Technological Firms and Swot Implications

WMX is the world’s largest environmental services firm, with operations in 21 countries and annual revenues in excess of $10 billion. Below we have identified 4 critical success factors for a firm such as WMX and provide a brief assessment of where the firm stands on each factor.

Critical Success Factor (CSF) I:

Raising capital through the stock market:

Assessment from the financial perspective- Waste treatment is a capital intensive business; garbage truck fleets, landfills, waste treatment plants, and incinerators are expensive to acquire and or build. In order to feed its hearty appetite for cash, WMX has adopted a unique corporate structure designed to give it the greatest amount of flexibility possible in selling stock to raise more cash. Each of the company’s five divisions is a publicly traded corporation, even though WMX owns a controls six corporations’ stocks and can issue more of whatever stock is trading at the most attractive prices whenever it needs additional funds; an important strengths smaller competitors do not enjoy.

CSF II:

Providing a full line of services that cover customers’ entire set of environmental waste problems:

Assessment from the customer perspective- Most WMX’s customers see waste disposal as a big headache, and they are looking for simple solutions to what threatens to be a very complex problem. The fewer firms that they have to work with to solve their waste problems, the better. For example- Hoechst Celanese recently needed help in redesigning its processes in seven specialty chemical plants to make them more ‘environmentally friendly. WMX was able t put together a total package of technology, engineering and construction. Capability that was more comprehensive than anything its competitors could assemble. As a result, WMX was able to win the Hoechst Celanese contact, the largest environment focused project that had ever been awarded by the chemical processing industry at that time.

CSF III:

Acquiring suitable landfill sites:

Assessment from the operations perspective- for past many years, WMX had been following a ‘land banking’ strategy. The firm bought superior sites for landfills in excess of its present needs, believing that as land became more expensive and regulations became tougher, prices for suitable landfill sites would skyrocket. They have and now competitors are paying 5 to 10 times what WMX paid, even for geologically inferior sites. In fact, experts predict that regulations will eventually force 3 to 4 landfill sites to close, while the demand for landfill space continues to grow. Such events could make the WMX landfill operation the strongest in the industry.

CSF IV:

Regulatory compliance:

Assessment from the organizational perspective- companies such as WMX exist largely because of environmental regulations, and any failure to comply with them represents a serious weakness. Unfortunately, WMX has had some problems in this area. The corporation was formed in large part by buying up smaller waste management operators. Many of these managers were retained in the company’s decentralized organization structure. In several cases, local operators failed to comply with environment regulations and their actions resulted in WMX’s receiving more than its share of citations for pollution and price fixing. In order to address this weakness, the company needs to build stronger organizational control systems to better monitor the actions of individuals through out its vast empire.