Assignment
"A Porter's what" Jenny said, looking impatient as she glanced over at Carver. "Jenny, it's called a Porter's Five Forces, named after Professor Michael Porter, from Harvard Business School" Carver replied, emphasizing the word Harvard. Carver knew Jenny would be skeptical and if she agreed to take time to go through this process, it better be worth her while. Jenny Pang was the Chief Financial Officer for ODPG and had been with the company for almost 40 years. She had met Ivan (the original owner) when she was fresh out of university and he hired her on the spot, without even an interview. Ivan always said he felt right about her fit in the company and knew she would steer the organization the right way. Jenny, now in her mid 70's never forgot Ivan's trust in her and did indeed steer the ship through some turbulent times. However, this latest year had her frustrated. Business had changed and it was all about performance metrics and fancy presentations. For Jenny, she wanted to see hard facts, like in the old days. How they could be running a company with a declining gross margin was not good business in her mind. The fact that they did not even know why the gross margin declined in the first place, was even more troubling to her. Customer payment terms were also a huge problem in her mind, which no one seemed to care about. Suppliers were asking them for faster payment and customers continued to extend terms. Even shipping to some countries posed risks, that the Sales Team simply ignored. "Alright Mr. Parks" Jenny replied. "I will trust your process, but I will advise you that my time is limited and I would prefer to get right down to the business on hand - we have a company to fix, as you know". "I second that Carv" said Barry. "Let's get this moving as I have a meeting with the WCCA" later this afternoon. "Sure Barry" replied Carver. "Who's the WCCA"? "It's the Western Canadian Construction Association. They use a lot of standard parts but they have an erratic ordering system. We are thinking about setting up an inventory exclusively for them in Calgary DC and a separate cloud based system to order from phones, etc. It's pretty slick". "Sounds great Barry. Have we ever done any development for smart phone applications or any other omni channel requirements for clients?" asked Carver. "No" replied Barry. "This would be a brand new service for us and its light years ahead of our competition. It provides that value add we need Carver. Now we could really justify a higher price based on this type of service. Problem is I don't even know how the costing works so it's a bit of a shot in the dark right now.
Report Overview The global plastic market size was valued at USD 568.9 billion in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 3.2% from 2020 to 2027. Increasing plastic consumption in the construction, automotive, and electrical and electronics industries is projected to drive the market for plastic over the forecast period. Regulations to decrease gross vehicle weight to improve fuel efficiency and eventually reduce carbon emissions have promoted the use of plastics as a substitute to metals, including aluminum and steel, for the manufacturing of automotive components. This is further expected to favor the rising demand for plastics in automotive applications over the forecast period. The growth of the construction industry in emerging markets such as Brazil, China, India, and Mexico has been instrumental in fueling the demand for plastics during 2018 and 2019. However, the recent outbreak of COVID-19 has hampered the demand for plastic in various applications including construction, automotive, electrical and electronics, and consumer goods owing to a halt in manufacturing operations, restrictions on supply and transport, and economic slowdown across the globe. Growing population coupled with rapid urbanization and industrialization in emerging economies has been impelling federal governments to increase their construction spending to cater to increasing infrastructure needs. Rising construction spending by governments, particularly in China and India, will drive the demand for plastics in infrastructure and construction applications. Stringent regulations regarding depletion and recyclability of conventional materials such as metal and wood are anticipated to drive the demand for plastic from construction industries in insulation, pipes, cables, floorings, windows, and storage tanks. Polymer fittings are also generally quite simple and easy to install, compared to metals or wood, with a wide range of color combinations, adding to their aesthetic appeal. Product Insights In terms of revenue, polyethylene dominated the market with a share of 25.7% in 2019. This high share is attributable to the rising demand from the packaging sector, which includes containers and bottles, plastic bags, plastic films, and geomembranes. Polyethylene is majorly categorized into two types, namely high-density polyethylene (HDPE) and low-density polyethylene (LDPE). Low-density polyethylene is used as a packaging material in consumer goods, food and beverage, and industrial packaging applications. Whereas, HDPE is widely used in laundry detergent packaging, milk cartons, cutting boards, and garbage bins. Rising demand for packaged food, trays, bottles for milk and fruit juices, crates, caps for food packaging, drums, and other liquid food packaging owing to restrictions on the movement of people to reduce the spread of COVID 19 across the world is expected to drive the demand for polyethylene in the coming years. Application Insights In terms of revenue, packaging dominated the market with a share of 36.5% in 2019. This high share is attributable to great demand from various end-use industries including medical, construction, and electrical and electronics in emerging economies. The impact of the coronavirus pandemic on the packaging industry is expected to remain moderate over the forecast period. The demand for packaging for healthcare products, groceries, and e-commerce transportation is expected to increase sharply, while the demand for luxury, industrial, and some B2B-transport packaging might show sluggish growth owing to several restrictions such as stoppage of industrial production and lockdown of cities, imposed by various governments across the world.
In addition, a decline in consumer spending due to the economic slowdown caused by novel coronavirus is further expected to hamper the growth of various end-use industries including construction, automotive, and electrical and electronics in the coming year. This, in turn, is anticipated to hinder the growth of the plastic market over the forecast period. Regional Insights Asia Pacific dominated the market with a share of 20.3% in 2019, in terms of revenue. This is attributable to the high economic development and consequent rise in consumer spending in emerging economies such as India and Japan along with Southeast Asian countries. Rapid industrialization and an increase in the skilled workforce are benefitting the growth of the manufacturing sector in the region, which in turn, is further fueling the demand for plastics in the region. However, the recent outbreak of COVID-19 in countries such as China, India, Japan, Australia, Indonesia, Thailand, and others are anticipated to hamper the product demand majorly in construction, automotive, electrical and electronics, and consumer goods applications. The outbreak has resulted in the slowdown or halts in manufacturing operations, restrictions on supply and transport, and infrastructure slowdown, which is expected to negatively impact the demand for plastics in the aforementioned applications in the region in the coming years. Key Companies & Market Share Insights The competitive rivalry among producers is high owing to the presence of several players in the market for plastic. The market is highly fragmented in nature with the larger share occupied by medium and small enterprises engaged in the manufacturing of plastic. The principal strategy employed by market players is increased focus on high margin products. Companies are heavily investing in capacity expansion coupled with research and development of plastic to have a balanced product portfolio. This is supported by the fact that in March 2017, BASF SE announced to build a new polymer additives plant at its Caojing site in Shanghai, with an investment of USD 217 million. The strategy comes as a part of BASF's previous announcement to invest over EUR 200 million (USD 213.2 million) to increase its production network for polymer additives. In February 2018, SABIC also announced projects in the Netherlands and Asia aimed at expanding its global capacity for two of its high-performance engineering thermoplastic materials, Noryl and Ultem resins. The planned new production facility in Singapore is likely to go online in the first half of 2021. The organization has also proposed to recommission operations at its Netherlands-based Bergen Op Zoom PPE resin plant by the end of this year to produce polyphenylene ether (PPE), which is the base resin for its Noryl resins and other oligomers.
Task
1) What is the problem (or problems - example is it climate change, plastic in the ocean, fossil fuels, etc)?
2) How does ODPG contribute to it (through the manufacturing of plastic)?
3) How does this issue (s) impact our entire supply chain?
4) What we ODPG do to mitigate it?