Case Study

Plastecowood: A future for plastic trash

12 pages
December 2021
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
Recycling, Waste Material, Wood Substitute, Growth Management, Business System, Composite Material, Technology Adaptation, Growth
Settings
United Kingdom
Plastecowood, Manufacturing, Lumber and Wood Products
2012 – August 2021
Type
Field Research
Copyright
© 2021
Available Languages
English
Related material
Teaching note, Video
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