WasteManagement

The world is shifting to using canvas grocery bags, reusable metal water bottles and concentrated laundry detergent in small packages as way to help the environment instead of hurting it. Along with people going greener, companies are making an effort to go green as well. This all sounds good except for businesses like Waste Management who makes their money by taking away trash. Instead of waiting until the trend actually starts to hurt the business, David Steiner the CEO of Waste Management has decided to address green initiative as a top priority. Steiner is attempting to take the company in a direction that satisfies Waste Management and environmental sustainability. Steiner realizes that “picking up and disposing of people’s waste is not going to be the way this company survives long term” (Gunther 2010). Steiner realized about five or six years ago that he would need to change Waste Management’s business strategy because of the shift to environmental sustainability and zero waste. Steiner realized Waste Management could make a lot of money selling in commodity markets, but Steiner had another idea he wanted to explore. Steiner also understands that recycling in the United States is not as big as it is in other countries, and he knows he needs to find ways to increase the amount of recycling that the U.S. population does. Steiner noticed the major push to go green and how some companies were pushing to go to zero waste, which would devastate Waste Management’s core business. Because of this, Steiner looked into how the company could make money in other ways. He saw that separating out the trash from things that could be recycled or reused, and selling those things could make for a profit of about 10 to 12 billion dollars. For a company that in 2013 pulled in 14.0 billion in revenue from its core business of hauling trash, being able to generate another 10-12 billion selling some of that trash could drastically improve this business. Steiner, on the other hand wants to do something more unique. Steiner wants to change the way we look at trash and do something a little hard for his competitors to copy. Instead of doing the obvious and sorting the trash and selling the recyclables back to make money, Steiner believes he can do much more. Steiner is looking into creating a specialty chemical, oil or form of energy from the company’s trash. He believes that will be the future of the business as many companies are shifting to a zero waste strategy. For Steiner to fund this project it would seem smart for him and his business to start the sorting of all trash and generate that revenue, hopefully creating a large enough profit to fund the research for his original idea. Until this specialty chemical, oil or energy is found; Waste Management should focus on recycling. One of Steiner’s major problems with recycling is that it just is not as big in the United States as it is in the rest of the world. Japan has managed to get its plastic recycling rate up to 77%, while the U.S. is sitting around 27% (MRC, Mazzoini 2012). This presents a problem for Steiner, one that he is trying to address to with the help of companies such as PepsiCo. Steiner has introduced technology to attempt to increase U.S. recycling rates and increase the company’s profits as well. One major improvement was the single stream recycling system that boosts recycling in certain areas from 5-10% up to 30-40% (WSJ 2012). Steiner is also attempting to make recycling more accessible by partnering with PepsiCo and placing recycling bins at gas stations. Steiner realizes he cannot force people to recycle and that for recycling to work, there are three parts that must come together. Those parts are willing customers, willing government, and a business who can make money doing the recycling. In a fluctuating culture that is headed towards zero waste David Steiner, Waste Management’s CEO is shifting the business to make money in this new culture. Steiner realized around five or six years ago that he would need to change Waste Managements business strategy because of the shift to environmental sustainability and zero waste. With the shift towards zero waste, Steiner has come up with ways for Waste Management to continue to be successful with the ideas of focusing on recycling, creating a special chemical, oil or energy form, and finally finding ways to increase recycling. In an ever-changing business environment, David Steiner has realized the threat and is attempting to change with before the market does.

Sources

"RECYCLING FACTS." Interesting Plastic Recycling Facts. N.p., n.d. Web. 13 Nov. 2014.

Mazzoni, Marry. "Plastics Recycling Rate Hits 77 Percent in Japan - Earth911.com." Earth911com. N.p., 10 Jan. 2012. Web. 15 Nov. 2014.