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Evidence 1. Porters Five Forces Model

The document discusses Porter's Five Forces model analysis of the recycling industry in Mexico. It identifies regulatory compliance and technological sophistication as particularly crucial barriers to entry. It describes intense rivalry among recycling companies competing for resources and opportunities. It analyzes supplier power in the industry, noting factors like availability of recyclable materials, supplier concentration, switching costs, and vertical integration influence this power.

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16 views4 pages

Evidence 1. Porters Five Forces Model

The document discusses Porter's Five Forces model analysis of the recycling industry in Mexico. It identifies regulatory compliance and technological sophistication as particularly crucial barriers to entry. It describes intense rivalry among recycling companies competing for resources and opportunities. It analyzes supplier power in the industry, noting factors like availability of recyclable materials, supplier concentration, switching costs, and vertical integration influence this power.

Uploaded by

gabooobgaa
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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INSTITUTO TECNOLÓGICO Y DE ESTUDIOS SUPERIORES DE MONTERREY

Campus Puebla

International Competitiveness and Business Opportunities (Gpo 251)

Evidence #1: Porter's Five Forces Model - CANVAS

Gabriel Chávez Moscoso-A00837679

Heroica Puebla de Zaragoza, Puebla


1. Which identified barriers to entry do you consider the most important and
why?
Among the identified barriers to entry in the recycling industry in Mexico, several are
particularly crucial:

Regulatory and Compliance Requirements: Compliance with regulations regarding waste


management, environmental protection, and safety standards poses a significant barrier to
entry. New entrants must invest in ensuring compliance with these regulations, which requires
substantial capital and expertise. Additionally, navigating the complex regulatory landscape
may be challenging for newcomers.
Technological Sophistication: Established recycling companies have likely invested in
advanced technology for sorting, processing, and recycling plastics efficiently. New entrants
may struggle to match these technological capabilities, hampering their ability to compete
effectively in terms of productivity and quality.
Economies of Scale: Larger recycling companies benefit from economies of scale, enabling
them to spread fixed costs over a larger volume of recycled materials. New entrants may find
it challenging to achieve similar economies of scale initially, leading to higher average costs
per unit of output and reduced competitiveness.
Access to Supply Chains: Established recycling companies have established relationships and
agreements with suppliers of recyclable materials, such as municipalities and businesses. New
entrants may face difficulties in securing reliable sources of feedstock, which are essential for
sustaining operations and meeting customer demand.
Brand Recognition and Reputation: Established companies often enjoy strong brand
recognition and reputation for reliability, quality, and sustainability. Building a brand and
reputation takes time and resources, making it challenging for new entrants to compete
effectively, especially in attracting customers and strategic allies.

Considering the Mexican context and the dynamics of the recycling industry, regulatory
compliance and technological sophistication are particularly crucial barriers. Mexico has
stringent regulations concerning waste management and environmental protection, and
compliance with these regulations requires significant investments and expertise.
Additionally, technological advancements are essential for efficient recycling processes, and
companies with established technological capabilities have a considerable competitive
advantage.

2. What kind of rivalry exists in the sector, and who are the main competitors of
your assigned company?
The recycling sector in Mexico likely experiences intense rivalry as companies compete for
access to feedstock, customers, strategic alliances, and market share. Each company listed in
the document competes with others in the industry, but the main competitors may vary
depending on factors such as market position, specialization, and geographical presence.
For instance, Ecoce may face rivalry from other recycling companies focusing on plastic
packaging recycling, as well as organizations promoting environmental awareness and
education. Nestlé competes not only with other recycling companies but also with beverage
and consumer goods companies that have their recycling initiatives and sustainability
programs. Recimex competes with other recycling companies specializing in processing
urban and industrial solid waste, as well as waste management companies offering similar
services.
PETstar competes with other PET recycling companies and manufacturers utilizing recycled
PET resin in their products. RECO Recycling Group competes with other companies offering
recycling services for industrial and commercial waste, as well as waste management
companies focusing on corporate clients. ANIPAC competes with industry associations
promoting sustainability and responsible plastic management, as well as government agencies
and NGOs advocating for environmental protection.

Overall, rivalry in the recycling sector is likely fierce, driven by competition for resources,
market share, and opportunities to differentiate through innovation and sustainability
initiatives.

3. You will select ONE of the remaining elements of the model (customer power,
supplier power, or substitute power) and explain it in detail.
Supplier power refers to the influence and leverage that suppliers have over the industry or
individual companies within it. In the context of the recycling industry in Mexico, suppliers
primarily consist of entities that provide recyclable materials, such as municipalities,
businesses, and individuals.
Factors influencing supplier power in the recycling industry include:
Availability and Quality of Recyclable Materials: Suppliers with abundant and high-quality
recyclable materials have more bargaining power, as they can demand favorable terms from
recycling companies. Conversely, scarcity or poor quality of recyclables can weaken supplier
power and force recycling companies to seek alternative sources or invest in improving
material quality.
Supplier Concentration: If a small number of suppliers dominate the market for recyclable
materials, they may wield greater power to dictate prices, terms, and conditions. Conversely, a
diverse and competitive supplier base can mitigate supplier power by providing more options
and opportunities for negotiation.
Switching Costs: For recycling companies, switching between different suppliers of
recyclable materials can entail significant costs and disruptions to operations. Suppliers can
leverage this to negotiate better terms or maintain higher prices, thereby increasing their
power in the relationship.
Vertical Integration: Suppliers that are vertically integrated into the recycling value chain,
such as waste management companies or manufacturers with in-house recycling facilities,
may have more control over the supply of recyclable materials. This integration can increase
supplier power by limiting access to alternative sources of feedstock for recycling companies.
Overall, supplier power in the recycling industry can vary depending on factors such as the
availability and quality of recyclable materials, the concentration of suppliers, switching
costs, and vertical integration. Recycling companies must carefully manage relationships with
suppliers to ensure a reliable and cost-effective supply of materials while also exploring
opportunities to diversify and mitigate supplier power through alternative sourcing strategies.

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