ANA GABRIELA ARELLANO
Jorge Tellez
Rafael MorenoT
EGADE Business School Tecnologico de Monterrey
MARTIN H BREMER
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The competitive advantage for Peliculas y Embalajes is based on the flexibility in the formulation process that allows the company to produce the exact type of film that the customers need, according to the quality, cost, and environmental needs.
The inclusion of recycled material in the formulation is a key capability of the company and allows it to set the stretch wrap cost and discounts upon the use of recycled material. Both the plastic per se, or the carton core.
The discounts are the incentives the customers experiences to participate in the recycling campaigns.
Customers are educated to use the new material and preserve the residues, then Peliculas y Embalajes recollects the material and buys it as residue product from the customers.
The customer would recover 5 Mexican pesos per kilo of the plastic material to be recycled, which generates a triple positive impact:
a. Avoids waste disposal services
b. Recovers part of the original acquisition cost
c. Enables the customer to get a discount for the new purchases of about 9-10%
The cost of new material is on average about 35 pesos/kilo, then the total economic impact for customers participating in the recycling campaigns might get up to a 24% discount.
Back in the supply chain, the carton “core” can also be recycled. This is done by shipping the recollected cores from customers to the core supplier, which also benefits on the same discount mechanic.
An additional activity is that the company hires local people to sustain growth in the community.
New raw material mixed with recycled material that was recollected from customer residues is transformed in new product which is sold to same customers at a discount price.
The founder and owner Inspiration for this innovation came from the discipline that soccer provided to him, as he practiced it a lot during his youth. As he said in the interview that was a motivation to help the community and the environment.
He is very driven to help the customers to get a product at a discount rate, all of these while making a profit.
The short term effects are as follows:
The overall impact is three-fold, there is economic impact to the company by reducing the operational costs and saving money on buying new raw material.
There is social benefit because the company hires local people and also uses some of the money for non-profit activities like sponsoring a local school.
There is also an environmental benefit because waste is reduced and re-utilized.
For long term effects, it is expected that community benefits from a stable working environment and economic benefit.
The main overall impact is the innovative business model that consists on the following activities:
a. Buying the residues from the customers.
b. Re-processed them again mixed with new material at a 70/30 ratio.
c. Sell plastic back as a finished product to the same customers at a discount rate.
Additionally, Jonathan Martinez has learned that sharing part of the profit with the community and his workers is key to get a balance and keep growing in a healthy way.
Then, he tries to hire as much as possible people from the same community, increasing the local impact in different ways, creating jobs, and reducing transportation needs.
The environmental benefits come by reducing use of raw material, and increasing the recycling rates of plastic wrap. In other words, there is less plastic being dumped into the environment and in local city dumps.
The society benefits with the increased number of local jobs created as the business grows and it also benefits economically to get a lower price on these products.
As a non-profit activity, the company also impacts the community by helping a local school – kindergarten – with labor initiatives in coordination with his associates and school parents. They would work on maintenance activities to improve the quality of the facilities.
Jonathan is also helping through some scholarships granted to his associates’ sons or even to suppliers’ sons, again as a non-profit activity.
They also collaborate with the community, cleaning a local municipal abandoned land, and facilitating this for the use of the people.
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Peliculas y Embalajes is a Stretch Wrap Plastic manufacturing company, created in 2011 by Jonathan Martínez Monroy. The company´s core business is the plastic film manufacturing, using an extrusion process to produce stretch wrap with a formulation.
The formulation includes between 20% and 35% of recycled plastic material which is recollected to existing customers through recollection campaigns.
