Sustainable Growth at TerraCycle: Should Manufacturing Be Moved?
(8 pages of text)
As of April 2012, TerraCycle had witnessed exponential growth over the past few years due to its unique value proposition of creating a line of consumer products out of trash. With continued global expansion, the firm’s biggest challenge was how to move forward while staying true to its mission to eliminate as much waste as possible from landfills, make fun products that consumers liked, and turn a profit. Operationally, TerraCycle was losing money on every domestically manufactured product and was regularly late on delivering its shipments to a major retail customer. All signs indicated that the company should move some of its manufacturing to an offshore location; however, TerraCycle had built its reputation on its strict adherence to the principles of sustainability, and such a move could cause a significant public-relations problem. There was little time to act, as orders from Walmart and Target were piling up. Should the CEO move some of TerraCycle’s production to China?
This case is most appropriate for upper-level undergraduate students or introductory-level graduate business students. It can be used to stimulate discussion and analysis across a broad spectrum of classes, such as business ethics, management strategy, marketing strategy, sustainability strategy, and operations management. The learning objectives are as follows:
- To have students understand and appreciate the benefits of a cradle-to-cradle approach to product design and production.
- To illustrate the importance of having an organizational mission that acts as a guiding force for strategic decision-making.
- To introduce a model that can be used to aid in sustainable decision-making: the triple bottom line, which balances the needs of stakeholders by emphasizing the need to simultaneously consider the needs of the economy, the community, and the natural environment.
United States, Medium, 2012
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