The Dow Chemical Company is an outstanding organisation that operates in more than 150 countries all over the world. It is a leader in the chemical industry and is known to the general public as a provider of chemical and plastic products mainly. Dow cooperates with numerous customer markets and exists in a competitive environment. The company competes with BASF SE and El DuPont de Nemours & Co.
We will write a custom Assessment on Dow Chemical Company and Its Strategy Analysis specifically for you
301 certified writers online
BASF SE is the main competitor of Dow. This organisation operates in more than 200 countries, which gives it a great opportunity to reach more clients and increase its profit. It reaches those business segments that are approached by Dow, which steps up their competition. Even though BASF receives the main part of its gaining outside the USA, which is beneficial for Dow because it can be the leader in the home market, the company attracts numerous clients from foreign locations, which can prevent other organisations from successful expansion and urges Dow to implement changes.
El DuPont de Nemours & Co. enters the top of the world’s largest chemical companies, which proves it to be Dow’s competitor. In addition to that, this organisation has existed since the beginning of the 19th century and was founded in the USA. Still, it serves about 90 countries, which proves that Dow can benefit from the market more but, according to the SWOT analysis, it also presupposes a great developmental opportunity for DuPont. The main reason why these companies are competitors is that they produce the same products.
The revenue of BASF SE is more than $70.45 billion while Dow operates less than $50 billion. However, emphasising its strengths and opportunities, the company can increase its profit. DuPont’s revenue is $25 billion approximately. Still, if this organisation makes a step forward while Dow keeps to its stable position, it can win the competition and unseat others.
Bargaining power of suppliers: BASF SE has a larger number of suppliers and substitute inputs than its competitors. Still, DuPont’s production can be easily mixed and matched. It has a long-term positive impact on suppliers because it takes into consideration their profits and always ensures expected the volume of products.
Bargaining power of customers: BASF SE and DuPont are highly valued by their clients. That is why they are not very sensitive to prices and use the same product even if it becomes more expensive. Still, DuPont and Dow provide clients with less information than BASF SE which leads to a decrease in costs.
The intensity of existing rivalry: Dow does not have many competitors in the industry. It is advantageous because there are more chances to be selected by clients. Still, it can also be a problem because the value of the entity will be affected adversely. BASF SE benefits because it does not spend much money on storage while DuPont focuses on low exit barriers that can bring it some advantage if some company leaves the market.
The threat of substitutes: Dow has a limited number of substitutes that is good for the company because it can focus only on the main competitors and develop strategies to deal with them.
The threat of new competitors: Dow and its competitors are not afraid of newcomers because customers in this market tend to be rather loyal and they value reputation greatly. Strong brand names and advanced technologies are likely to be unavailable for start-ups. High entry barriers also prevent the appearance of new competitors, which proves that Dow should focus on BASF SE and DuPont.
Still, Porter’s five forces analysis shows that Dow has enough competitive power to survive in this situation due to its general economic conditions that are enhanced and supported by acquisitions and joint ventures. Its products reach many diverse populations due to the extreme global presence that can be still improved. The company attracts clients paying attention to societal values, tries to be green and innovative. Continual advancements in technology that ensures the high quality of products and focus on renewable resources give more global opportunities.