Premium Essay

Business Analysis - Dow Chemical

In: Business and Management

Submitted By clange
Words 1771
Pages 8
Dow Chemical - Business Analysis Part 2
Historically, the chemical industry has operated in a competitive environment, which is not anticipated to change. Dow experiences significant competitions in each of its operating segments as well as in each of the geographic areas in which it operates. Dow competes globally on the foundation of quality, technology, price, and customer service and operates in an integrated manufacturing environment. Basic raw materials are processed through many stages to produce many products that are sold as finished goods at different points in the process. Dow has two major raw material streams that feed the production of the finished goods which are chlorine-based and hydrocarbon based raw materials. (Dow Chemical Company, n.d.)
Business Environment The business environment of Dow is one that has strategically positioned itself to withstand the ever-changing forces of economic, social, political and technological factors it faces daily. Dow consistently identifies opportunities and new technologies before its competition which stimulates their industry-leader position. (1)
Financial Health Dow has great financial strength. Their sensible financial discipline has proven beneficial in recent global economic challenges and has actually helped position it for future growth. The recent global economic challenges forced Dow to take steps towards strengthening and diversifying its portfolio. The company has come out on the other side of the challenges with a portfolio that is better equipped for economic uncertainties. (Dow Chemical Company, n.d.)

During 2011, Dow:
• had double-digit gains in revenue and earnings per share
• posted record revenues at a Company level, as well as in emerging geographies
• introduced “game-changing” investments and partnerships that will allow the Company to capture more demand in the…...

Similar Documents

Premium Essay

Ratio Analysis of Kohinoor Chemical

...Bangladesh University of Business & Technology {BUBT} REPORT ON Ratio analysis of KOHINOOR CHEMICAL Submitted To Ms Reshma Nowreen Lecturer on Finance Bangladesh University of Business & Technology (BUBT) Submitted By: Group Name: SNOW WHITE Intake : 22nd Section : 03 Program: BBA Course Title: Managerial Finance Course Code: FIN 302 |Name Of Group Members | |ID No | | | | | | | |Md. Tafazzal Islam | |09103101127 | |22nd ...

Words: 6314 - Pages: 26

Free Essay

Dow Case Analysis

...This will provide a summary of the bid proposal to Dows headquarters for PBB by Vignart and Mercer, for a partially state and privately owned petro-chemical company in Bahia Blanca, Argentina. Bahia Blanca is rich in resources having access to Argentina’s largest gas basins making it an optimal location for a plant; which presents a great acquisition opportunity for Dow. The acquisition also provides Dow with exposure to the growing Ethylene and Polyethylene business in Argentina keeping them a world leader in the chemicals industry. The chemicals and plastics industry consisting of the production of ethylene and polyethylene can be very profitable. Ethylene is used to produce polyethylene; polyethylene is then used to produce plastics by manufacturers for household goods that we use every day, a few examples are the plastic gallon milk container, trash bags, and plastics for grocer foods like bread. The drivers of profitability are: size of the plant-larger plants produce more decreasing cost and impacting profits, capacity addition and reductions impact supply and demand, production cost-crackling naphtha is more expensive than cracking ethane to manufacture, global operating rate has a direct correlation with ethylene profitability. Dow has been the US leader in chemical and plastic manufacturing. Dow will have to consider prospective bidders, the quality of the manufacturing facility, uncontrollable risk like currency fluctuations and government policy impacting foreign...

Words: 361 - Pages: 2

Premium Essay

Business Analysis

...Business Analysis Part II Anikki Manasseh MGT/521 October 29, 2012 Richard Bowman Business Analysts Part II Introduction In the world of business one has to try and stay ahead of the next company especially if they are in the same league. Nothing is ever guaranteed and in a world that is constantly changing it is best to stay one step ahead of the competition. The Fortune 500 list has companies who have made an impact on the economy and have continued to grow over the years to show improvement. One such company is ExxonMobil who retained the prestigious spot of number one for this year. However, there are other companies in the same field that are considered rivals but they also continue to strive and push forward. This paper will discuss the comparisons with the other companies in the same field. Also the financial health of said company, any technological advances, how globalization has affected the company’s business strategy and a bench marking analysis. Hess Corporation As one of the more notable competitors for ExxonMobil, this is a company that does have some extensive history behind it as well. It does have its place on the Fortune 500 list, however the number is quite down and not as high as s tome might think. This is a company that has marketed gasoline throughout more “1360 Hess gas stations in 16 U.S. states and operates a 50% owned oil storage terminal in the US......

Words: 2260 - Pages: 10

Premium Essay

Soren Chemical Case Analysis

...SOREN CHEMICAL CASE ANALYSIS INTRODUCTION Case is about the company Soren Chemical and marketing swimming pool clarifies to the B2C market. Initially this company was in B2B. The B2B pool clarifier names Kailan MW and it is sold to Commercial Pools and Water Parks. Kailan MW has USPs like: 1. Attacks organic contaminants which can escape conventional filters 2. Larger effective period 3. Lower quantity required In September 2006, Soren Chemical had launched Coracle, a new water clarifier for B2C. This product has the same USPs like a Kailan MW. Soren was inexperienced, because B2C has big differences than B2B. Eventually, they totally failed, because of a lot of strategic and tactical problems. Strategic problems 1. Their expectations were more than actions. The target was 50,000 gallons for the first year of sales. But through the first half of the selling season for pool chemicals, Soren had sold just 3,725 gallons. They were inexperienced in B2C business and did not do well enough promotion company. 2. Go-to-market strategy. The selling season for residential pool chemicals starts in spring. Soren started in May, when most pool owners have already bought another product. If Moritz identified the problem, she could salvage 2007 and position Coracle for a successful second year. Tactical problems In my opinion, the main problem is Soren Chemical did not have enough experience for begin this new business. As a result, they had a lot of......

Words: 640 - Pages: 3

Free Essay

Dow Chemicals

..._______________________________________ (1-5 scale; 5 = excellent) : 5 Assignment Being Discussed : Dow Chemicals Group work: Why is there a move towards splitting the upstream and downstream divisions? 1. The overvalued acquisition of Rohn & Haas increased Dow Chemical’s debts, which further led to a reduction in their margins. Due to this sticky financial situation, they were unable to capitalize on the boom in cheap shale gas. Further the overvalued acquisition had reduced their working capital and this also resulted in suspension of their dividends. 2. To increase transparency in the transfer pricing for the materials that are being supplied to the downstream. Currently the costs for the subsidiaries are not well accounted for. 3. No visible profits from the downstream. The downstream is currently overshadowing the gains made by upstream through the cheap shale gas. 4. Imbalanced R&D investment between the upstream and downstream sections. 5. Difficulty in analyzing the performance of the various subsidiaries (AgroSciences, Specialty Chemicals) 6. Reduced confidence from large investors What difference will it make and how will it benefit the company.( answer the question based on the article and don’t do extensive research on this) 1. Improved Transfer Pricing policies: Increase in margins for the parent company (Dow Chemicals). Would help the shareholders get a better clarity to ascertain which business unit are more challenged. As of......

Words: 410 - Pages: 2

Free Essay

Dow Chemical Company

...As a manager at the Dow Chemical Company overseeing the silicon breast implant litigation, I would opt to conduct a full-scale advertising campaign focused on describing “…the benefits of silicone products. Without mentioning the breast-implant issue,” and “tell numerous heart-wrenching tales about how silicone products have saved the lives of children. “ I think this would be the most strategic way to handle this situation given the circumstances. By design, this campaign would yield many benefits for Dow Chemical’s business. First of all, this campaign would distract the general public from the negative aspects of the silicone products business and focus them on the positive aspects. I am confident that appealing to people’s emotions is truly effective and would help Dow Chemicals restore their corporate image. By providing facts about some “heart-wrenching” situation about how silicone products save numerous lives of children we would blur the negative conception about silicone products, if not completely remove it. The general public responds well to messages that have a strong emotional flow. If the advertising campaign would not be able to remove the bad perception of silicone products from the general public, it would at least impose a sense of differentiation in regards to the silicone products. By default, people associate silicone with the silicone breast implants. This advertising campaign would aim to make people associate the silicone products with something...

Words: 820 - Pages: 4

Free Essay

Internal Entrepreneurship at the Dow Chemical Company

...INTERNAL ENTREPRENEURSHIP AT THE DOW CHEMICAL COMPANY Overview:The Dow Chemical Company is the second largest chemical manufacturer in the world in terms of revenue and in terms of market capitalization; it is the third largest in the world (as of 20071). There was a steady growth of the market from the year 2002. But before that the company faced a back drop in the profit margin. The company realized its growth in 2002 only after merging with Union Carbi as the company’s sells rose to $27.8 billion. Back in 1998, the company faced the real down turn of the sale to $18.4 billion. Then, for 4 years continuously, the company managed to keep the sales around $20 billion. In the year 2000, the company planned to adopt a different strategy to enhance the sales growth. This gave rise to the production and development of Epoxy.Com. This strategy not only enhanced the growth but also changed the status of the company in the market as an innovator in the field of agricultural products, chemicals and plastics. The primary responsible of the new strategy is to target the small customers, whom the company never served. The Epoxy products and intermediates are responsible for the production and sell of epoxy raisins that added to the manufacture of electrical laminates, composites and coatings. The new profit venture was managed from Dow’s European headquarters in Switzerland. SWOT ANALYSIS:- Strength: • The new venture Epoxy was a high margin business with high capital......

Words: 996 - Pages: 4

Free Essay

Dow Chemical Case

...Case Brief Internal Entrepreneurship at Dow Chemical Description With the 2001 merger with Union Carbide, Dow Chemical Company became the largest chemicals and Plastics Company in the world. The merged company had sales of $27.8 billion specializing in chemical, plastic and agricultural products. Prior to the merger, growth had become a priority for Dow Chemical. In the years prior to 2000, the firm’s turnover dropped from $20 billion to $18.4 billion as the Net profit margin eroded to 7.1% from 10.3%. The venture was one of the many new growth initiatives Dow Chemical launched to bolster growth during this period. was conceived by Ian Telford to target the underserved market of small customers that are cost conscious. Evaluation EP&I Division: The epoxy business is a high margin but also highly capital-intensive business for Dow chemical. With 20% of the customers generating 80% of the division’s revenue and the cyclical nature of the epoxy market, the business is very susceptible to downturns. The concentration of revenues from a few customers would intuitively put customers in a position of strength during price negotiations; however Dow Chemical did not disclose prices charged to other customers. Dow Chemical maintained relationships with key clients by providing value added services (integrated supply chain, technical assistance, and volume rebates). The added services were necessary to differentiate Dow’s product. With highly...

Words: 897 - Pages: 4

Premium Essay

Dow Chemical

...Andres Felipe Lucena 200415294 REPORTE CASO DOW CHEMICAL-PBB En noviembre de 1995, la compañía Dow Chemical Company (Dow), empresa líder a nivel mundial en la producción de polietileno, está considerando la participación en la oferta pública por Petroquímica Bahia Blanca S.A (PBB), la cual quiere ser privatizada por el gobierno Argentino, haciendo la oferta publica del 51% de la compañía. Dow Chemical tiene que valorar esta compañía por medio de la metodología de Flujos de Caja Libre, adicional deberá tener en cuenta factores como: * Riesgo país, se debe tener en cuenta una prima de riesgo país, la cual afectara directamente la tasa de descuento de los flujos de caja libre (WACC), se va a tener en cuenta una tasa de riesgo país de 1800 puntos básicos. Este riesgo país principalmente tiene en cuenta el comportamiento económico de Argentina frente a una economía sólida como lo es la Americana, para esta época Argentina viene pasando por un buen momento gracias a nuevas políticas generadas por el gobierno liderado por Carlos Menem, previo a unos años de crisis y de hiperinflación. Entre las políticas adoptadas por el nuevo gobierno esta la privatización de varias empresas por sectores de la economía para disminuir el endeudamiento externo del país. Adicionalmente el gobierno quita barreras de entrada en el país y genera alianzas de impuestos con Mercosur, generando posibilidades de crecimiento en Latinoamérica y a su vez existirán competidores fuertes que......

Words: 1622 - Pages: 7

Premium Essay

Kent Chemical Case Study Analysis

...1. Analyse the organizational changes Ben Fisher made in response to the company’s problems. Why were they unsuccessful? In 2006 three global business directors (GBD) were introduced that were responsible for each one product line and should help to improve the connection with the overall organization of Kent. One fundamental problem was that the GBD were formed but with no clear aims and goals they had to achieve. Neither the GBD nor the domestic managers knew what their specific task was. In addition each GBD had an own perception of their position and so they didn’t pull together. Furthermore the subsidiaries had the feeling that the GBD would interfere in their own area although their knowledge was missing in this area. A lot of meetings were hold for nonsense as they had too many discussion points that need to be cleared due to the new structure, but finally they didn’t had an outcome. So this lead to a unproductive atmosphere and even the two parties working against each other than working with each other. Although the new GBD were rich on working experience they didn’t had the ability to fulfil the final aim of their actual position: improve the linkage between the domestic division and the whole company. In addition to that, the other side, the domestic managers didn’t feel well in giving responsibility to one person whose responsibility isn’t even clear. So this lead to a barrier between those and ended with the loss of credibility due to their inability in......

Words: 922 - Pages: 4

Premium Essay

Annual Report Analysis Dow & Basf Cairo School of Business Department of Accounting ACCT 5201 Financial Reporting & Analysis Annual Report Analysis The DOW Chemical Company BASF Chemical Company Contents A. Market Analysis and Company Overview 3 i. The Chemical Industry Overview 3 ii. Companies Overview 7 iii. Competitive Landscape 8 iv. Porter’s Five Forces Analysis 8 v. Corporate Governance 9 vi. Business Strategy 10 vii. SWOT Analysis 10 B. Financial Analysis 11 1. Horizontal Analysis 11 2. Vertical Analysis 11 3. Financial Ratios 16 A. Liquidity 16 i. Current Ratio 16 ii. Acid-Test Ratio 16 B. Activity Measures 17 i. Accounts Receivable Turnover 17 ii. Inventory Turnover 17 iii.Fixed Asset Turnover 17 C. Profitability Measures 18 i. Gross Profit Margin 18 ii. Operating Profit Margin 18 iii. Net Profit Margin 18 iv. Return on Equity (ROE) 19 D. Debt, Financial Leverage, Capital Structure 19 i. Debt Ratio 19 ii. Debt/Equity Ratio 20 iii. Dividend Payout Ratio 20 iv. Price / Earnings Ratio 21 4. Further Findings 21 i. Notes on BASF Income Statement 21 ii. Notes on Balance Sheet 22 C. Conclusion 22 A. Market Analysis and Company Overview i. The Chemical Industry Overview The chemical industry creates an immense variety of products which impinge on virtually every aspect of our lives. While many of the products from the industry, such as detergents, soaps and perfumes, are purchased directly by the consumer, 70% of chemicals manufactured are......

Words: 6002 - Pages: 25

Premium Essay

Business Analysis

...Shared value concept-共同价值观- CRS内容 | 定义 | Shared value is a management strategy focused on companies creating measurable business value by identifying and addressing social problems that intersect with their business. The shared value framework creates new opportunities for companies, civil society organizations, and governments to leverage the power of market-based competition in addressing social problems. | 3 waysshared value can be created |  Reconceiving products and markets – Defining markets in terms of unmet needs 未满足的需求or social ills and developing profitable products or services that remedy these conditions. * Example: BD developed a new type of safety syringe to reduce healthcare worker needle-stick injuries. This product innovation grew to $2 billion, approximately a quarter of the company’s revenue. Redefining productivity in the value chain – Increasing the productivity of the company or its suppliers by addressing the social and environmental constraints in its value chain. * Example: By reducing packaging and improving delivery logistics, Walmart saved $200M in distribution costs while growing the quantities being shipped Local cluster development – Strengthening the competitive context in key regions where the company operates in ways that contribute to the company’s growth and productivity * Example: Cisco reduced a key constraint to growing its addressable server market by launching the Networking Academy to train over four million network......

Words: 3282 - Pages: 14

Premium Essay

Analysis Diamond Chemicals

...Analysis Diamond Chemicals Introduction This project belongs in the engineering-efficiency category; therefore, it has to fit at least 3 of 4 performance hurdles, which are 1. Impact on EPS; 2.Payback; 3.Discounted cash flow and 4. Internal rate of return. In this article, some of those involved explained and described their opinions; however, professional knowledge may have been lacking. Therefore, we will expound and clarify below. Management Analysis Capital Expenditure On the surface, making sure a project measures up to a range of consistent, prescribed criteria in order to be accepted would appear to be a sound business practice. But in our opinion, we think DC only focused on the financial management. We think they should utilize the strategy map strategy. A strategy map provides a uniform and consistent way to describe that strategy, so that objectives and measures can be established and managed. The strategy map provides the missing link between strategy formulation and strategy execution. (Norton and Kaplan, 2004 *1) Furthermore, DC won't only focus on the financial report; they also manage by human resource and other strategic elements. Also, any of the above financial calculations or assumption could bring the wrong settlement or the expectations will be seriously biased. Economic / Financial Analysis Transportation Costs The transportation division asked that the cost of tank cars required for additional throughput should be involved in the......

Words: 929 - Pages: 4

Premium Essay

Alto Chemical Case Analysis

...ALTO CHEMICALS EUROPE PROBLEM STATEMENT How will Graaff implement the revised strategy across all the subsidiaries which will be beneficial for the company in long run? COMPANY BACKGROUND: • ACE was the regional headquarter of Alto Chemical Corporation. • There were nine wholly owned subsidiaries which produced and sell finished and building block chemicals across Western Europe. • ACE accounted for 1/3rd of alto’s global production and sales Companies had matrix structure. • Company choice for stabilizers was TIN because they have ample raw materials sand feedstock. • Company has competitive advantage as they have started a new plant for feed stock of TIN whereas other procured from third party CASE ANALYSIS: After taking over as the headquarters’ marketing manager, Graaff has devised a new strategy for ACE’s stabilizer business. Earlier the focus of the company was to capture the market share. The company was volume-oriented and competed on price. There are two kinds of stabilizers Tin and Barium, the company’s choice was Tin as it had ample stock of the needed raw material. The switching cost between two variants was high The company focused on trying to convert Barium customers to Tin by offering them a discount of 2-3% below Barium prices and better product performance. The company offered technical service which was important for small and medium sized client. With this strategy they were able to cover 18% market share. Issue with the current strategy......

Words: 814 - Pages: 4

Premium Essay

Dow Chemical Business Analysis

...Who Founded Dow Chemical Dow Chemical Company, and American Chemical and Plastics manufacturer is one of the globe’s prominent suppliers of chemicals, plastics, synthetic fibers, and agricultural products. Dow Chemical was originated by Chemist, Herbert H. Dow, of Midland in 1897. Dow was to support Midland Chemical Company in 1890 and the Dow Process Company of 1895(Dow Chemical Company, (2012)). What is a SWOT analysis? What does a SWOT analysis deliver in regards to organizations; it is a tool that categorizes the strengths, weaknesses, opportunities and threats of an organization? Once the SWOT is completed, it can determine what the firm can do in completing its objectives and what other accomplishments it can achieve to receive satisfying results (Investopedia, 2012). In running a business a SWOT analysis is a useful tool that assists an organization in operating efficiently it determines what financially and productively what an organization needs to do to succeed. Dow Chemical Company SWOT analysis Strengths The Strengths of Dow Chemical in regards to is worldwide processes, in 2007, Dow had $53.5 billion in sales. 150 manufacturing sites in 35 countries. This organization sells its merchandise in over 160 countries (Datamonitor, 2011). The company has many manufacturing operations one which is located in the Lake Jackson and Freeport, Texas area. With more contractors that are coming into the area to work for Dow Chemical not only has it brought in......

Words: 2068 - Pages: 9