1. Euan Walker CalderglenHighSchool
Introduction
My aimof this reportisto see if it wouldbe beneficialforHighlanderInternational toexpandits
premises. Ihave chosentolookintothe expansionof Highlanderastheyhave beenaroundfor
fourteenyearsandstill onlyhave one premise. Byexpandingintomore thanone premisethen
Highlandercouldtransformintoamultinational.Byturningintoamultinationalitwouldbecome
easierforthemto gainmarketdominance.There are somay benefitsof becomingamultinational
some of whichwouldbenefithighlandergreatlyasmaterial andlabourcan be cheapercostingthe
businesslessandincreasinghighlanders’profits.Highlanderwouldalsobe able totake advantage of
transferpricingbetweencountriesdue todifferentlawsandtariffs. Iamgoingto use a SWOT
analysistohelpme illuminate the Strengths,Weaknesses,Opportunitiesand Threatsof expanding
the business.Throughthe use of SWOTanalysis,Iwill be able togaina substantial amountof
information,allowingmyreporttobe more accurate.My conclusionscaneasilyandeffectivelybe
drawnup as I can selectinformationwithease,since theyhave been separatedintosubheadings
(Strengths,Weaknesses,OpportunitiesandThreats).
I have chosento doa reporton HighlanderInternationalasIam currentlyemployedthereandhope
to workthere inthe nearfuture (afterUniversity).Ihave beenworkingthere foralmosttwoyears
nowand hope to stayworkingthere.The reasonI am sodedicatedtoHighlanderInternational is
that itis personal tome as I have familythatworkthere.
HighlanderInternational isaPublicLimitedCompanyplc,whoare familyrun.Theycurrentlyhave
twofamiliesinthe business- Bingham’sandO’Brien’s- andhave beennominatedfor bestfamilyrun
businessawardinSouthLanarkshire.Theystartedin2002 and are still operatingbutonlyonamuch
largerscale.
Background information
Highlanderinternationalisaprivate limitedcompanyltdthatstartedin2002 and has continuedto
grow fromhome workingtoowingitsownpremises.Highlanderworkinfunctional grouping
allowingeveryonetobringtheirskillstothe table tohelp improve the qualityof workordecisions
beingproducedordecided. Howeverinsayingthat,all final decisionsare made the boardof
directorswhohave the final saywhichsuggestsahierarchical structure isalsoinuse.
Highlanderismade upof two differentjobs- Yardstaff,whohandle the paperandthe other
materialsHighlanderrecycle.Theyare keyforthe successof Highlander,asitisthemwho
determine the successof the business.The yard staff has increasedsignificantly sincethe business
startedto theircurrentpositioninthe market.The othertype of staff is office staff.Theytooare
importantinthe runningof the businessastheyensure the businessmaintainsagoodrelationship
2. Euan Walker CalderglenHighSchool
withtheircustomersandsuppliers.Theyensure thatHighlandercontinuetodobusinessbycreating
workfor the yard staff. The yard staff has more levelsof authoritytogothroughthan that of the
office staff.Thismeansthatthe Yard staff have a longerwaitingtime whenitcomestodecision
makingthanthat of the office staff.Thismeansthatthe businessisn’tbeingfullyefficient whenit
comesto workas there are manylevelsof commandtogo through.
Chainof command withmanagers:
The company hasa wide spanof control allowingemployeestouse theirinitiative where neededbut
alsomeansthat employeescan’talwaysbe supervisedwhichmayinvolve workersbeingidle. This
alsoencouragesthe employeestoworkharderastheyhave more of a chance of beingpromotedto
a managerof supervisor;thisisagood thingforthe businessasthe efficiencyof the workers
increasesallowingthe businesstocontinue toworkata fasterandmore efficientway. Highlander
offermanydifferentservices,whichhasexpandedoverthe company’slifetime.All the services
offeredbyHighlanderare
Waste Paper collection and recyclingservicesacross Scotland
Suppliers of a variety of recyclingequipment and machinery
Boardof
Directors
Brian Bingham
Sales director
Margaret
Bingham
Weighbridge
operator
John Aedy
Commercial
Manager
StephenDuffy
PurchasingDirector
Lewis
Bingham
Quality
Assurance
Manager
Angus
Cameron
Wharehouse
Manager
Shirley
Rowan
FinanceManager
Geraldine
O'Brien
Business & Marketing
Leah
McJimpsey
Operations
Manager
Tracey
O'Brien
Security
Shredding
Manager
3. Euan Walker CalderglenHighSchool
Security Shredding/ Document & paper destruction services
Reel handling,splittingand recycling(All shapes & sizes)
Paper based product destruction services (E.g. books)
Comprehensive waste auditand analysisservices
Officearchivebox clearanceand shreddingservices
All of whichare takenfrom:www.highlanderinternational.co.uk/recycling-services.html.
Highlanderaimstoproduce a highqualityproductall the time.Qualityisessential inthe workplace
as it hasgivenHighlanderthe name ithastodayas the largestpapermerchantinScotland.Qualityis
one of the mainaimsof HighlanderInternational andtheyensure thisqualitybytrainingtheirstaff
withbothoff-the-jobtrainingandon-the-jobtraining.Theytraintheiroffice staff byeitherlearning
off of theirmanagersorby sendingstaff tocollege wheretheycanearna qualificationandtherefore
will be more likelytostayinthe companyas the feel appreciatedandare grateful forthe
qualification.Justlikethe office staff,the yardstaff alsotrainedonbothmachinesandvehicles.They
are able togain licensesthroughthe companywhichtheywill have forever.Thisnotonlybenefits
the staff but the businesstoo.The staff gains a licence butthe businessgains loyaltyfromthe
employeeswhichcanalsoimprove the workefficiencyfromthe employees.
Highlanderalsoaimstogrow itsbusinesscontinuallyimprovingitscurrentstatus.Highlanderhave
come a longwayin 14 yearsfromworkingat home witha staff of two,to a now successful business
whichhas greatpotential withstaff reachingoverten10 timesof the startingstaff.Recently
Highlanderhasexpanded itscurrentmarketasithas introducedanew market“SecurityShredding”.
It has alsointhe pasttwo yearsboughta whole complex sincebeforethattheysharedacomplex
withanothercompanythat wentintoadministration. Highlander hasgrowna lot since the creation
of the companyand aimto grow evenfurtherinthe future.
4. Euan Walker CalderglenHighSchool
Analysis & Interpretation
From mySWOT analysis(appendix 1) Ihave foundthat Highlandertake qualityveryseriously.They
ensure thatboththeirproductsand theirstaff are well trainedinthe line of workthatthe do.
Highlandermaintains ahighquality of staff bytrainingthem bothon-the-jobandoff-the-job,this
ensuresthatthe employeesknowsthe knowledge of theirpositioninthe businessandalsolearns
howthe businessoperatesandhowtheydeal withwork. ByensuringHighlanderhave agreat
customerservice theycancontinue tobuyand sell fromtheircustomer/suppliersandgrow even
furtherfromwhere theyare at now. But withexpandingtheirpremisesintoEurope orevenif they
wishto stayin the UK, the likelyhoodof receivingcustomersis higherwiththeirqualityof service
that theyprovide. If theywere toexpandintoEurope theycouldtake advantage of totransaction
costs therebyincreasingtheirprofits.AlsoEurope hasahuge economyandmarketwhichwouldbe
great forhighlandertotake advantage of as theyalreadydobusinessinpartsof Europe.PHS hasn’t
yetstarteddoingbusinesswiththe restof Europe butwithtime theywill start,soHighlanderstill
has the advantage sofar. Europe s a fantasticresource forsearchingfornew skillsandtalentsand
offersbusinessesnewinsightsintothe workingsof abusiness.ByexpandingintoEurope Highlander
will be able toemploypeoplewithmore/newskillsthatcanhelpinthe growthof Highlanderand
allowitto become more efficientandsuccessful.
Highlander’sgrowthhasbeendue totheirhighqualityservice,butPHScan’tsay the same as they
have a poor customerservice (appendix2). The majorityof employeestheresaythatmanagementis
poor andthat theydon’tfeel respectedintheirline of work.Motivationiskeyforanefficient
business,withoutitpeopledon’ttrytheirbestandtherefore make mistakesandthe qualityof work
decreases.If PHS wantsto continue togrow at the fastrate theyrate theymustensure employee
satisfactionotherwise theywillfindthemselvesinabadsituation. Notonlywill Highlanderhave
access to a huge marketbut theywill alsohave the opportunitytoseekoutcheaperlabouras
countrieshave differentlawsinplace aboutthe minimumwage etc.Thiswill alsobe anincentiveto
employeesasHighlandermaypaythemmore than what theyexpecttogetpaidin otherjobs,butis
lessthanwhat employeeswill be paidinthe UK,therefore increasingHighlandersprofits.
Highlanderstartedoutintheirhome andnow fourteenyearslaterhave one premise,butwithmy
research(Appendix 1,2&3), I foundoutthat Highlanderwouldgreatlybenefitwithexpansionif they
wantto compete intoday’smarket.Highlanderonlyhave one branchinthe whole of the UK,which
isa majordisadvantage tothemas PHShave overthirty(appendix 2) branchesoverthe UK and will
sooneror laterbe headto headwithHighlander. Withonlyone branchHighlanderwere abletoturn
over£8 millionpoundslastyear(Appendix 3),whereas PHSturnedoverawhopping£422 million
lastyear.This showsthatHighlanderare waybehindinmarketshare comparedto PHSand that the
onlywayHighlandercancatch upand possiblycompete istoexpandtheirpremises, otherwise ina
fewyears’time highlandermayfindthemselvesstrugglingasPHSwill soonbecome the dominant
competitorinthe market.
In sayingthatHighlanderare doingreallywellIntheirlocal marketjustnow as theirstaff has
increase fromsix totwentyinjustone year.This issolidevidence provingthatHighlanderis
expandinginarapidpace andthat the nextstepisto opena new premise. Bybecominga
Multinational businessHighlanderwouldgainabettername foritself andbecome more well known
aroundEurope. This thenallowsthemtotake advantage of the huge market the Euro providesand
5. Euan Walker CalderglenHighSchool
allowsthemtoexpandtheirbusinessevenfurther.Highlanderwouldalsobe able toincrease its
profitsdue totransferpricing.HoweveraproblemwithexpandingintoEurope isthatone premise
will be usingpoundssterlingandthe otherwill be usingeuros,whichwouldcostthe businessmore
moneydue totransactioncosts and the accountsof the business.
PHS has expandedrapidlyoverthe pastdecade throughexternal growth(appendix 2),theyhave
continuedtobuyoversuccessful small businessessuchas“phoenix shreddingandshredeasy”.This
methodof expansionhasbenefitedPHSmassivelyastheydon’tneedtoputany more money into
the business,asthe formerbusinesshasalreadybeendoingwell andtheirtechniquesseemstobe
working(the onlythingthathaschangedis the name of the business). Whereasif PHShadto buya
newpremise andstartfrom scratch itwouldcost thema fortune astheywould needtotrainstaff to
do theirjob,whichwouldtake time andmoneyeachone costingthe business.Theywouldalsohave
to purchase all the latestmachinerysotheycan produce a highqualityproductthatis upto the
same standardas the restof theirbranches.All of these thingstake time andmoney,somethingthe
businessdoesn’twanttowaste.Thatis whyexternal growthisafar bettermethodof expansion.
That is alsowhyPHS hasexpandedsoquickly,withthe successof the smallerbusinessesandwith
helpof managementskillsandmarketawareness(Reputation)theyhave developedintoahugely
successful business.
Highlanderonthe otherhasn’texpandedinthe same wayasPHS. PHS tookthe external growth
methodwhereas Highlanderdecided differentlyandtookthe organicmethodof expansion.Inthe
lastfewyearsHighlanderhave increasedtheirproductportfolio(appendix 2).The new recent
marketHighlanderhave enteredissecurityshreddingwhichhasbeenahuge successfor them.This
isjust one of the marketsHighlanderhasexpandedinto buttheyhave othermarkets too.Theyhave
beensuccessful inthese marketsastheyhave keptthe same staff whotheytrustand the staff trust
Highlander.Organicgrowthdoestake alongtime to expand asit takestime topurchase and train
the staff on the newmachinerywhichcanbe expensive.Since Highlanderspecialise somany
marketsthe amountof competitorstheyhave increases(appendix 3) butthisalsogivesHighlander
the chance to expandtheircustomerbase evenfurther.Astheymayofferabetterservice to
customerswhoare withthe competitors,givingthemthe chance toincrease theircustomerbase.
PHS has branchesall overthe UK, but thatis because theyonlydobusinessinthe UK(appendix 2),
but Highlanderdeal inthe UKand Europe but onlyhave one branchwhichisin Scotland. Highlander
wouldbenefitfromanexpansion,eitheranotherone inthe UKor one inEurope (appendix 1&3).By
havingmore branchesHighlanderwouldbe able toincrease theirsize,possiblytothe size of PHS.
But whattheymust make sure whenexpandingistonot letqualityslip,asPHScurrentlydoesn’t
have a good reputationfromtheiremployees.If HighlanderexpandintoEdinburgh,theywould
benefitgreatlyastheywouldcoverthe wholecentral beltof Scotlandmeaningthattheycould
potentiallygainthe majorityof the Scottishmarket.bycontrollingthe central beltof Scotland,itis
crucial as all businessthatgoeseithernorthorsouth mustgo throughthe belt.Alsoitwouldattract
more salesas itis easyto getto, since the motorwaysandothermainroads passthrough thatpoint.
6. Euan Walker CalderglenHighSchool
Conclusions and recommendations
Basedon the informationIhave found frombothappendices1,2 and three,Iwouldrecommend
that Highlanderplantoexpandtheirpremisessoonif theywishtosee theirbusinessgrow.Notonly
will Highlandergainalargerclientlistbutwill alsobecome more knownandtheirreputationwillbe
knownto a widerrange of people.People like businesswhoare loyal andwhocare a bouttheir
service more thanthe profitswhichisexactlywhatHighlanderstandsfor.Theyputthe productand
the customerfirstinfront of the moneyaspectof the job.WithexpansionHighlandermaynot
receive highprofitstobeginwithastheirstartup price will be alot andfindingbusinessthere may
take a while.Howeverwiththe evidence I’vefound,Highlanderwouldstarttogainmore customers
and withthatmore salesandprofits andbecome assuccessful astheir home premises.
I wouldalsorecommendthatHighlanderlookintopossiblyexpandingthroughexternal growthasit
will allowtheirbusinesstogrowfastand it wouldmostlikelybe cheaper.Astakenfromthe
informationfoundfromPHS,theyhave become very successfulintheirexpansionthroughexternal
growthand thiswouldultimatelyworkforhighlandertoo. PHShasboughtovermultiple businesses
overthe UK which hasbeensuccessful forthem,sosurelywiththe same thoughtitwouldworkfor
Highlandertoo.If Highlanderwere totakeoverasuccessful businessinEurope (preferably
businessesthatuse euros’),theywouldbenefitgreatlyfromitasit couldprovide Highlander withan
insightintothe market.Theycouldadvise Highlanderaboutthe competitiontheyface inthe market
and whatthe customersappeal to.ThiswouldbetterHighlandersgrowthastheywouldbe able to
maintainIhighstandardthroughouttheirexpansion.
Highlanderwouldbenefitfrombecomingamultinational asitwouldallow theirbusinesstobecome
more knownworldwide.Theywouldbe able toproduce theirproductsinlessdevelopedcountries
at a smallerwage,therefore increasingtheirprofits.Their home country(Scotland) will be stayin
Scotlandas itis a strong home groundfor it and theycurrentlyhave astrong steadyflow of
customers.Theyhostcountrywill be there toexpandinEurope mainland,bykeepingthe customers
theyhave currentlyandto gainmore,but to keepthe highstandardof work. Highlanderwouldbe
able to use transferpricingtoincrease theirprofitsintheirHome country.
AlthoughPHShave branchesall overthe UK, theydo nothave the highreputationof Highlander,but
intheirdefence the reputationwillvarya little due tothe wide spreadof areasthey cover.Theyare
currentlywayaheadof Highlanderandsoonwill have the opportunitytoeithertake themoverorto
decimate them.Highlandercurrently isn’tathreatto PHS butif theywere toexpandasquicklyas
PHS has overthe fouryearsthentheywill become verydangeroustoPHS.
7. Euan Walker CalderglenHighSchool
Appendix 1
Strengths
AllowHighlander to take on more work and increase
their profits and market share.
AllowHighlandertoemploymore staff andgain
more assetsmakingthe company gainmore of
reputationdue to higherqualitywork.
Able toprovide more servicestotheircustomers
Allowhighlandertoexpandtheircustomerbase
as theywill be able towidenouttheirbusiness.
Highlanderensuresthatthe customershave a
goodservice andare pleasedwithit.
Weaknesses
The Cost of new premises canbe expensive and
the moneymightbe put to betteruse elsewhere.
The additional costof runningthe depot will
increase astheywill now have twodepots
insteadof one.
The extra costsof startingupa depot will
increase asstaff needtobe employedand
trainedtoa highstandard.
Opportunities
Will allowHighlandertocontrol the central belt
of Scotlandastheywill have depotsinboth
EdinburghandGlasgow,whichiseasyfor
customersandsupplierstoreach.
Threats
By openinganew depotHighlanderwill face new
and more competitionwhichmaycause them
problems.
PHS Datashredare one of theirbiggest
competitorswhohave the majorityof the
market.
8. Euan Walker CalderglenHighSchool
Appendix 2
http://www.shredding.info/our-services/areas-we-service.aspx:Complexes inthe uk: Only the highlighted ones are PHS
complexes which is a total of 37 branches around the UK.
http://www.highlanderinternational.co.uk/: Highlander business in countries: Highlander operate in “Exporters of
recovered paper to the Far East, UK and Europe” but only have one branch which is in Scotland.
http://www.scotsman.com/business/management/highlander-aims-for-more-of-foreign-recycling-1-2912448:Expansion
of Highlander: With the introduction of new machinery Highlander are increasing the amount of business they do over seas.
http://www.walesonline.co.uk/business/business-news/phs-datashred-completes-second-acquisition-1849239: Datashred
expansion threw takeovers in UK businesses: “PHS has acquired Milton Keynes-based £1.2m turnover business Shred
Secure”, “The deal follows the acquisition of Manchester-based Shred Easy, a £7m turnover business.”
https://www.insidermedia.com/insider/southwest/83975-phoenix-shredding-sold-phs-datashred:“PHSDatashred has
expanded its reach in the South West with the acquisition of Exeter-based Phoenix Shredding”.
http://www.highlanderinternational.co.uk/company-news/highlander-international-euwid-interview.html:Interview with
Stephen on expansion plans: “20 staff – this is anincrease from just 6 last year.”(2014)
https://www.glassdoor.co.uk/Reviews/PHS-Reviews-E14405.htm:PHS poor customer care.
9. Euan Walker CalderglenHighSchool
Appendix 3
1. Who are Highlander’sbiggestsupplierand where are they located?
2. What are the benefitsofHighlanderopeninganotherpremises?
3. What are the possible costs/setbacksof expandingHighlander’spremises?
4. If Highlanderwere to expandwhere would be the most suitable location?
5. Whoare Highlander’sbiggestcompetition?
6. Whoare Highlander’smainstakeholders?
ArjoWigginsMill – locatedinAberdeen.
Coca Cola& Encase – East Kilbride.
CAPSCASES – Glasgow
Saica - Croy
, , ,
Thiswill allowHighlandertotake onmore work andexpand.Withanotherdepotopenthiswill
allowHighlandertoemploymore staff andgainmore assetsmakingthe companymore valuable
and able toprovide a more advance all roundservice.Anotherdepotwill allow highlanderto
expandtheircustomerbase astheywill be able toservice new surroundingareas. Highlander
have a turnoverof £8 million.
The Cost of newpremises(i.e.buildings)
The additional costof runningthe depot(Electricity&Rates).
The extra costsof startingupa depot(new staff training&new equipment)
Openinganewdepotalsoopensthe companyupto new local competitorswhommayalready
have a grasp on the market.
Outside of Edinburgh(Broxburn)asthisallowsustotake advantage of havingthe abilitytoget
the city’smarketwithouthavingtopay the highcosts of beingstationedinthe city.
In Scotlandourbiggestcompetitorsare:
SmurfitKappaRecycling,PHS& Shredit.
Shareholders,Employeesandourcustomersandsupplierswhorelyonusto supplya service
and qualitygoods.
