Strategic Management

Q.1 Macro Environmental Analysis

The economic crisis in 2008 – 2010 was a key driver in the container industry. For an industry which is already notorious for price fixing, the economic crunch added additional pressure to the market. The Petroleum Industry accounts for approximately 40% of this industry (Babson College, 2013). Research has found a close relationship between GDP and oil consumption. With oil consumption and GDP decreasing, the demand for barrels to transport oil also falls impacting the container industry (Panorama).

Figure 1.1

(Panorama)

A constricting economy also benefits larger competitors that are integrating and acquiring subsidiary companies e.g. Greif Ltd, now owns seven subsidiaries ranging from production, restoration and packaging (Greif Ltd., 2014). This provides them with additional power as they can offer further products and services. Their economies of scale are large and increasing with each acquisition, therefore decreasing the financial burden which is especially important during a period of limited growth. (+)

Rising GPD growth in Eastern economies is increasing market demand. WEO projected growth of 3.7% in 2014 rising to 3.9% in 2015 (World Economic and Financial Services, 2014). Increased economic growth in Eastern communities is driving the demand for petroleum and chemicals higher; therefore with 70% of consumer market increasing, growth in the container industry is foreseeable.

Legal and environmental factors are the remaining two key drivers in this industry. Both are extensively interlinked. This industry is legislated by EPA. Rapid growth between 1990’s and 2000’s drew the eye of the EPA and concerns were raised about pollutant concentrations and water discharge in public water streams. EPA estimated the following waste water levels in 2000:

Table1.1

Containers | Total Waste Water | No. of Drums | Waste Water P/Drum |

Drum Washing | 200 million gallons | 22,222,222 | 9 gallons |

Drum Burn | 45 million...