TerraCycle Inc. (Abridged) - Teaching Note

Learning Objective

This case can be used in a graduate-level strategic management course to illustrate issues relating to vertical integration and growth strategy in emerging markets. The case is suitable for the second half of a strategy course, after students have acquired a basic understanding of key business strategy issues such as competitive advantage and industry structure or economics. After working through the case and assignment questions, students will be able to do the following: ·Explain how a niche company builds a set of capabilities. ·Explain how an emerging market and its context may induce companies to pursue strategies such as vertical integration. ·Describe the impact of product portfolio complexity on a firm’s operations, especially when the complexity is created by taking on debt financing. ·Identify the downsides of vertical integration, especially if the capital intensity of the destination industry is much greater than the origin industry and the destination industry is less attractive than the origin industry.