Recycling Waste in South Arabia: Analysis of Paper Industry

Waste paper is becoming a primary new substitute for new paper and publishing and packaging industry after the elevated scarcity of softwood. The waste paper collecting gives everyday work to a significant fraction in the population in the notably poor income class. The state of recycling waste paper in Saudi Arabia is described in the folloeing essay. About 80 percent of available waste paper is used in the production of paper. In Saudi Arabia, the use of recycled paper is small as contrasted to other countries. So this provides an opportunity for fresh business people to try into this area. There is an entire scope to venture into this field.

The State of Recycling Waste Paper Industry in Saudi Arabia 

Due to a variation in household incomes in Saudi Arabia, it has created an opening for segmenting some markets along a value dimension. The Paper recycling market has experienced exponential development and growth in the past years due to growing interest over exhausting environmental reserves. And the collection rate is increasing steadily every year. Recycling companies offer some cheap products, some medium-priced ones, and some expensive ones. Saudi Arabia will ban plastic packaging, which will build a more imminent need for paper packaging goods. Increasing demand will raise the need for waste recycled paper in the area.

Saudi Arabia has considerable potential for the recycling business because of the more economical paper recycling charges in the region along with the lower infiltration of the paper recycling organizations in the area. Based on region, the Paper Recycling market is segmented into two major cities: Riyadh and Jeddah.

The latest innovation in the paper production industry is increasingly changing how the publications are sold, and product publishing companies need to discover new novel ways to handle challenges and keep up with the continually evolving industry. Consequently, new technological discoveries have considerably improved consumer behaviors, induced vigorous competition, and driven values downwards, generating complexity and commotion.

In the event of notable provocations happening in many areas, managers should be skilled in assessing precisely where potential lies to learn, not only the intensity of the dominant competing position. The strength of an expected area, like understanding where the power lies, coupled with taking advantage of the company's strengths, can help improve the firm's vulnerability and evade making any wrong actions.

Administrators need to 'integrate, build, and reconfigure internal and external competencies to approach rapidly changing environments', commencing to shifting the new cause of competitive leverage.

Products and Market Description

The Publishing Industry in Saudi Arabia is deemed as a significantly segmented market. Due to the small supply, recycling of paper aid to reduce environmental degradation and reduce the costs of manufacturing. Recycled paper is the primary source of raw material for most Paper mills. The scarcity of the waste paper collecting channels is the most significant constraint on the market.

The development of the Waste Paper Recycling Market is driven by severe environmental concerns. Also, public rules have reduced supplying of raw material for paper manufacture and elevated new paper prices. The growth and development of the market have been driven. Saudi Arabia has boosted the demand for products such as newsprint, packaging, and printing papers to achieve higher literacy levels. The preferences of customers have shifted toward convenient and viable packaging. With regulations of governments on low plastic consumption and low production costs are some other variables that drive market development. The recycling process relies in no small extent on other sectors that involve paper production and usage—the primary areas, namely: Paper manufacturer Hardcover books.

• Wholesale Distribution

Wholesalers buy the products from recycling companies at a reduced price from the retail price and sell to the retailers. The production cost, therefore, should exclude the possibility of using a wholesale distribution channel. The wholesaler does little, if anything, to promote your product. The advantage to you is that wholesalers deal with thousands of product stores.

• Product Distributors

Distributors represent your products to the retailers. They do not buy from you as the wholesaler does but earn a share of the total sale. That commission decreases what you receive for the product. Your price must be high enough to cover the commission, production costs, and provide the profit you need. The distributor actively markets the recycled paper they represent. If your company doesn't have its own sales force, that's a distinct advantage.

• Retailers

Selling directly to the retail product stores is another distribution approach. Though most product stores favor working with wholesalers. The product store purchases from the wholesalers and gets one invoice and sends in one installment rather than keeping track of particular recyclers. Unlike other retail operations, product stores can return products to the wholesalers if they fail to sell.

• Direct to the Consumer

The final option for distribution is direct to the consumer through your website, by direct mail or telephone sales. You must have a payment processor such as a merchant account or through a third party like Paypal or bitcoin.

Competitive Review

• Competitive Rivalry

The rivalry between recyclers hinges principally on types, services, and prices; however, the price factor, necessary for consumers. The majority of set high prices for quality products when first recycled. This is true if considering the 'windowing’ strategy dictating identical tactics used by recyclers to generate most profit out of high quality recycled papers before releasing average quality. This may increase buyer sensitivity over time, leading to seeking low-cost alternatives or open up doors for new companies to fulfill the customers' needs.

• Buyer Power

Publishers customarily buy their products from different market recyclers. A significant seller for the publisher is primarily the recycler benefiting from high prices from the publisher for quality products. By contrast, the publisher’s power remains limited to lower market sourcing, while recycler sources most of the markets comprised of direct to consumer's sales, Colleges, Schools, public libraries, and others. However, handling wholesalers serving the market might induce them to dictate their terms and negotiating better profit margins. This is exemplified by recyclers halving their gross profit with wholesalers. No salient costs of switching appear for both wholesalers and end-users if they are to switch to another recycler.

• Supplier Power

The recycled product industry depends substantially on leading key input customers (publishers); paper and printing; Publishers' popularity is pivotal to product success. They can represent a competitive advantage that alleviates the cost of marketing and publicity for publishers and harvest significant sales volumes; they are paid in advance for the products. A paper supplier with whom publishers usually enter into multiple-years contract source low-quality paper used for paperbacks, the higher quality paper grade used for hardcovers, and larger page size for a photography or art product.

• The Threat of New Entry

Despite the recycling product sector's heavy chain, entry to business represents flimsy barriers; this is arguably related to the nature of the business, which allows newly established companies with moderated cash flow to start competing viably. This could be attained by hiring the required staff, finding publishers with negotiable advance installments, waste paper suppliers. Conversely, new entrants may get involved in the product business at their risks, and peril as a reward depends on controlling different factors to be able to generate a decent profit. Yet, the compensation may not follow, providing that only one product out of the rest considered a commercial success, and intense rivalry may lead to driving down prices, shorten publishing time and elevate the cost of marketing.

SWOT Analysis

The SWOT Analysis framework enables an organization to identify internal strategic factors such as strengths and weaknesses and vital external factors such as - opportunities and threats.

• Strengths

Engagement of a specialized waste paper recycling. Administrative simplification: a single waste management system for all parties involved. Industrial construction firms dedicated exclusively to their core activity

Weaknesses

• Once this strategy depends on collaboration, conflicts between the parties involved are more likely to occur. A coordinating company is indispensable to the waste paper recycling process. If the service provided by the waste paper recycling company is not well executed, waste paper collection can be delayed, affecting recycling activities.
• Opportunities

Public incentives to environmental initiatives such as Industrial Ecology, Cleaner Production, etc. License conditions requiring the adoption of collaboration practices, integrated reports, and waste paper recycling plant.

• Threats

Availability of waste treatment/disposal facilities in the region. Preference for contract agreements in which each contractor is responsible for managing its waste

Marketing Strategy in a Recycling Industry

In a recycling industry, the marketer gets involved in helping determine the potential customers for an individual product. The market size for the recycle paper, and strategy for how best to reach the publishers who might be interested in the recycled paper. Based on the approach, the marketer creates a tactical marketing plan. As many elements of the marketing plan – such as unique advance sales materials, advertising, etc. – cost money, the marketing plan is done in the context of the estimated marketing budget for the recycling.

Marketing Segmentation and Mix Strategy

Paper and paper products are widely used and sought after by several different types of buyers. These include private and public sector printing, publishing and packaging industries, service organizations (like RailwaysHotels, etc.), foreign buyers, paper merchants, and individual consumers like students, writers, and artists. Pulp and paper market can be segmented into six broad categories: Paper merchants, Private organizations. Public sector organizations. Service establishments, Foreign buyers, and Consumers.

• Pricing

The price level and the sales volume together decide the revenue of any business. The marketing process cannot be consumed without the mechanism of pricing the seller and buyer agree to sell/buy at a price acceptable to both. The discounts and credits given by the mills also form part of the price-mix. The current pricing strategy to set the price level that paper recycling industries in Riyadh follow is a competitive based pricing strategy. This is because the data on competitors is readily available due to a large number of competitors that exist within the industry. It also considers costs to set prices for a few products for which either information is not available on competitors, or are costlier to make,

• Promotions

They use multiple media channels to promote their products. This includes traditional media, which consists of an advertisement on television and radio. This is beneficial due to their extensive reach and ability to attract a large number of people. They use online and social media advertising, which is cheaper and profitable due to the increasing usage of the internet. Therefore, they aim at making the paper available in the right place and time. The speed of delivery after the receipt of an order (which refers to timely dispatch) can be a significant factor that influences the relations between producer, paper merchants, and customer.

• Product Mix

By identifying the market segments, we decide on modifications to be made in the requirement of paper with regard to its type, quality, size, grade, weight, and pricing. Currently, the trend of product-mix is shifting towards higher production of packaging and wrapping paper for which the demand has increased, and correspondingly the output of writing and printing paper has become low. Therefore, paper recycling companies in Riyadh focus on product uniqueness ana d authenticity to keep a competitive advantage in there

• Place

Paper companies in Riyadh sell their products through two marketing channels. The first is where it sells directly to its customers online, and the other is where they sell to wholesalers, who then sell to different retailers located all over the country. These then sell to its customers.

Conclusion and Recommendation

Organizations should be designed according to the demands of the situation. Since any organization functions with a particular environment that affects it. Environmental factors will also influence the organization. Thus managers in the industry ought to adopt a broad differentiation strategy based on providing unique products and services that differ from those of competitors.

Managers should capitalize on their online presence. It is a way of building a robust corporate website to market all its products. This is also accompanying products or services to the global market at competitive prices since no value chain is involved except delivery charges and other minor costs. This will eliminate the heavy value chain and expenses and lowering the processing time, therefore removing wholesaler dependence and deal with retailers at lower wholesale prices.

Successively, relying on budget and financial capability, recycling companies should consider investing in their recycling projects at an aggressive rate as an encouragement for customers to invest and purchase. Recyclers should also consider procuring other types of equipment and machinery that serve low-cost and quicker recycling to provide for low-budget consumers.

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