In the chemical industry, executives must often deal with strong interactions between competitors’ behaviors in highly competitive markets. New market entrants, often from Asia; important capacity decisions; sometimes large customers; and the availability of raw materials force companies to reconsider their competitive positioning. This challenge is complicated by the fact that when making decisions in any particular market, competitive reactions in related markets must be considered, both globally and in regard to neighboring products or possible substitutes.
We have been supporting executives in dealing with these special challenges of the chemical industry since 2008. Our quantitative approach to analyzing strategic interactions is particularly suited to these types of complex action-reaction patterns.
Aspects we have dealt with in the Chemicals industry
Commoditization
Asian market entry
Backward integration
Capacity utilization
Product substitution
Customer market power
Competitor overreaction
Market spillover effects
Large capacity investment
Co-manufacturing agreement
Maneuvering in a price war
Using a competitor price shield
Handling a dominant competitor
Assessing a disruptive strategy
Competitive pricing: dynamic strategy
Corporate alignment between divisions
Handling an aggressive competitor
Using swing capacity as advantage
Major asset sales and spin-offs
Pre-emptive capacity investment
Introduction of new production process
Locking in a market against competitors
Industry consolidation and restructuring
Responding to a competitor’s new product
Products / Technology licensing agreement
Effects of competitor vertical integration
Disruptive technology impact and management
Determination of location for new site / investment
Strategic closing of plants / utilization management
New market entry, also from and into foreign industries
Assessment of market / competitive fitness of new technology
Evaluation of new technology introduction on competitive dynamics
Market consolidation and assessing prerequisites for industry recovery
Competitor acquisition: assesing the implications for competitive dynamics
Strategic alliances, joint ventures, and partnering: forming and ending them