Clean Harbors Core Competencies

Clean Harbors Inc. External Analysis

Clean Harbors was founded in 1980 and is the largest hazardous waste disposal company in North America. They have four business segments: technical services, field services, industrial services, and exploratory services. Field services provide environmental cleanup services and emergency response environmental assistance. Its services involve the cleanup and restoration of buildings, equipment, and sites that have been contaminated by exposure to hazardous materials. Projects include decontamination of commercial, educational, industrial, laboratory, research, and manufacturing facilities. Clean Harbors is expected to generate $410 million in revenues related to the environmental cleanup industry.
The industry Clean Harbors operates in is very competitive with high barriers to entry, low company concentration, and heavy regulation.
The Remediation and Environmental Cleanup Services industry as a whole made about $19.3 billion in revenues in 2011. The largest firms within that industry are CH2M Hill Companies Ltd. and The Shaw Group Inc. with 9.3% and 9.1% of market shares respectively. Clean Harbors has a market share of about 1.7%. Key external drivers of the remediation industry and Clean Harbors are: government consumption and investment, federal funding for homeland security, demand from construction, and the natural disaster index. Key success factors are: having a diverse range of clients, ability to alter mix of inputs in line with cost, ability to effectively manage risk, licenses, ability to compete on tender, and compliance with government regulation. Some other external factors which affect Clean Harbors which we considered in our research are political, economic, social, technological, environmental, and
legal. Political powers factor hugely into the company’s performance. In 1976 the U.S. federal government passed the Resources Conservation and Recovery Act (RCRA) and the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) in 1980. Both laws set the framework for controls on hazardous waste from its generation to its disposal. CERCLA established the Superfund for the cleanup of hazardous sites. Clean Harbors bids on projects and does a great deal of its business because of these laws. The economic factors which affect the company most are the general state of the overall U.S. economy. A good deal of work is done on cleaning up before and after construction projects, which can fluctuate with the economy. However, because of the government projects mentioned before, the revenues have more stability than the rest of the economy. Social factors play a role in the company’s performance as well. The more society becomes aware of environmental waste and wants something done about it, the more they will push the government to set aside funds for it. “Going green” is becoming more popular and is good for us as it provides business opportunities. Technological factors don’t play as big a role in this industry as one would think. The biggest expense Clean Harbors has is salaries and wages. It is very labor intensive work and does not require super sophisticated technology. Environmental factors have a large effect on Clean Harbors. Natural disasters such as hurricane Katrina or the other events such as the BP oil spill provide business opportunities for the company. Though these events actually boost the revenues, they are impossible to predict. Lastly, legal factors play a big role in how Clean Harbors performs. As stated before, RCRA and CERCLA provide guaranteed government funds for Clean Harbors.