Even a decade ago long established multinational companies were flourishing. They had a strong R&D department, patents, unique high quality products, no competition and money was flowing in. This was more prevalent in the large multinational chemical companies like Dow, Dupont & BASF. But in this era, times have changed. Many specialty chemicals have become commodities, today, and now smaller, nimbler companies in Asia have come up copying and producing better products, and giving the customer a better value, creating intense competition for these MNC’s. These firms now face tremendous pressure in protecting margins and price in the midst of new competition from these smaller companies. Creating and developing a superior and unique product with a value proposition is an integral part of business strategy, but sustaining it for long term is much more difficult.
Today, the large chemical MNC’s are experiencing increasing instability in an industry where regulatory compliance, globalization, economic volatility, and consolidation are headlines. They need to adopt new measures to address these issues.
Taking into account core competencies along their whole value chain, chemical companies must effectively communicate their differential value to their customer base, otherwise their existence will be at stake.