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Case Study

Plastecowood: A future for plastic trash

By Benoit F. Leleux, Alexey Markov, Dominik Stock, Rashod Nasirov and Wolfgang Illing

12 pages

December 2021

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Reference: IMD-7-2283

The case is about Plastecowood, a company that turns plastic packaging waste into assembly products and sustainable lumber. It was founded by John Northcott in 2012 with the vision of taking a global issue – waste from plastic packaging – and turning it into a business. Two years later, when Plastecowood was struggling with ineffective production and lack of profitability, Henning von Spreckelsen came to the rescue and invested in the company. With his approach to radically rationalizing the production process and focusing on gross margin, he succeeded in pulling the company into profit. The company received orders from a number of large respectable clients and finally was able to make to stock rather than to order, which opened the door to larger volumes than ever before. Although the first COVID-19 phase caused disruption, Plastecowood quickly recovered with record sales. Today, with the company building up speed, it has several strategic options. Should the company enter new markets or expand in existing ones? Should it develop new, higher margin products? Will organic growth suffice, or should it consider acquisitions? Finally, might new business models, such as licensing the technology, bear fruit? Henning needs to present a clear strategy on where to take the company next.

Learning Objective

Defining an original value proposition for a technology that solves a major environmental challenge
The benefits and challenges of various business models
The financial implications of strategic choices, in particular working capital and capital expenditure and their risk implications
The challenges and dilemmas related to working capital management in fast-growing firms, especially the tradeoffs between control and speed – the two concepts are perhaps not necessarily antagonistic after all

Keywords

Sustainability, Environmental Social and Governance, Recycling, Waste Material, Wood Substitute, Growth Management, Business System, Value Chain, Composite Material, Technology Adaptation, Strategy, Entrepreneurship, Growth

Settings

United Kingdom
Plastecowood, Manufacturing, Lumber and Wood Products
2012 – August 2021

Type

Field Research

Available Languages

English

Related material

Teaching note, Video

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