication. Island Waste Management Corporation. 2011. Web. 14 Feb. 2013. PDF file. Bonam, Rathan , Dr.Shirley Thompson, and Dr. Nicola Koper. “Curbing Climate Change through Organics Diversion: Results of a National Survey” University of Manitoba. Natural Resources Institute. n.d. Web. 14 Feb. 2013. Powerpoint file.

Brinkhoff, Thomas. "Canada: Metropolitan Areas (Estimates)." City Population . N.p., 1 Dec. 2012. Web. 14 Feb. 2013. <http://www.citypopulation.de/Canada-MetroEst.html>.

“Getting to 50% and Beyond: Waste Diversion Success Stories from Canadian Municipalities.” Publication. 2009. Web. 14 Feb. 2013. PDF file.

“Growing City.” Dragon’s Den. CBC Player. 2013. Web. 11 Feb. 2013. Mary Teresa, Bitti. " Growing City composting company puts the brakes on franchising after Dragons Den appearance | Entrepreneur | Financial Post." Financial Post | Canadian Business News, Investing and Commentary. Financial Post, 28 Jan. 2013. Web. 21 Feb. 2013. <http://business.financialpost.com/2013/01/28/growing-city-composting-company-puts-the-brakes-on-franchising-after-dragons-den-appearance/>.

"Metro Vancouver to ban compostable organics from landfill by 2015 | A Composting Journey." A Composting Journey | Product Testing Blog. Product Testing Blog, 17 Dec. 2010. Web. 21 Feb. 2013. <http://chadcomeault.wordpress.com/2010/12/17/metro-vancouver-to-ban-compostable-organics-from-landfill-by-2015/>.

Metro Vancouver. "Integrated Solid Waste and Resource Management." Sustainable Region Initiative. Metro Vancouver, n.d. Web. 21 Feb. 2012. <www.metrovancouver.org/about/publications/Publications/ISWRMP.pdf>.

laws. "Sustainable Waste Management." Metro Vancouver. Sustainable Waste Management, n.d. Web. 21 Feb. 2013. <http://www.metrovancouver.org/services/solidwaste/planning/Pages/default.aspx>.

“National and Provincial Jurisdictional Approaches to Solid Waste Management.” Publication. Government of Saskatchewan, n.d. Web. 14 Feb. 2013. PDF file.

"Nova Scotia Environment Compost Maturity Study: Final Report." Government of Nova Scotia. HMJ Consulting Limited, 15 Oct. 2008. Web. 11 Feb. 2013. <http://www.gov.ns.ca/nse/waste/docs/Compost.Maturity.Study.Report.pdf>.

“Reduction & Diversion: An Action Plan for New Brunswick.” Publication. Government of New Brunswick. Department of the Environment and Local Government. 2001. Web. 14 Feb. 2013. PDF file.

Werf, Paul van der, and Michael Cant. "Composting in Canada." Waste Management World . PennWell Corporation, n.d. Web. 11 Feb. 2013. <http://www.waste-management-world.com/articles/print/volume-8/issue-2/special/composting-in-canada.html>.

--------------------------------------------
[ 1 ]. Waste Management World
[ 2 ]. Growing City composting company puts the brakes on franchising after Dragons Den appearance, Financial Post
[ 3 ]. Vancouver’s Sustainable Waste Management Plan 2010
[ 4 ]. Chad Comeau IWSM comments
[ 5 ]. Nova Scotia Environment Compost Maturity Study: Final Report

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