...Executive Summary Rohm & Haas recently introduced a new product, Kathon MWX, in order to exploit an untapped portion (reservoir capacity under 1,000 gallons) of the biocide market. Even with limited competition within this segment, Kathon MWX has not been able to produce its annual target revenues, only capitalizing on roughly 6% of said target in a 5 month period. Large-scale distributors, who exhibit the most buyer power and influence over end customers in the industry, threaten manufacturer brand equity by relabeling all biocide maintenance products under their own brands. Even though Rohm & Haas does not allow distributors to change the label on Kathon MWX, the lack of end customer awareness for the manufacturer brands has detrimentally limited sales due to precedent relabeling habits in the industry. Rohm & Haas can achieve and possibly surpass its sales targets in the short-term by increasing price and incentivizing distributors with higher margins, and in the longer term by strengthening sales channel relationships with industrial supply houses and machine tool shops, as well as mitigating risk of brand cannibalization of other products by relabeling Kathon MWX. Analysis Kathon MWX At the end of December 1983, Rohm and Haas introduced Kathon MWX, a biocide, which is specifically geared toward smaller, individual tanks. Research shows that in best case scenario, Kathon MWX can save an end user up to 54% of annual cost when used. (See exhibit 1). However, despite...
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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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...occurred in Bhopal, India. A gas leak spread throughout the streets of Bhopal and devastated all of the inhabitants in the area; at least 3800 of the residents were immediately killed. The gas that leaked was known as methyl isocyanate (MIC). An estimate of forty tons of the gas was leaked. The death toll quickly rose to the tens of thousands in the following days. The total count of people affected is close to half million people. Many questions arose from this incident, such as how and why it happened and how it could avoided. The Indian government had hopes in industrializing the nation. The Indian government implemented policies that would attract foreign companies to invest in local industry. One of the companies that invested was a large chemical producing company called the Union Carbide Corporation (UCC). The company built a plant that produced a commonly used pesticide, Sevin, in Bhopal. The...
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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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...52:620:530 D6 (Summer 2015) Arun Kumaraswamy Case preparation questions KTM – Ready to race (for general discussion in class) 1. Size up KTM (its strategy, resources/capabilities, organization and management) and its environment. How is it performing? 2. What growth options does it have? How does each growth option fit with its environment, strategy/resources/capabilities? How well can KTM deliver on each of these options? 3. What growth options should KTM pursue? Should it pursue organic growth (i.e., through internal development), merge/acquire (if yes, who) or use alliances? Newell Co: Corporate strategy (for general discussion in class) 1. Is Newell’s corporate strategy successful? Does the company add value to the businesses within its portfolio? 2. What are Newell’s distinctive resources and competencies? 3. What challenges does Newell face in the late 1990s? 4. Given this context, does the Calphalon acquisition make sense? Rubbermaid acquisition? Why (or why not)? Antitrust regulation in a global setting: The EU investigation of GE/Honeywell merger (for general discussion in class) 1. What markets are affected by the proposed GE/Honeywell merger? Who are the main competitors in these markets and how are these markets related to each other? 2. What would the combined market share of GE and Honeywell be in each of the markets you identified in Q1? How would these estimates change depending on how broad or narrowly you define these markets? 3. Which...
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...Policy Letter from the Editor Case Abstracts Cases “Sally’s Dilemma: Making Tough Choices in Collaborative Visioning” Karl A. Hickerson, David J. O’Connell & Arun K. Pillutla, St. Ambrose University “The Death of a Salesman Revisited: Part A” Herbert Sherman, Long Island University & Daniel James Rowley, University of Northern Colorado “The Death of a Salesman Revisited: Part B” Herbert Sherman, Long Island University & Daniel James Rowley, University of Northern Colorado “Customer Service at the Jewish Community Center” Edward Demarais, Salem State College, Sandra Sheckman, & Gina Vega, Salem State “The Frozen Production Line” Anton Massman, U.S. Air Force, Elaine Davis & Janell M. Kurtz, St. Cloud State University “Dow Chemical and Agent Orange in Vietnam” Cedric Dawkins, California State Polytechnic University – Pomona Membership Form Page 2 The CASE Journal Volume 4, Issue 2 (Spring 2008) EDITORIAL POLICY The audience for this journal includes both practitioners and academics and thus encourages submissions from a broad range of individuals. The CASE Journal invites submissions of cases designed for classroom use. Cases from all business disciplines will be considered. Cases must be factual, and releases must be available where necessary. All cases must be accompanied by an instructor’s manual which identifies the intended course, relevant theoretical concepts or models that can be applied, and the research methodology for the case...
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...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 UCC (Union Carbide Corporation). | Why look at the company from the Knowledge Worker prospective… | Over and over...
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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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...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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...* 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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...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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...Trinseo Company FINC 320-01 April 29, 2015 Trinseo is a world leader in the production of plastics, latex and rubber. An independent 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...
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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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...The Imperial Sugar Company was once known for the vast amounts of sugar they produced, but they are now equally known for the explosion that occurred in 2008. The two main contributing factors of the explosion were poor maintenance and human error. Due to lack of maintenance, the building caught fire, taking fourteen lives and injuring thirty-six. On February 7, 2008, in Port Wentworth, Georgia, an explosion erupted which caused a chain reaction of explosions at the Imperial Sugar Company. This explosion took the lives of fourteen workers. As this explosion was investigated, CSB (Chemical Safety and Hazard Investigation Board) found that this explosion was building up over time without anyone knowing it. This company wasn’t very good at keeping...
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...Penn Square Bank and the Down Corning Bankruptcy Today’s businesses struggle to survive in a volatile marketplace and frequently internal and external ethical pressures are placed upon employees and management in an effort to ensure the success of the company. Companies like Penn Square Bank faced ethical pressures regarding documentation, credit extension, and revenue recognition, which eventually led to the closing of Penn Square Bank. The Dow Corning bankruptcy raised many ethical questions. Speculations have been made about whether Dow Corning filed bankruptcy because of the financial hardship placed upon it by consumer lawsuits or whether Dow Corning used bankruptcy laws to shield itself from obligations to its consumers. This report will examine, 1) the ethical challenges and pressures each of these companies faced, 2) a review of Dow and Corning’s actions during the bankruptcy filing, and 3) a discussion of how Penn Square Banks ethical pressures might have been alleviated or offset. Penn Square Bank Penn Square Bank is an illustration of improper asset valuation. In an effort to grow Penn Square bank into a merchant bank and have it become a major financial backer to Oklahoma’s oil men, Bill Jennings hired Bill Patterson to lead his new energy lending division (Caskey, 1985). The energy lending division was tasked to find borrowers for oil customers. As loans were passed to other financial institutions; Penn Square collected fees for originating...
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