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Garland Steel

Submitted to:

Howard F. Dover MIS 3310 001: Intro Social Network Technology Fall 2012

Submitted by:

Dat Vuong, Lauren Abney, Ryan Blackwood and Haylie Spain

December 18, 2012

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Summary of Findings Encore Recyclers and Action Metal Recyclers are just some of Garland Steels closest competitors. While Garland Steel is unique from its competitors providing both retail steel sales

and also scrap metal recycling services. The downside is that theyre not actively engaged in any type of social media and have been in business for over 35 years. One the other hand, their competitor Action Metal Recyclers is integrating social media tools like Instagram, Facebook, and YouTube into their business strategy. While social media is becoming a trend in business, it is rarely seen in the steel industry where threats of entrants are low. This is due to the fact that there are high entry barriers. Economies of scale must be achieved to maintain profitability alongside with an effective business strategy. The steel industry is an effective indicator of economic progress because of its vital role in infrastructure and economic development.

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Table of Contents

Summary of findings..2 Background Information 4 Problem Statement..5 Analysis of Alternatives......6 Detailed Recommendations....10 Works Cited..12

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Background Information In the end of 2008, the steel industry faced a sharp downturn that led to many cutbacks (Making the Connection, 1). Recycling of ferrous and non-ferrous metals also relies on bulk. If there is an insufficient amount of metals collected, then the costs of recycling exceed revenues no longer provide profitable returns. However, the recycling industry proves to be more competitive with higher recycling rates due to the slow economy. Jay Anast, owner of Alliance, says, Theres a lot more people than it used to be (Alliance Recycling, 1). The city of San Francisco recycles almost 70 percent of their waste and sends the remaining 30 percent to landfills. Fifteen years ago, it was completely the opposite, says Jerry Powell the editor of Resource Recycling Magazine. In reference to social media: it isnt just something to be done like its the end result of a process (Powell, 1). Instead, it is rather a part of business promotion that incorporates advertising, marketing, communication, and creating relationships. Theres the saying sometimes its not about what you know but who you know. By keeping in mind that social media isnt a quick fix and that signing up for numerous networking platforms but still fail to go viral and get the awareness and increased business that theyre after. They have failed to realize that the basis of social media is to connect with other businesses and customers then implement it in conjunction with their overall marketing strategy (Alisanne, 1).

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Problem Statement The recycling industry appears to be increasing and becoming more competitive. In order for Garland Recyclers to have a sustainable competitive advantage, they would need to keep factors such as the rates in which scraps are recycled, sent to landfills, and customer

feedback for improvement in mind when implementing social media into their business strategy. Today, Garland Steel has a Facebook page, but they are not active in keeping it updated. The page lacks displaying a profile picture and has only 32 views with only two page likes (Facebook, 1). Their website is ineffective in providing the essential information upfront, you have to navigate through a cluttered webpage to find important information. The webpage also lacks a mission and vision statement, which are essential to a business. They also have a decently informative YouTube video, which is helpful and informative about what Garland Steel actually does, but it is not incorporated into their Facebook page or Website. If social media tools like Facebook, YouTube, LinkedIn, Twitter, or a mobile application were implemented and actively engaged in to provide increased awareness and communications between Garland Recyclers and other firms and customer; we believe the company would see a favorable increase in sales and profitability due to the influx of new customers and the return of satisfied customers alike. When deploying a social media strategy listening to your audience is key, instead of spending a large chunk of time promoting a firm, it is more important to listen to customers instead of just sending out messages all the time(Alisanne, 1). By listening and hearing their suggestions and feedback you are able to create a loyal following (1) by responding and providing them with value and superior service that drives business profitability. Expectations should be realistic and that a firm doesnt get rich overnight just by actively engaging in a variety of social media

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platforms. Its better to focus one specific channel instead of going for every popular social media platform at once that would prove to be overwhelming and end up hurting the firm

Analysis of Alternatives Primary Target: Households within a 10-mile radius

Population of 1,031,943 people with an average household of 3.655 people (Melissa Data, 1) o 1,031,943people/( 3.655 people/household )= 282,337 households (Melissa Data, 1

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Alternative 1: Facebook

Costs o $3,000-$6,000 a month for 3-6 months to launch a new Facebook Fan Page from the ground-up o $3000 x 6 months = $18,000 (source 6) ROI = 28.7% o 282,337 households (54.69% of U.S. population use Facebook) (source #) 154,410 households use Facebook (.05% new households captured) 772 new customers that generate $30 in revenue each ($23,160 Revenue-$18,000)/$18000 ROI=28.7% Helps to establish a great reputation with customers which is an intangible resource, will develop into capability of effective customer service which is: o Valuable- allows firm to explore new opportunities o Rare- other firms find it hard to properly train employees to think with customer service mindset such as HomeDepot which is doing well o Costly to imitate- not every firm knows how to create an organizational culture that is based on superior customer service o It is substitutable o So VRI only provide it with above average to average returns ; create a temporary competitive advantage Customer service o Scrap metal prices o Recalibration dates o Customer service survey

Alternative 2: Twitter Costs o $2,000-5,000 a month for 3-6 months to launch Twitter and outsource all content creation and customer interaction o $2000 x 6 months = $12,000 (source 6) ROI = 12.9% o 282,337 households (8% of U.S. population use Twitter) 22,587 households use twitter (1.9% new households captured) 429 new customers that generate $30 in revenue each ($13,552 revenue-$12,000)/ $12,000 ROI=12.9%

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Alternative 3: YouTube Costs o $1,250 a day (source 6) Make a 3 to 4 minute video that will rarely need to be updated; every now and then they might narrow down their mission, vision, or achieve a breakthrough within the firm ROI = 44% o 200 views a month for 6 months = 1200 views (.05% captured new customers) o 60 new customers generate $30 in revenue each ($1800 in revenue -$1250)/ $1250 o ROI = 44% For the people that prefer watching a video to get a better perspective of things such as providing DIY videos on how to take apart recyclable objects more effectively and getting better returns when selling scrap metal. Or just want to see the grand scheme of things and how the company works and is based on.

Alternative 4: LinkedIn Is for business to business leads ROI will be above average above 50% but cant be calculated because so many factors come into play here not just demographics. We need to find out more about the firms capabilities and intangible resources such interaction with suppliers and buyers of other firms before coming up with specific numbers. LinkedIn will provides the firm with a sustainable competitive advantage by creating complex interactions with other firms mostly selling scrap metal to another firm or even suppliers to buy in scrap metal even cheaper. Having inter-firm loyalty is more valuable than loyal customers and will produce higher ROI o They say sometimes its not about what you know but who you know. Creates networks and connections with other businesses For efficient, effective, supportive, and mutually beneficial interactions and relationships Social complexity (costly to imitate capability) Rare: only emerges over time so others cant easily posess the same interpersonal relationships even though they are in the same industry o Firm specific knowlege Interpersonal relationships, trust, and friendship among other firms Non-substitutable o Only kind of social media that is best for incorporating all aspects of intangible assets (customer to firm relationships, firm to firm relationships) Since it has all VRIN and will achieve a sustainable competitive advantage and produce above average returns (slide 24 of Internal Environment Powerpoint)

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Alternative 5: iScrap app Reputation with customers which is an intangible resource, will develop into capability of effective customer service which is: o Valuable o Rare- other firms find it hard to properly train employees to think with customer service mindset such as HomeDepot which is doing well Customer service o Scrap metal prices o Recalibration dates New and interesting industry news Customer service survey VRI similar to facebook and only creates above average to average returns; only a temporary competitive advantage

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Detailed Recommendations

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The social media platforms will start with a 6 month trial or even shorter 3 month which isnt recommended because its not long enough to show above average returns from the LinkedIn and Facebook account along with YouTube. Garland Steel should develop a business model that revolves around superior customer satisfaction. Not only is it important to gain new customers, but also retaining existing, loyal customers is also equally valuable. Doing simple things such as remembering the customers names, calling them sir, and handing out coupons further enhances customer satisfaction by creating a unique experience. Staff should be accommodating to customers and help walk them through the buying process and show them ways of how they could disassemble products to help customers make more money and earn higher returns when recycling those certain items. Making sure that recyclers are paid accurately according to weight by recalibrating scales in consistent intervals and posting these events on Facebook provides further firm to customer interaction. Asking customers to complete online satisfaction surveys shows them the areas in their operation that need improvement. Since Garland Steel is a family owned business; they should hold that to the core and include it in their mission statement. Their background, mission, and vision statements should be included in their Facebook and maybe in the various YouTube videos that they produce. A vision statement that invokes emotion is necessary to deepen the connection between consumers and the firm. The website should be updated to become more user friendly allowing users to effectively find what they need by allowing less clicks to access information and resources. While most recyclers are keeping prices confidential and hard to find, posting these fluctuating prices on Facebook shows customers that youre upfront and willing to go the extra mile to accommodate their needs. Facebook will provide as a means of advertising at a very low cost while and earning higher

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ROIs than Twitter and the App which makes it an effective platform for firm to customer

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engagement. It can also update consumers about any industry news that is considered important or interesting. Facebook only provide for a temporary sustainable competitive advantage because it can be imitated by others at a low cost and there are also other subsitutes such as Twitter. LinkedIn earns high ROIs than all the other platforms allows them to create complex interactions with mostly other firms to rise as industry leaders with the social complexity which is a capability that is costly to imitate because interpersonal relationships and trust among other firms create firm specific knowledge that can only be gained through experience. It is hard for others to achieve the connections that a 40 year old company has even if they had signed up for LinkedIn. This makes it non substitutable in the aspect of how it successfully achieves business to business. The fact that LinkedIn will create a valuable, rare, costly to imitate, and non-imitable resource of firm relationships allows it to achieve above average returns and have a sustainable competitive advantage over its competitors which creates value and allows them to rise as industry leaders. Where they can create contacts with new and existing customers to lower costs and achieve greater profit margins. After the 6 month trial, the staff of Garland Recyclers will be trained to handle all the social media platforms on their own and do it effectively and still maintain above average returns using, Facebook, LinkedIn, and YouTube.

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Works Cited

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1."Start Generating Leads... Get Your Scrap Yard Listed TODAY!" List Your Yard on the IScrap App Today. IScrap App, 2011. Web. 19 Dec. 2012. <http://iscrapapp.com/home/jointoday>. 2."Home Magazine Making the Connection." Recycling Today RSS News. GIE Media, Inc, 2012. Web. 19 Dec. 2012. <http://www.recyclingtoday.com/rt1211-rockaway-recycling-scrapyard.aspx>. 3."Garland Steel." Garland Steel. Manta Media Inc., 6 Jan. 2012. Web. 19 Dec. 2012. <http://www.manta.com/c/mm29qzw/garland-steel>. 4.Alisanne, Laura. "InsideOut Solutions." InsideOut Solutions How To Increase Your Chances of ROI Using Facebook Comments. N.p., 8 Jan. 2012. Web. 13 Dec. 2012. <http://insideout.com/blog/2012/01/08/how-to-increase-your-chances-of-roi-using-facebookimw/>. 5.Melissa. "ZIP Codes in a Radius Lookup." ZIP Codes in a Radius Lookup. N.p., 2012. Web. 19 Dec. 2012. <http://www.melissadata.com/Lookups/zipradius.asp?zipcode=75042>. 6.COLLIER, MACK. "How Much Does Social Media Cost Companies in 2012?"MackColliercom Social Media Training and Consulting RSS. N.p., 2011. Web. 11 Dec. 2012. <http://www.mackcollier.com/cost-of-social-media-in-2012/>. 7.Schottmuller, Angie. "Social Media ROI: How To Define a Strategic Plan." Search Engine Watch. 55 Broad St, 22nd Floor, 4 Sept. 2012. Web. 17 Dec. 2012. <http://searchenginewatch.com/article/2202307/Social-Media-ROI-How-To-Define-a-StrategicPlan>. 8. Edwards, Jim. "This Deck Shows Whether The Billions Pouring Into LinkedIn, Facebook, Twitter Are Worth It." Business Insider. Business Insider, 29 Sept. 2012. Web. 14 Dec. 2012. <http://www.businessinsider.com/social-media-roi-slideshow-2012-9?op=1>. 9. Fisher, Lauren. "The ROI of Social Media: 10 Case Studies." TNW Network All Stories RSS. N.p., July-Aug. 2011. Web. 13 Dec. 2012. <http://thenextweb.com/socialmedia/2011/07/16/theroi-of-social-media-10-case-studies/>. 10. Mershon, Phil. "26 Promising Social Media Stats for Small Businesses." Social Media Examiner RSS. N.p., 8 Nov. 2011. Web. 18 Dec. 2012. <http://www.socialmediaexaminer.com/26-promising-social-media-stats-for-small-businesses/>. 11. Howell, David. "How to Measure the Effectiveness of Social Networks." TechRadar. N.p., 11 Oct. 2012. Web. 12 Dec. 2012. <http://www.techradar.com/us/news/world-oftech/roundup/how-to-measure-the-effectiveness-of-social-networks-1103604>.

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12. Woltjer, Jesse. "Should You Outsource Social Media?" CleanTech Media Solutions. N.p., 2012. Web. 13 Dec. 2012. <http://www.cleantechms.com/about-us/advantages-of-outsourcing/>. 13. Goldfield, Ali. "Why Many Small Businesses Fail at Social Media." Social Media Today RSS. N.p., 1 Oct. 2012. Web. 15 Dec. 2012. <http://socialmediatoday.com/adr101/860776/whymany-small-businesses-fail-social-media>. 14. "How Much Time, Money Do Small Businesses Spend on Social Media? [Infographic]." VR Marketing Blog. VerticalResponse, 31 Oct. 2012. Web. 14 Dec. 2012. <http://www.verticalresponse.com/blog/how-much-time-and-money-do-small-businesses-spendon-social-media-infographic/>. 15. Kimmons, Ronald. "How to Start a Recycling Business in Texas." Small Business. Hearst Communications, 2012. Web. 14 Dec. 2012. <http://smallbusiness.chron.com/start-recyclingbusiness-texas-18457.html>. 16. Bennett, Shea. "43% Of B2C Marketers Have Used Twitter To Generate Leads [REPORT]."AllTwitter. N.p., 18 Sept. 2012. Web. 12 Dec. 2012. <http://www.mediabistro.com/alltwitter/social-media-leads-sales-b2b-b2c_b28597>. 17. Sullivan, Danny. "Survey: Facebook Best For B2C Sales and Leads; LinkedIn For B2B."Marketing Land. N.p., 30 Aug. 2012. Web. 19 Dec. 2012. <http://marketingland.com/survey-facebook-best-for-b2c-sales-linkedin-for-b2b-20219>. 18. "Garland Steel." Garland Steel. Garland Steel Inc, 2008. Web. 18 Dec. 2012. <http://garlandsteel.com/index.php?option=com_content>.