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END SEM TAKE HOME EXAM - STRATEGIC MANAGEMENT
Final report
New Venture: Sheesh Mahal Glass Recyclers (SMGR)
Submitted by
Sohilpreet Singh Walia
Roll No. 401107028
Second Year
L.M Thapar School of Mangament, Chandigarh Campus
THAPAR UNIVERSITY
December 2015
Contents1. Description of the new venture............................................................................................................3
2. Value proposition................................................................................................................................4
3. VISION, MISSION, CORE VALUES AND OBJECTIVES...............................................................5
4. EXTERNAL AND INTERNAL ENVIRONMENTAL FACTORS....................................................7
5. PORTER’S FIVE FORCES ANALYSIS............................................................................................9
6. VALUE CHAIN ANALYSIS............................................................................................................11
7. Operational model.............................................................................................................................13
8. Revenue model..................................................................................................................................13
1. Description of the new ventureThe recycling of composite material such as glass is a growing environmental concern, and one
that doesn't have a concrete solution yet. Even most scrap metal recyclers aren’t suitably
equipped to deal with this issue. In our country, this problem is widespread. Recycling is
minimal and garbage heaps are there each and every nook in our towns and societies. The glass
is more dangerous as if broken it can harm the animals feeding on the garbage, the general public
at large.
13 Million tons of glass is being produced per year. Glass is one of the few materials that can be
recycled without loss of material. The container glass collection and recycling have seen a
dramatic acceleration over the last 20 years to reach 70 % recycling in Europe. It is a win – win
equation for the community and the glass producers. The European container glass industry has
achieved a record of 70 % recycling rate in 2010. However, there is still important potential for
growth with important differences between Europe and India. Currently, glass recycling in India
is in its early stage.
Glass recycling is the process which involves turning waste glass into usable products. The glass
is widely used in our daily life. It makes up a large component of household and industrial waste
due to its weight and density. The glass component in municipal waste is made up of bottles,
broken glassware, light bulbs etc. An interesting point about the glass recycling process is that
glass can be recycled as many times as required, without any deterioration in quality. The glass,
once recycled, can be used to construct concrete curbs but it will take time before the techniques
for recycling glass can become widespread.
The venture which would be created is SMGR. The “Sheesh Mahal Glass Recyclers (SMGR)” is
involved in recycling of the Glass, an important component used in our everyday life whether it
is a household or an industry. It consists of the team which is dedicated to increase glass
recycling in India. The venture would first focus on the major glass manufacturing districts such
as Kolkata, Faridabad and Mumbai.
Glass that is crushed and ready to be re melted is called cullet. Glass waste should be separated
by chemical composition, and then, depending on the end use and local processing capabilities,
might also have to be separated into different colors. Many recyclers collect different colors of
glass separately since glass retains its color after recycling. The most common types used for
consumer containers are colorless glass, green glass, and brown/amber glass.
The SMRG is passionate and we will try to ensure that every Indian realizes the value of
recycling glass and should actively embraces the practice of recycling. We endeavor to instruct,
empower, urge and move people to isolated their glass for reusing, yet don't physically gather or
reuse the glass. Our focus is on the consumers, communities, trade, industry and corporate India.
We additionally expect to elevate the unemployed and poor by making wage producing
opportunities in the recycling segment. We believe in the infinite potential of glass recycling to
make a real and positive contribution to society. At SMGR, we are committed to show that glass
recycling is worth the effort.
2. Value proposition The SMGR carries a unique value proposition for the community by reducing and eventually
eliminating the landfill disposal and he glass makers by diminishing the energy consumption and
emissions (C02 and Sox). There can be three types of stakeholders for this business:
Government, Society and Shareholders. The main value proposition is to simplify glass
recycling in India, and to start the building of an overall entrepreneurial approach to support
the Glass Crusher deployment in our country and to reduce the pollution. We will add value to
our society by making environment clean and green. This will help the people living in the
society by reducing harmful effects of glass which can harm their health. This will reduce health
disease and make environment more eco-friendly. The other advantages are-
Recycling glass saves scarce landfill space.
By recycling, we can prevent waste glass from filling up already overfilled ‘dump sites’, landfills
in India.
Keeping India clean.
By recycling instead of littering, we are ensuring our natural environment is kept clean and
beautiful.
Recycling reduces carbon footprint.
Taking into account the transportation and processing, for every ton of glass made out of
recycled glass, 670kg of CO2 emissions are saved. Recycling also reduces the need for raw
materials to be quarried thus saving non-renewable, natural resources.
Glass recycling saves energy.
Recycling can save a lot of energy. Already we have limited electricity production in India, so it
can play a part by saving some electricity.
Recycling conserves our natural resources.
For every ton of waste glass used to manufacture new glass, 1.2 tons of natural resources are
saved.
Collecting glass for glass recycling can serve as a source of income.
Unemployed people and poor people will be able to earn a source of income by collecting and
selling the glass to our company.
Target market Industries using glass as a product or a
byproduct
Benefits Functional, Symbolic, recycled galss,
environmental friendly
3. Vision, Mission, Core values and ObjectivesVision
Sheesh Mahal Glass Recyclers (SMGR) aims to develop a profitable glass recycling company
and a clean living environment. By recovering glass from waste, we are making a tangible
contribution to resolve the issue of raw materials shortage and contribute substantially to
achieving climate targets
Mission
Sheesh Mahal Glass Recyclers (SMGR) would play a leading and connecting role in the value
chain from waste to raw materials. We work with our customers, suppliers and other supply
chain partners on an ongoing basis to build cycles and create environmental and economic value
from glass waste. . We will try to be the leader in our industry through individual and combined
dedication, innovation, and integrity
Values Statement:
The core values of SMGR are-
Act with honesty.
Always work effectively and efficiently
Treat everyone including employees with respect
Do the business by following all laws and norms.
Focus on CSR
Strive for customer satisfaction
Improve and innovate continuously
Minimize the waste
Objective:
The various objectives are mentioned below:
Reduce production cost and improve our nation's ability to compete.
Reduce greenhouse gas emissions
Save landfill space
Create Employment
Provide raw materials for industry
Prevent air and water Pollution
Save limited natural resources
4. External and internal environmental factors
Internal environmental factors:-
Strengths: -
The biggest strength of our business is that it is helping the environment become cleaner.
Huge potential as there are very less competitors.
The garbage waste is increasing as our country becomes more and more advanced.
Maslow's Hierarchy of needs are fulfilled. Shareholders meet physiological (pays enough
to buy basics), safety (safe environment Mission Zero, healthcare, job security), social
(teamwork, sense of belonging, newsletters), esteem (acknowledgment, promotions -
recognition and status), Self-actualization (challenging - for new innovation areas) needs.
1 bottle can be recycled to exactly 1 new bottle.
STRENGTHSCradle to cradle( 1 bottle collected= 1 bottle produced.
Very less competitionGrowing waste
People's attitude is changing towards recycles productsFocus on Environmeny.
Focus on qualityMaslows hierarchy of needs
WEAKNESSESMarketing issues
Heavy investmentPoor corporate culture
Labour unionsHigh turnover rate
Lawsuits
OPPORTUNITIESSupport by the government.More technolgy investment
Increasing demandGood market segmentation
THREATSLow R&D in India
Bureaucratic hiccupsIncreasing contamination of waste
Color sorting techniques.Extensive government regulations
Dynamically Continuous and Discontinuous innovation
SWOT Analysis
Weakness: -
A very high initial investment is required for setting up the whole project. This will lead
to high product cost.
Lawsuits regarding improper waste disposal can hurt the company’s reputation.
Marketing is very essential. People and industries need to understand the benefits of
glass recycling.
The corporate culture in India is very poor.
Labor unions often disrupt the work.
External environmental factors: -
Opportunities: -
The societies and government are getting more concerned about the pollution. This is the
biggest opportunity for our business. This will help our business to grow as government
will also support our venture.
The demand is continuously increasing as people become more concerned and sensitive
towards deteriorating environment.
Market segmentation can be done properly. Most of the glass manufacturers are located
in NCR region, Mumbai and Kolkata. Majority of glass waste is produced by the large
ceramic industries.
Threats: -
Differences in laws regarding waste handling and environmental concerns among
different states.
Very less research and development in our country.
The bureaucratic hiccups will be definitely faced
It is hard to get people to change and embrace new ideas. For glass waste management
this will include changing, what/how to recycle and how we throw away trash
The waste industry is subject to extensive government regulation; existing or future
regulations and/or enforcement actions may restrict our operations, increase our costs of
operations or require us to make additional capital expenditures.
Growing waste collection and continuous needs for heavy investment
Increasing contamination of the waste being collected is a problem
More stringent quality requirements as the cullet intake in the furnace batch is growing
Needs for color sorting technologies
Rapid growth of the waste elimination cost supported by the glass recyclers
5. Porter’s five forces model
Competitive rivalry:
There are very few players in this industry so there is low competitive rivalry within industry.
Bargaining power of Buyer:
Due to low competitive rivalry i.e. low competition; buyer doesn’t have enough option with
them so they can’t bargain. This will lead to low bargaining power of the buyer.
Bargaining power of the suppliers:
Municipals do not collect glass waste. Landfills sell glass waste at relatively less price.
Threats of new entrants:
This business requires huge amount of initial investment and knowledge. So because of all the
above reasons it will very difficult for the new entrant to enter in this business. So there is low
threat of new entrant.
Threat of substitute:
Landfills can be a substitute.
Figure 1 5 Porters model (Made as a template)
6. Value chain analysis
There are two activities in every value chain: -
Primary activities: - These are those activities that are involved in the creation, sale and
transfer of products (including after-sales service).
o Procurement of raw material
o Manufacturing of a product
o Distribution of product
o After-sale service.
Secondary activities: - These are those activities that merely support the primary
activities.
o General administration
o Human resource.
The value chin can be explained as follow:
Figure 2 Value chain
Waste glass is collected
Then purification processes are done.
Fining processes
are d
Cullet melting and purification
is done.
Re forming of the glass.
End products
are created.
New bottle
7. Operational model
India produces 11 million tons of glass waste annually and 72.5% of waste is produced by
Mumbai, NCR and Kolkata, hence we are going to target these cities where we can easily locate
our target customers and companies. Glass waste management will be implemented by targeting
a specific locality which would cover about 10000 households in the pilot phase. A government
tie-up for waste collection would also ensure a steady supply of revenue as a compensation for
the work done on their behalf.
Waste collection will be done by a team of workers who would collect domestic waste from the
specified households, landfills each day. We will also partner with local dealers and directly with
rag pickers for collection of waste. The waste collected will be sorted at source site and
transported to our ‘Waste Treatment Site’.
In order to increase the environmental awareness, we will partner with various Malls, Schools
and others to organize Recycling Drives, Awareness Campaigns, Environment Weeks and
Workshops to reach the people and spread our message of Clean Cities and Sustainable Living.
8. Revenue model
The business would take about 13 months to attain break even considering the high cost of waste
collection in the initial phases. The return on Investment (ROI) on an investment of 2.03 crores is
about 10.2% by 3 year of operation.
Costs Amount Revenues Amount
Fixed Costs
Selling Recycled
bottles 15000000
Cost of buying 3 Mini Trucks 1500000
Land for setting up plant 3000000
Machine Costs 2000000
Government
Revenues 100000
Variable Costs Total Revenues 15100000
Driver Annual Salary 54000
Helper Annual Salary 42000
Fuel Costs 45000
Factory 240000
Collection Agents (10) 360000
Machine Handling Employees salary 300000
Other expenditure 360000
Management Personnel 200000
Machines Maintenance Cost 200000
Electricity Cost 120000
Telephone Cost 12000
Other expenses 60000
Waste from dealers 1200000
Total 20313000
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