...____________________________________________ _______________________________________ Rohan Dhaigude: 5 Naveen Venkatesh: 5 ____________________________________________ _______________________________________ (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...
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...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...
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...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 e-epoxy.com venture was one of the many new growth initiatives Dow Chemical launched to bolster growth during this period. E-epoxy.com 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...
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...MILAN MOHANTY 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...
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...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 revenues...
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...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...
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...Executive Summary In July 2008, Dow Chemical announced an acquisition of Rohm and Haas, a specialty chemicals producer, in an attempt to implement its new strategy of pursuing high growth businesses. The financial crisis that hit in the fall and the termination of PIC joint venture called into question Dow’s ability to finance the deal. Based on the valuation models, paying $78/share for Rohm and Haas remained a good value for Dow post financial crisis as the combined company retained its ability to generate synergies. Dow should proceed with the deal as announced to prevent costly litigations and aim for maximizing long-term shareholder value. To avoid being downgraded to junk status and incurring other concerns of financial distress, Dow should attempt to renegotiate the terms of its financing, particularly its $13 million bridge loan. Table of Contents I. The Firms…………………………………………………...…….p. 3 a. Dow Chemical b. Rohm & Haas c. Petroleum Industries Company II. The Acquisition……………………………………………..……p. 3-5 d. The Rationale e. The Valuation f. The Financing III. The Risks……………………………………………………….…p. 5 IV. The Financial Crisis……………………………………….……...p. 5-7 g. The Macroeconomy and Industry h. The Firms i. The Post-Crisis WACC j. The Post-Crisis Valuation k. The Post-Crisis Financing V. The Recommendations……………………………………………p. 7-8 l. The Options m. The Recommendations ...
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...toAssignment | | Relevance | | Content Analysis – Breaking it down The Sum of the Parts I have chosen to review the Knowledge Management data collected about the Dow Chemical Company from the prospective of a Knowledge Worker. Since I am becoming more familiar with the term of what is meant by being a Knowledge Worker I feel like I am able to draw from my own experiences to assess the information gathered. About Dow Chemical Company | What the facts mean to me as a Knowledge Worker | Products & Services provided… | “Dow Chemical Company isa leading science and technology businessthat provides innovative chemical, plastic, andagricultural products and services to customersin more than 160 countries.” (Obtained from Transforming Information Management. Dow Chemical Company makes critical knowledge secure and easier to access and share.) | Location & Organization of the company… | “The company whose annual sales are over $57 billion andhave approximately 46,000 employees, they are a Midland,Michigan-based business.” (Obtained from Transforming Information Management. Dow Chemical Company makes critical knowledge secure and easier to access and share.) | Name of the division, is there any significance behind the name… | Proprietary Information Services – Much of this conversion to manage Dow Chemical Company’s Intellectual Assets began with Anne Rogers, Leader Proprietary Information Services in 2001 when the company acquired six major companies and merged with...
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...Values, Ethics and Business Decisions International MBA - Antai College of Economics & Management, Shanghai Jiao Tong University, Oct 2011 Corporate Social Responsibility: The Bhopal Gas Tragedy Five Past Midnight in Bhopal What happened on the night of December 2nd-3rd 1984 in Bhopal? A Tragedy Water enters IC storage tank 610. The refrigeration unit, which should have kept the MIC close to 0°Celsius, is shut off. The water triggers off an exothermic runaway reaction and consequently the release of the lethal gas mixture, a poisonous cloud of MIC, hydrogen cyanide, monomethylamine, carbon monoxide and possibly 20 other chemicals. The cloud of gas envelops the city like an arc of over 20 square kms before the residents could run away. No stock of antidote is available. The composition of the poisonous cloud is not known. Up to 10,000 people may have died. The Causes What are the causes of this tragedy? Viewed from the Context Overconfidence in the production technology, leading to the choice of a dangerous process; Overcapacity of the plant, leading to excess storage of a dangerous product; Bad economic performance, leading to disinterest and disinvestment; Bad management, leading to dangerous cost reductions; Insufficient safety training and standards, leading to unskilled behaviour. Economy Industry Company Plant Team Human act Causal Chain With such a causal...
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...* Insurance: Munich Re Munich Re, là công ty tái bảo hiểm lớn nhất thế giới [2] với 5.000 khách hàng ở 160 quốc gia. Trụ sở đặt tại thành phố Munich, Đức. Munich Re thành lập năm 1880 bởi Carl von Thieme cũng là người sáng lập công ty bảo hiểm Allianz, nhà bảo hiểm lớn nhất của Đức. Munich Re là tên thường dùng ngắn gọn thay cho tên đầy đủ là Munich Reinsurance Company * Manufacturing * Dow is the company that combines the power of science and technology to passionately innovate what is essential to human progress. The Company is driving innovations that extract value from the intersection of chemical, physical and biological sciences to help address many of the world's most challenging problems such as the need for clean water, clean energy generation and conservation, and increasing agricultural productivity. Hurricanes Gustav and Ike in 2008 caused temporary outages at several of Dow Chemical Company’s production facilities, resulting in $181 million in operating costs. * Honda suffered a loss of over $250 million when heavy floods in Thailand inundated automobile assembly plants in 2011. * Holcim, one of the world’s leading suppliers of cement and aggregates, was affected by severe flooding in both Thailand and eastern Australia in 2012, resulting in $6.1 to $8.2 million in maintenance costs and lost production, in addition to costs of around $6.1 million from a surge in coal prices due to impacts on Australian coal mines. * Oil &...
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...company formed in 2010, combining the technologies and capabilities of four businesses of The Dow Chemical Company created it: Polycarbonate and compounds & blends, paper and carpet latex, synthetic rubber, and styrenics (polystyrene, ABS/SAN resins, expandable polystyrene). Trinseo's unique and balanced product portfolio brings together plastics, rubber and latex businesses that share feedstocks, operations, customers and end users. Trinseo has a leadership position in its two flagship products, polystyrene and latex. Their global reach and resources span a variety of disciplines, enabling them to serve a wide range of end-markets, including automotive, consumer electronics, large and portable appliances, glazing and sheet, paper and board coatings, packaging, tires, and carpet backing. The company benefits from global scale, customer relationships and a robust innovation pipeline. Trinseo has approximately $5.1 billion in revenue (2014), with 19 manufacturing sites in all geographies, including Sao Paulo, Brazil, Horgen, Switzerland and Hong Kong, China. Trinseo was part of The Dow Chemical Company known as “Dow” until 2010 and was originally named Styron. Dow grouped the four businesses together into a separate division in anticipation of forming an independent company in July 2009. Through December of 2009, Dow explored divestitures options for the new division. In March 2010, Dow signed a sale agreement with Bain Capital Partners for $1.6 billion. In June 2010, Styron...
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...world's worst industrial catastrophes.[1] It occurred on the night of December 2–3, 1984 at the Union Carbide India Limited (UCIL) pesticide plant in Bhopal, Madhya Pradesh, India. A leak of methyl isocyanate gas and other chemicals from the plant resulted in the exposure of hundreds of thousands of people. The toxic substance made its way in and around the shantytowns located near the plant.[2] Estimates vary on the death toll. The official immediate death toll was 2,259 and the government of Madhya Pradesh has confirmed a total of 3,787 deaths related to the gas release.[3] Others estimate 3,000 died within weeks and another 8,000 have since died from gas- related diseases.[4][5] A government affidavit in 2006 stated the leak caused 558,125 injuries including 38,478 temporary partial and approximately 3,900 severely and permanently disabling injuries.[6] UCIL was the Indian subsidiary of Union Carbide Corporation (UCC), with Indian Government controlled banks and the Indian public holding a 49.1 percent stake. In 1994, the Supreme Court of India allowed UCC to sell its 50.9 percent share. Union Carbide sold UCIL, the Bhopal plant operator, to Eveready Industries India Limited in 1994. The Bhopal plant was later sold to McLeod Russel (India) Ltd. Dow Chemical Company purchased UCC in 2001. Civil and criminal cases are pending in the United States District Court, Manhattan and the District Court of Bhopal, India, involving UCC, UCIL employees, and Warren Anderson, UCC CEO...
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...Dow’s Bid for Rohm and Haas 1.Why does Dow want to buy Rohm and Haas? Dow, a producer of low-valued cyclical commodity chemicals, had future aspirations of being not only the largest but as well the highest valued chemical company in the United States. Its strategy was simple: to be an asset-light company with extremely high growth potential fuelled through advanced technology, geographical reach, strong industry channels and an overall switch in to the advanced specialty chemical and materials market. As a result when the option to purchase Rohm and Haas was put to market Dow jumped immediately on the opportunity. Rohm and Haas brought with it mass amounts of experience in the specialty chemical business, strong management and a diverse portfolio of businesses that Dow was searching for. As well it provided an establish foundation within the specialty market in which Dow could further mould to fit within its general corporate structure. In a perfect world, Rohm and Haas was the perfect match for Dow’s two tiered growth strategy, and appeared to be in a vulnerable state with the sudden announcement of its sale. Was the $78 per share bid reasonable? In valuing Rohm and Haas at the time of the bid we believe the price of $78 per share was in fact reasonable. In our calculation of the standalone Rohm and Haas value we used the company’s projected FCF from Exhibit 7a with the provided WACC of 8.5% to complete the DCF. Although the provided calculation...
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...Análisis de Entorno International Lobbying and the Dow Chemical Company (A) 1.- ¿Debió Dow haber hecho lobby contra el proyecto denominado REACH? Dado que Dow es un actor importante dentro del mercado de los productos químicos, es la segunda empresa a nivel mundial, además que el mercado Europeo representa una parte importante de sus ventas y que las industria química y ellos mismos vienen siendo cuestionados como el caso de la planta en India y las reservas que estimaron por las posibles demandas con el asbesto, creemos que la estrategia utilizada de hacer lobby solo mediante influir en el gobierno de EEUU para que estos presionaran a las distintas autoridades de la unidad Europea no fue la mejor, creo resquemores de los distintos países de Europa que el gobierno de EEUU se entrometa en sus asuntos internos lo cual hizo que algunos votaran a favor de este proyecto solo por este tema. Otro punto a considerar es que REACH iba a ver la luz de todas maneras, al hacer lobby en la unidad Europea era mejor para Dow poder influir y conocer de primera instancia la información y el alcance de esta nueva legislación en el continente Europeo pudiendo de alguna manera influir en esta, aunque al hacer esto consideraba que ellos aceptaban las reglas por lo cual no iban a poder criticar el resultado. Además estimamos que al aprobarse REACH iba a ser un aliciente para la aprobación de nuevas normas en otros países del mundo como EEUU, por lo cual al haber participado iba a estar...
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...Andy Andrews Kay Cosgrove English 1304 March 20, 2012 Lake Jackson My Community. When asked where I live, I usually respond “I am from Lake Jackson, Texas. Next they usually follow up with “where is that located?” Lake Jackson is a community comprised of several neighborhoods in Brazosport County, south of Houston. The city grew out of Dow Chemical's need for employee housing in the early 1940s. The company began constructing communities on the former Lake Jackson Plantation. After the town incorporated in 1944, Dow built its first streets, parks and sewer system. Lake Jackson is one of those close knit communities where generally everyone knows everybody. You go to the same preschool, you go to the same church, and everyone goes to the same mall. In a tiny town, there is not much to do, so it most often leads to boredom and talks of leaving. That in term is what I believe is the problem in my community. People live in Lake Jackson, mostly due to the chemical plants that are located nearby. Meaning in turn most kids parents work at the plants. Lake Jackson is seen as a place to raise your kids and as a place to retire. This leads to their kids to repeat the cycle. Instead of leaving to pursue your own dreams and live your own life, you are essentially just repeating the cycle of going to the same school as your parents, work at the plants, have children of your own and thus continuing this life cycle. The image enclosed is of the sign one sees upon entering Lake Jackson...
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