In July 2019, Graphic Packaging CEO Michael Doss was proposing a $600 million investment in a new machine to produce coated recycled board (CRB), a type of paper packaging used for consumer products (cups, cereal boxes, beverage boxes, etc.) that utilized recycled paper as an input. Graphic Packaging was an integrated producer of paperboard packaging for consumer products and the market leader in CRB. What made this decision difficult was that for the past 30 years, plastic packaging had been replacing paper packaging because of its low cost and manufacturing ease. Yet a growing interest in environmental sustainability among paperboard manufacturers, consumer goods companies (immediate customers), and consumers (end users) was creating the possibility of a transition from plastics back to paper-based products. If these trends actually materialized, there would be greater demand for CRB mills that could use recycled inputs and create recyclable products. Was this the right time for a capacity neutral investment (GPK planned to shut older plants when the new one came online) particularly when the sustainability trends were still unclear. By closing older, less efficient mills in favor of a newer, larger, and more efficient machine, GPK could save $100 million per year in costs. In short, this decision had a clear economic benefit as long as sustainability trends continued, competitors did not add new or more efficient capacity, and GPK actually removed existing capacity once the new machine was operational.This case series (there are three sequential cases: a longer A case followed by two shorter cases) has four pedagogical objectives. First, explore industry dynamics (e.g., pricing implications and competitive responses) related to a capacity expansion decision in a commodity business. As part of this analysis, analyze a competitor (the CEO, the firm, and the stated strategy--see Porter's 1980 Framework for Competitor Analysis, for example) to predict if and how it might respond. Second, analyze the construction and dynamics of an industry supply curve, and the potential impact of a new, low-cost mill. Will it provide a sustainable competitive advantage? Third, analyze how leadership evolves over time. In this case, a new CEO must decide whether to make a major investment decision shortly after his appointment or wait until he had time to expand the firm's capabilities, clarify its strategic direction, and understand industry trends. Finally, illustrate a potential investment in the "circular economy" as a way to promote environmental sustainability
