Marketing Management Market Audit of Cleanaway IWS MMGT5001
- Subject Code :
MMGT5001
Marketing Management
Assessment Task 1
1.0 Executive Summary
This report completed an analysis of Cleanaway IWS through the development of a market audit. The market audit will analyse macro and microeconomic environments, including customer behaviour habits, segmentation/demographics, and how they impacted Cleanaway IWS's performance. The report demonstrates various analysis techniques, including but not limited to PESTLE analysis, Porter's Five Forces, and TOWS analysis.
The report details a brief overview of IWS Cleanaway, including what the organisation does in the industrial waste industry and working in multiple markets, including, but not limited to, oil and gas and the mining and resource industries.
The first analysis undertaken was to analyse the macro environment using the PESTLE analysis. It has identified critical factors likely to affect the industrial waste industry. These factors and their interactions are paramount, with far-reaching implications. Three key areas were identified for IWS to investigate further, they were:
- Environmental (Recycling)
- Innovation (Technology)
- Employment and Wages (Social)
The report moves from analysing the macro-environmental challenges to the microeconomics, where a Porter Five Forces framework has been developed.This framework is designed to support organisations in assessing thecompetitive environment and making informed decisions on future business decisions. Critical areas reviewed are:
- Threat to New Entrance
- Threat of Substitutes
- Bargaining Power of Customers
- Bargaining Power of Suppliers
- Competitive Rivalry.
Finally, the report reviews critical success factors. The TOWS analysis is an extension of the SWOT analysis and is used for action planning. It helps identify strategies to maximise the organisation's strengths and opportunities and minimise weaknesses and threats to IWS.
The outcome of the TOWS analysis provided three recommendations for consideration developed for Cleanaway IWS:
Investing in Technology- By investing in cutting-edge technology and valuable assets such as robotic cleaning options, Cleanaway IWS can enhance operational efficiency by minimising the physical need for resources to enter the tank.
Grow into Emerging Markets- Embracing emerging markets presents Cleanaway IWS with exciting prospects for substantial growth. This move diversifies revenue streams and allows the company to tap into high-demand areas.
Agile Business Model to Adapt to Change - Developing an agile business model will enable Cleanaway IWS to respond to evolving customer needs nationwide. This flexibility enhances resilience, supports innovation, and ensures a competitive advantage.
2.0 Contents
3.0 Table of Abbreviation and Acronyms
5.2 Three Key PESTLE Elements to Business
5.2.1 Environmental (Recycling)
5.2.3 Employment and Wages Issues (Social)
9.0 Conclusion/Recommendations
9.1 Investment in Technology and Assets
9.2 Grow into Emerging Markets
9.3 Agile Business Model to Adapt to Change
3.0 Table of Abbreviation and Acronyms
IWS Industrial Waste Services
PESTLE Political, Economic, Social, Cultural, Technological, Environmental, and Legal
4.0 Introduction
This report provides a market audit by examining the external and internal environmental impacts on Cleanaway's Industrial Waste Services (IWS) performance.
IWS at Cleanaway work across several key industries and has specialised equipment and labour to manage hazardous and non-hazardous materials from customers' sites to be legally disposed ofor sent to treatment facilities. The service also consults to ensure compliance with regulatory requirements and environmental standards in addition to supporting businesses in ensuring complianceis maintainedwith changes to legislation and providing guidance to support customers in meeting legal obligations.
IWS services several markets, with its key markets being oil and gas and the mining and resources industry. Although Cleanaway is better known as a successful waste management company with a focus on the service industry, the IWS division has grown at an incredible rate of 25.7?IT (Kate, 2024) over the past year, due to a growing market share in these markets' project landscapes.
Cleanaway IWS operates mainly across Australia and has multiple branches in all major cities. It also has a footprint across other locations, from Karratha, Western Australia, to Gladstone, Northern Queensland. In addition to its branch operations, Cleanaway has a significant presence on long-term project sites up in the Cooper Basin, South Australia, and offshore work on the coast of Northern Western Australia and Darwin.
Cleanaway has a substantial footprint across the country with its locations and services and works across several segments.
In the oil and gas industry, IWS's focus is on the midstream segment due to the alignment of requirements. The midstream segment includes long and substantial transmission pipelines that require cleaning during site shuts, storage of hazardous and non-hazardous products, separation sites, compressors/pump stations, and terminals. Cleanaway will provide various services to support the midstream segment.
In addition, the mining and resources industry is similar, with the segment IWS focusing on processing facilities.
However, geographical is another focal point that IWS and Cleanaway consider with segmentation. It is no coincidence that sites in more remote locations around Australia happened by chance. IWS understands that by being prepared to support the extreme logistics of the environment they work in, they need to understand the market and set up to win work.
The current performance of IWS for Cleanaway has been fantastic, with amazing growth for the past twelve months. However, there is a shift in the market landscape, with more companies reducing their pricing to win work at a reduced profit to cope with many companies' economic changes.
5.0 Macro Economics Analysis
5.1 PESTLE Model Table
The PESTLE analysis is crucial for evaluating and analysing the macroeconomic and business environment. By conducting a PESTEL analysis, an organisation can comprehensively review and identify all variables to undertake strategic decisions that may impact its success or failure.
Widely used for evaluating external business environments (Gupta, 2013), the PESTLE analysis allows organisations to identify future macroeconomic variables and develop various scenarios to undertake strategic decisions and plan for future success.
The core elements of the analysis are Political, Economic, Social, and Technological. ' Environment and Legal are added to form PESTEL and thoroughly examine potential issues.
The key to practical PESTLE analysis is identifying a few critical areas likely to affect an organisation's industry significantly. These areas interactions are paramount, with far-reaching implications for future success.
Moreover, the PESTLE analysis effectively evaluates a business's dynamic and competitive nature, enabling organisations to assess the key areas directly and indirectly affecting business performance. This, in turn, facilitates the development of strategies for successful market positioning.
This model empowers organisations to understand their market position, trends, and numerous other aspects, enabling them to update their strategies continually. The following PESTLE analysis reviews Cleanaway's industrial services sector and identifies key areas that can impact the organisation.
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Political |
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Regulations Practices |
Cleanaway needs to navigate different regulations in various markets across the country. Over the past few years, Australia has changed regulations, affecting market entry and how organisations undertake waste management operations. |
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Community |
Other stakeholders, such as non-government organisations, protestors, and activist movements, play critical roles in policymaking in Australia. Cleanaway should closely monitor these organisations so that they can better contribute to community goals as well as corporate goals. |
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Taxes |
A change in the export waste tax will be officially removed in the 2024 Federal budget to promote recycling and reduce landfill waste. |
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Legal Issues |
Mismanagement of industrial waste is a serious issue, and the penalties imposed for waste crime are significant if prosecuted. Provisions, including imprisonment, also address repeat offenders and company directors involved in waste crime. |
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Employment and Wage Issues |
Retaining skilled labour in industrial waste is a big challenge when competing with resource industries such as oil and gas and mining. |
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Economic |
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Infrastructure |
The infrastructure for managing industrial waste has not been maintained well over the past 30 years, so several companies require maintenance and cleaning of tanks and infrastructure. |
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Infrastructure |
Aging fleets and reduced investment in new infrastructure may impact the company's strong foothold against competition. |
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Inflation Rate |
The market's easy liquidity post-recession of 2018 has increased inflation in Australia, impacting not only cost-of-living pressures for Cleanaway staff but also thecost of hiring equipment to estimate jobs in a competitive market, which provides challenges. |
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Social |
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Health and Safety |
Health and safety approaches are becoming more relaxed in certain industry regions. Cleanaway must avoid staff adopting these attitudes as the consequences of failure are too high in Australia. |
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Education |
There is a shortage of technically skilled labour, especially in senior roles, such as supervisorsand higher-level industrial waste staff. More opportunities exist to train and upskill staff and design training programs to grow their skill sets. |
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Demographic |
For Industrial Waste services, Cleanaway has demographics on its side. Australia is a young country and growing, and Cleanaway can use this trend to cater to various industrial segments. |
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Gender Roles |
Gender roles are evolving in Australia. Cleanaway must be committed to increasing the number of females in the industry and promoting females in various corporate and technical roles. Australian society is evolving gender roles and removing stigmas. |
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Technological |
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Innovations |
Innovation in technology in industrial cleaning is undertaken to look at cost-effective alternatives and work to protect staff in a high-risk environment. |
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Technological Developments |
The most recent technology-based innovations implemented by competitors in waste management can deliver valuable awareness into company rational and where the business model's future needs to be planned to compete as a business leader. |
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Communication and Information Tech Trends |
More industry providers need to have a robust project management platform that provides the customer with an end-to-end project solution. One key area of this is communication on progress performance and change management. |
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Intellectual Property |
With the industry being more competitive than ever, other businesses will likely invest in research and development. |
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Environmental |
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Solid Waste |
Increasing industrial waste generation is a global concern that should be addressed solemnly and critically. Over recent years, the implications of different industrial wastes on the environment and human health have become more critical and pertinent worldwide. |
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Climate Change |
Opportunities to reduce CO2 and how industrial waste companies can look at new ways of processing the slurry waste would be game changers for the industry. |
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Customer |
Greater customer awareness has also made environmental challenges central to theCleanaway strategy. Customers expect Cleanaway Waste to adhere to and exceed legal standards to become responsible stakeholders in the community. |
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Electrical / Hybrid Vehicles |
More and more companies are investing in non-petrol vehicles and trucks to minimise their environmental footprint, which shareholders and communities want to see. |
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Recycling |
Recycling is rapidly becoming the standard rather than just a positive practice in the Australian economy. Cleanaway needs to plan to comply with regulations and meet the expectations of the waste management sector. |
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Legal |
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Environmental Laws |
There are several environmental laws in Australia, and Cleanaway is required to comply with all laws and regulations, which can vary from state to state. |
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Intellectual Property |
Legal protection of intellectual property (IP), patents, copyrights, and other IPR rights in Australia. How Cleanaway Waste will be impacted if there is not enough protection of its IP could be taken advantage of by competitors. |
5.2 Three Key PESTLE Elements to Business
5.2.1 Environmental (Recycling)
The recycling rate of plastics in Australia is concerning, with only 16 per cent of the 2.6 million tonnes of plastic wastebeing recycled. This recovery rate is much lower than other materials like metals, paper, and glass(Clure, 2022).
Furthermore, commercial businesses such as restaurants and cafes produce 32.8 million tonnes of waste oil as part of their industrial waste. While this amount is relatively low compared to other industrial waste products, there are opportunities to recycle and reuse it as feedstock for sustainable biodiesel and aviation fuel. Currently, processing cannotbe donein Australia, which presents an opportunity in the market for Cleanaway to become the first in Australia to recycle waste oil(Potter, 2024).
5.2.2 Innovation (Technology)
IWS's industrial tank cleaning services are a growing source of revenue, serving organisations throughout Australia. A team of three to four operators uses high-pressure and industrial vacuums to clean the tanks. This work demands extensive training and places individuals in high-risk situations, making safety a top priority. Operators must sometimes enter the tanks with appropriate safety gear to complete the cleaning.
Moreover, given the rapid technological advancements, there is an opportunity to explore and invest in safer work practices by incorporating robotic technology. We can create a secure, efficient, and cost-effective solution for removing hazardous and non-hazardous substances from industrial waste tanks and structures by eliminating human entry into confined spaces (Maini, 2023)
5.2.3 Employment and Wages Issues (Social)
Cleanaway has made impact in reducing vacancies across the organisation. However, the current staff retention rate is low with an average of 30 per cent voluntary turnover within the first 12 months of employment (Macquarie, 2023). This has been attributed to the excessive stress experienced by workers due to the staff shortage, coupled with the expectation of overtime work in a high-risk environment. These conditions could lead to potentially hazardous situations. Furthermore, adequate training for supervisors and operators could have prevented reportable safety incidents.
6.0 Microeconomics Analysis
6.1 Porter Five Forces
In 1979, Michael Porter introduced the Porter Five Forces framework in an article published in the Harvard Business Review.This framework is designed to support organisations in assessing thecompetitive environment and making informed decisions.
The framework consists of five dimensions that shape an organisation's landscape. These dimensions include the threats of new entrants into the market sector, threats of substitutes, bargaining power of suppliers, and competitive rivalry.
Porter's Five Forces frameworkgives organisationsa competitive overview of the landscape and helps management think critically about the organisation's position and strategic plan.It reveals previously unrealised opportunitiesandserves as a risk mitigation tool to identify threats and future challenges previously unknown (Danao, 2024).
Utilising the Porter Five Forces framework, the analysis below offers valuable market insights into the industrial waste sector for IWS. It underscores the formidable barriers to entry for potential new competitors due to the high capital and resource investments required, particularly in an industry already facing resource scarcity.
The threat to Cleanaway's industrial waste services market primarily stems from competitors offering similar services at lower prices. While this may appeal to customers in the current economic climate and impact income streams, it is crucial to note that underperformance is not an option in this sector due to environmental regulations and governing bodies (Environmental Protection Authority Victoria, 2023). Furthermore, it presents opportunities for IWS to step in and address any gaps competitors leave.
In an increasingly competitive environment where rivals are vying for work at remarkably low margins, IWS strategically focuses on innovation, performance, and safety. They are as critical as price in the industrial waste sector, enabling IWS to maintain its competitive edge.
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Threat to New Entrance |
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A new organisation in the industry requires considerable capital and resource investment. Customers highly emphasise experience and understanding of the industry. |
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Cleanaway will face a low threat of new entrants if the existing regulatory framework imposes specific challenges on new firms interested in entering the market. In this case, new organisations must fulfil strict regulatory requirements, which may discourage certain players from entering the market. |
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Cleanaway can establish long-term contractual relationships with companies to widen access to the target market and minimise the impact of organisations entering the industrial waste sector. |
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Improve the quality, maximise value for money, and set a strong differentiation basis to discourage customers from using substitute products. |
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Threat of Substitutes |
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Substitute products or services offer the same or even superior quality and performance as Cleanaway. |
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The cost of switching to a substitute product is higher due to higher economic costs. |
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Customers cannot compare the same level of quality and performance from substitute products as those provided by Cleanaway. |
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Cleanaway should direct customers by highlighting the experience provided, the value for money, and the higher quality of the products and services compared to available alternatives. |
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Improve quality, maximise value for money, and establish a solid differentiation to deter customers from using substitute products. |
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Bargaining Power of Customers |
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The bargaining power of Cleanaway customers is limited due to minimal competitors in the industrial waste services industry. In addition, the current economic climate in the sector has seen competitors lower their costs to win work, which gives the customer the upper hand in the bargaining position. |
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Bargaining Power of Suppliers |
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Cleanaway holds a strong position, making it costly for buyers to switch due to existing contracts. |
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If Cleanaway is not well-educated, lacks adequate market knowledge, and is not price-sensitive, it automatically strengthens the competitors' position against the organisation. |
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In the current economic climate of the industrial waste sector, there has been an increase in customer demand for services, leading to the opening of multiple work fronts and strengthening Cleanaway's position in the industry. |
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Competitive Rivalry |
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In the industrial waste industry, profitability and margins have decreased due to competitors adopting aggressive pricing strategies. |
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The industry seeks better value for money and improved services, which can lead to fierce competition if customers are not loyal. Low switching costs make it easier for competitors to attract new customers. |
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Competitors with similar market sizes and slowing industry growth tend to adopt aggressive strategies against each other. The competition among existing competitors concerns Cleanaway and its strategic approach to the market. |
7.0 Customers
7.1 Firmographic Segmentation
Firmographics encompass the detailed attributes of firms, enabling the aggregation of individual firms into meaningful market segments. This concept applies to businesses, non-profits, and governmental entities, providing a basis as the business equivalent of demographics for individuals (Smith, 2013).
As highlighted below, four key variables to consider for firmographics are industry, location, size, status, and structure.
Source: Wiglaf Journal What are Firmographics, Smith 2013
Firmographics is the best way to analyse industrial waste variables and offers variable market segmentation for IWS based on business behaviours instead of individual consumer behaviour. This is due to analysing corporations' industrial waste trends, infrastructure maintenance requirements, and project locations around Australia compared to individual consumers.
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Variable |
Summary |
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Industry |
Manufacturing |
IWS provides waste management for production by-products, hazardous materials, and industrial waste recycling. |
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Construction and Demobilisation |
IWS offers specialised services for collecting, sorting, recycling, and disposing of construction debris. |
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Mining and Resources |
IWS tailors waste solutions for mining operations, including handling mining waste and environmental remediation and processing solutions. It also provides industrial cleaning during scheduled shuts to maintain equipments efficiency. |
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Oil and Gas |
IWS handles waste from exploration and production, including drilling mud and oily water. To clean and remove industrial waste from tanks with hydrocarbons to flammable waste. |
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Retail |
IWS can also manage general waste, recyclables, and specific waste streams from retail operations, including cooking oils. |
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Location |
Australian Major Cities |
IWS locations in major city centres focus on efficient waste collection and recycling services due to higher waste generation and stricter regulatory requirements. IWS also manages small retail operations. |
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Australian Rural Regions |
IWS provides solutions that address the logistical challenges and specific needs of less densely populated regions. In the oil and gas and mining industries, many customers are set up in remote locations from Gladstone to Karratha. |
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Industrial Zones |
Provide specialised services for heavy industries in designated industrial zones. |
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Size |
Very Large (Employees) |
Cleanaway has 6,300 employees, which has increased due to acquisitions of companies such as Tox Free, Daniel Health, and Grasshopper (www.cleanaway.com.au). The exact number of IWS employees within Cleanaway is not separated out. |
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Cleanaway has over 250 locations across Australia. Some of these locations are project-specific, such as Moomba, in remote South Australia's Cooper Basin. |
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Status or Structure |
Structure |
Cleanaway is a private limited company which was incorporated on 15 October 1970. |
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Performance |
Financial |
Net Revenue of$2.9 billion.Revenue across all segments is primarily driven by organic growth, price increases and recent acquisitions. |
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Financial |
EBIT Growth of 25.7% in the last 12 months due to increased Solids and Industrial Waste earnings (www.Cleanaway.com.au). |
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Health and Safety |
Cleanaway made strides in health, safety, and environmental initiatives. A branch-led operational excellence approach contributed to positive outcomes across all business units. |
8.0 Critical Success Factors
8.1 TOWS Analysis
The TOWS matrix is used to develop organisation strategies in accordance with the SWOT Analysis. It combines internal and external factors to create four types of strategies: Strengths-Opportunities (SO) to maximise opportunities, Strengths-Threats (ST) to use strengths to minimise threats, Weaknesses-Opportunities (WO) to minimise weaknesses, and Weaknesses-Threats (WT) to avoid weaknesses and threats (Popescu, et al, 2022).
The TOWS analysis is an extension of the SWOT analysis and is used for action planning. It helps identify strategies to maximise the organisation's strengths and opportunities and minimise weaknesses and threats.
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Strengths (S) |
Weaknesses (W) |
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S1- Strong market share S2- Advanced technology and infrastructure S3- Experienced/skilled workforce |
W1- Market Saturation with Competition W2- Regulatory Dependence W3- Operational Costs are High |
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Opportunities (O) |
Strategies (S/O) |
Strategies (W/O) |
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O1 Strategic Commercial Partnership O2 Environment Awareness O3 Innovation in Technology |
SO1- Utilising Advanced Technology SO2- Grow into Emerging Markets |
WO1- Form Industry Strategic Alliances/Partnerships WO2- Reduce Operational Cost through Efficiency/Technology |
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Threats (T) |
Strategies (S/T) |
Strategies (W/T) |
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T1- Increased Regulatory Requirements T2- Health, Safety & Environmental Risks T3- Slowing Economy & Downturn |
ST1- Industry Leader in Regulatory Compliance ST2- Investment in Technology & Assets |
SW1- Market Intelligence / Change Management SW2- Agile Business Model to Adapt to Change SW3- Diversification of Services/Market |
9.0Conclusion/Recommendations
This report aimed to create a market audit to analyse macro and microeconomic environments, including customer behaviour habits, such as segmentation / demographic and buying habits, and how they impacted Cleanaway IWS's performance. Various analysis techniques, including but not limited to PESTLE analysis, Porters Five Forces, and TOWS analysis, were used.
Using the TOWS analysis, three recommendations for consideration have been developed.
9.1 Investment in Technology and Assets
By investing in cutting-edge technology and valuable assets such as robotic cleaning options, Cleanaway IWS can
enhance operational efficiency by minimising the need for resources to physically enter the tank. This can also ensure compliance with regulations, improve health and safety protocols, and enhance customer satisfaction. Investing in advanced technologies and sustainable practices can provide IWS with a competitive advantage and unlock new revenue streams, ensuring its long-term success as an industrial waste management and environmental sustainability industry leader.
9.2 Grow into Emerging Markets
Embracing emerging markets presents Cleanaway IWS with exciting prospects for substantial growth. This move diversifies revenue streams and allows the company to tap into high-demand areas. Moreover, these markets boast increasing waste management needs where less competition may exist with certain government contracts, providing IWS with a strategic edge. Furthermore, Cleanaway's existing labour skills and equipment provide opportunities to venture into non-waste markets, paving the way for new revenue streams.
9.3 Agile Busines Model to Adapt to Change
Developing an agile business model will enable Cleanaway IWS to respond to evolving customer needs nationwide. This flexibility enhances resilience, supports innovation, and ensures a competitive advantage. An agile approach supports continuous improvement and responsiveness, improved quality, reduced project risks, and resource opportunities that may not have been available previously. This can be achieved by removing branch silos and improving internal communication, which will demonstrate to the customer a united front.
11.0 References
Australian Manufacturing. (2024).Cleanaway reports earnings growth and strategicadvancements in half-year results.https://www.australianmanufacturing.com.au/cleanaway-reports-earnings-growth-and-strategic-advancements-in-half-year-results/
Clure, E. (2022).Australian government pledges to recycle all plastics by 2040. https://www.abc.net.au/news/2022-11-15/australian-government-pledges-to-recycle-all-plastics-by-2040/101655630
Danao, M. (2024).Porters Five Forces: Definition & How to use the Model.https://www.forbes.com/advisor/business/porters-five-forces/
Environment Protection Authority Victoria. (2023).Industrial Waste.Industrial waste | Environment Protection Authority Victoria (epa.vic.gov.au)
Gupta, J.L. (2013). Economic and Business Environment.Vision, 17(1), 83-85.https://doi.org/10.1177/0972262912469569
Macquarie. (2023). Cleanaway Waste Mgmt.https://www.macquarie.com.au/assets/bfs/applications/innercircle/retail-newsletter/docs/2023-06/152422.pdf
Mani, R. (2023).The future of tank inspections.https://maritime-executive.com/features/the-future-of-tank-inspections
Popescu, G., & Gasparotti, C. (2022). SWOT-AHP hybrid method for ranking the relaunching strategies of an industrial company.Journal for East European Management Studies,27(4), 709730.https://doi.org/10.5771/0949-6181-2022-4-709
Potter, B. (2024).Five ways to get Australias waste problem under control.https://www.afr.com/policy/energy-and-climate/five-ways-to-get-australia-s-waste-problem-under-control-20231108-p5eikh
Smith, T. (2013). What are Firmographics?.The Wiglaf Journal.What Are Firmographics? | The Wiglaf Journal
