Key Success Factors and Opportunities in Specialty Chemical Industry

The specialty chemical industry has three key success factors: utilizing assets efficiently, rapid development and globalization, and participating in global market competition. The industry can utilize its assets to collect and analyze data, apply advanced technology and pipeline growth. To be successful, the industry must also quickly innovate with integrated procedures, focus on product safety and stewardship, and adopt holistic concepts like Cradle to Cradle that prioritize zero waste production and 100% reuse. Additionally, the industry faces opportunities such as developing markets in Southeast Asia and Korea, and threats like increased competition from existing customers, changing government policies and regulations, and conflicts and wars in developing countries.

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MID TERM REPORT
By: Kayelyn Korenek, Matthew Center, Samantha Penland, & Trevor Belcik
Celanese
Organization

Table of Contents
2.0 Company History.......................................................................................................................2
2.1 Background................................................................................................................................3
2.2 Purpose of Study........................................................................................................................3
3.0 External Analysis.......................................................................................................................5
3.1 General Environment Analysis..................................................................................................5
3.1.1 Demographic Segment........................................................................................................6
3.1.2 Economic Segment..............................................................................................................7
3.1.3 Political Segment................................................................................................................9
3.1.4 Socio-Cultural Segment....................................................................................................10
3.1.5 Technological Segment.....................................................................................................11
3.1.6 Physical Segment..............................................................................................................12
3.1.7 Driving Forces..................................................................................................................13
3.2 Industry Analysis.....................................................................................................................15
3.2.1 Description of the Industry...............................................................................................15
3.2.2 Industry Dominant Economic Features............................................................................15
3.2.3 Market Size and Growth...................................................................................................17
3.2.4 Industry Trends.................................................................................................................18
3.2.5 Five Forces Analysis.........................................................................................................18
3.2.5.1 Threat of New Entrants..............................................................................................19
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3.2.5.2 Power of Substitute Products.....................................................................................19
3.2.5.3 Power of Buyers.........................................................................................................20
3.2.5.4 Power of Suppliers.....................................................................................................21
3.2.5.5 Intensity of Rivalry.....................................................................................................21
3.3 Competition Analysis...............................................................................................................22
3.3.1 Industry Competitors.........................................................................................................23
3.3.2 Rivals Anticipated Strategic Moves..................................................................................25
3.3.3 Key Success Factors..........................................................................................................27
3.4 Summary of Opportunities and Threats...................................................................................29
References......................................................................................................................................32
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2.0 Company History
The American Cellulose & Chemical Manufacturing Company was founded in New
York City by Camille Dreyfus, United States of America. The company was set up during World
War I to produce more affordable fabric for airplanes manufacturing. Production started in 1924
with a series of acetate commercial fabrics and yarns that were proposed as substitutes to silk. In
1927, the plant then changed its name to Celanese Corporation of America. Later, the plant was
closed down in 1983, and was then later torn down to build a prison on where it once was. In
1987, the Celanese Corporation was acquired by Hoechst and merged with its American
subsidiary, American Hoechst, to form Hoechst Celanese Corporation. By then in 1989, Hoechst
then combined most of its industrial chemical operations in a new company known as, Celanese
AG.
2.1 Background
Today, Celanese Corporation is a fortune 500 global technology and specialty materials
company with its headquarters in Irving, Texas. This company is the primary producer of acetyl
products, which are intermediate chemicals for almost all major industries and it is the world’s
biggest producer of vinyl acetate monomer. The company’s operations are primarily located in
North America, Europe, and Asia. The biggest plant is located near the Clear Lake area of
Pasadena, Texas, United States which is the home base to the world’s largest acetic acid plant.
Celanese’s headquarters are located in Dallas, Texas. They have roughly 7,500 employees
working to serve our customers throughout the world. It ranges from Dallas to Amsterdam to
Shanghai; they administer a global network of technical centers, commercial offices, twenty-
seven facilities, and further strategies production facilities.
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2.2 Purpose of Study
The reason for this study is to break down both the outer and inward situations that
Celanese works inside keeping in mind the end goal to set the phase for key proposals. By
assessing the strengths following up on the chemical manufacturing industry combined with an
evaluation of focused moves attempted by industry peers, members, for example, Celanese is
enabled to create skills fit for exploiting market open doors. The environmental analysis will
likewise analyze main impetuses and potential dangers with an end goal to guarantee
consciousness of such analyzes is represented endorsed hierarchical system and to maintain a
strategic distance from unexpected pitfalls. The second fifty percent of our report channels the
outside examination into an appraisal of Celanese’s vital "fit" in the business, an investigation of
the inside working environment and business sector position, and finishes up with key proposals
in view of our discoveries.
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3. External Analysis
The external analysis is considered a process of measuring the external and outside
surroundings of the organization. Through conducting the external analysis, the organization is
able to measure their potential business aspects upon which the success of the organization is
based. These identifying business aspects are influencing the operations of the organization to a
larger extent. The marketing department of the organization is able to identify the external
elements up to a certain limit, but the elements which are of complex nature require immediate
settlement from the organization. Conducting an external analysis helps the organization in
identifying the business strategies of their closest competitors. Through this the organization is
able to prepare itself for actions of their competitors. The external analysis will disclose all the
threats and opportunities of a company that exists around Celanese
3.1 General Environment Analysis
The chemical products developed within the United States can be broken down into four
general categories; basic and intermediate chemicals, specialty chemicals, life science chemicals,
and science and technology chemicals. For the purpose of this analysis from here forward
Chemical industry will be referred to as the specialty industry, as using just “chemicals” is too
broad. Operations performed by the industry is general when you look at the international, local,
national, state and other laws and policies formulated by the government for governing the
specialty chemical business. In today’s environment, the trend of the specialty chemical market
is changing now. In years to come, most of the specialty chemical consumption demands will be
fulfilled by the locally produced specialty chemical products or import of drugs. Because of
technological advancement, the specialty chemical industry operations will completely change in
the future. Technological advancement in this sector makes it very competitive which requires
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innovations from the organization to survive in the market. It is observing that the specialty
chemical industry is continuously growing day by day. The Celanese Company will enhance its
profitability with a compounded annual growth rate of more than 20% till 2020.
The main motive behind studying the analysis of the general environment is to
understand the recent tendencies of the specialty chemical market so that the company can
produce goods to meet the requirements of the industry, which helps the company survive in the
market for a long period of time. Conducting the environmental analysis also helps the company
in understanding the policies and regulations fixed by the government. All these policies and
procedures help the organization meet the governments structured standards.
3.1.1 Demographic Segment
The demographic segment is known as the study of the human population living in
various different areas, their spending habits, age, jobs, gender, ethnicity, and their income.
Through the demographic study, the organization is able to segment its market which enables the
organization in identifying their potential customers. Chemical Industry segmented its whole
market on the basis of country, region, and state. This will help the organization in focusing on a
particular market. Chemical Industry known as self-regulating industry, and due to the
increasing awareness of health and environmental issues, it produce products which are suitable
and consistent for the selected market. The following demographic segment influences the
performance of chemical industry:
 Population Growth Rate
 Sex Distribution
 Immigration and emigration rates
 Social Classes
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 Family size and structure
 Spending habits
 Average Disposable income level
Spending habits and income of the individuals are considered important demographic factors of
the organization. Chemical products usually imparted to some specific income groups like high
income peoples. Chemical industries can fulfill all the demands of their target consumers in an
effective way because the management of these industries are fully aware of the requirements
and tastes of their customers.
The awareness about the aspects of the demographic stabilizes the business process for a long
time through which the organization can generate more profit in its future time period. There are
many possibilities that can come from this including possibly enhancing the demand of
consumers for specialty chemical products as well as growing an aging market in western
countries. By taking this chance you have to be careful because it could also enhance the level of
struggle from existing customers.
3.1.2 Economic Segment
The economic environment is the combination of various external factors of the business
market which can influence a business in a significant way. For example, the financial crisis of
2008 has impacted the industry to a larger extent. The specialty chemical industry suffered a lot
due to the global downturn and profits plummeted to an all-time low in August 2008, and
because of this the manufacturing cost of the products will increase. Due to the increasing costs,
the organization shut down its 600 unprofitable stores. There are various economic factors which
act as significant external constraints for the specialty chemical industry. All these economic
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factors affect the entire economy and its participants either indirectly or directly. These factors
include:
 Inflation
 Taxes
 Interest Rate
 Currency Exchange Rates
 Saving Rates
 Confidence Levels of Consumers
 Unemployment rate
 Consumer Discretionary Income
 Credit Availability
 Price Fluctuations
 Stages of Business Cycle
The economic atmosphere of business will play a significant role in shaping the failure and
success of this business. Interest rates and unemployment are considered the most influential
factors for the industry, because if interest rates are too high than the borrowing cost of the
organization increases due to the organization not being able to expand the size of its business.
On the other hand, if the rate of unemployment is greater than the organization then they are not
able to hire labor at a cheaper cost which ultimately enhances the production cost of the
organization. Study of the economic segment helps the organization in achieving national and
state economic growth, through which the organization can easily expand its business and can
gain more funds for their future activities.
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Overall it can be said that the economic segment enhances the economic growth of the
opportunities for the organization such as the organization can expand its market in various
countries because this enables consumers to enjoy more goods and services which also improves
their way of life. The organization can also expand the size of its plant by hiring more
employees and be able to lower unemployment. There are some threats that the economic
segment could cause such as rate of unemployment could continue increasing, due to which
people have less disposable income and changes in government policies and regulations on
specialty chemical products may influence prices.
3.1.3 Political Segment
Government and politics play an important role in the success of a business organization.
The political segment is the combination of various political factors and government activities in
a foreign market that can either hinder a business’s ability or can facilitate in conducting the
various business activities. The political influence in the specialty chemical industry is generally
not as pronounced as it is with other industries. The Chinese government plays an important role
in promoting specialty chemical products in their country. When the specialty chemical industry
conducted business overseas, it faced various complicated legal affairs. Through conducting
worldwide business, the organization is able to become more familiarized with other countries,
which will help the organization in performing their functions under the specified rules and
regulations of the country. There are various legal and political factors which can negatively or
positively affect the decision of management. Some of them include:
 Export and import restrictions
 Individual income tax and corporate income tax
 Monetary policy
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 Trade policy
 Unfair competition laws and antitrust laws
 Anti-Discrimination laws
 Economic System
 Market economy
 Mixed economies
 Data Protection law
 Consumer protection and e-commerce
 Environmental Laws
Monetary policy and the trade policy are considered the most influential legal factors of the
organization. The monetary policy helps Celanese in the management of interest rates and money
supply, and the trade policy helps the organization in conducting their business operations
effectively. The political environment could open up the doors for the development of markets in
various countries, for example Korea, but the industry needs to be careful to not cause conflict
and war in the developing countries because then it will not be so easy to develop a new market.
3.1.4 Socio-Cultural Segment
The specialty chemical industry is a business that is in a society that changes over time,
so this industry needs to pay attention and be aware of the societal changes that occur over time,
to make sure that the industry does not fall behind. The social environment is a combination of
society's beliefs, behaviors, practices and customs. The social environment is different in
different societies. Some of the beliefs, customs and behaviors are similar to other cultures, and
some are not. The cultural segment consists of various specified learned norms which are based
on attitudes, morals & philosophies all of which occur in each society. The value system related
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to the specialty chemical industry is primarily set at very early stage of the life which is very
difficult for someone to change. There are various social and cultural factors which influence the
functioning of the specialty chemical industry in a significant manner. Some of them include:
 Lifestyles
 Buying Habits
 Education level
 Attitude
 Customer values
 Religion and beliefs
 Language
 Aesthetics
 Perception
Buying habits and lifestyle factors of the social environment influence the specialty chemical
industry greatly, because the sale of specialty chemical products depends mostly on the buying
habits and requirements of the people in the environment. For example, if the organization is
producing a product which is not in high demand, the people in that specific environment are
unlikely to purchase the product. So, it is the responsibility of the organization to consider all the
social and cultural factors while engaging in any business activity. The specialty chemical
industry needs to be able to adapt to the external social environment, than it will not be able to
survive in the market for the long haul.
Following the social and cultural environment proves very beneficial for the organization and
also brings some chances for the organization to establish itself in the market, such as high
growth rates within the market itself as well as emerging markets like China and India.
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3.1.5 Technological Segment
The surrounding environment of the specialty chemical industry has changed over the
years. In the old days, specialty chemical products were considered dangerous. Now, specialty
chemical products are in high demand. Due to the technological innovation the specialty
chemical industry has grown immensely. This change in the technological environment has
promoted the specialty chemical industry to move up in the chemical sector because it has seen
various symptoms of growth within the industry. Due to the latest technology advancements, the
industry has become one of the most successful and most demanding industries in the world.
This creates the brand image of the industry in the market. The following technological factors
impact the performance of the organization in a significant manner:
 Emergence of innovative technological fields
 Growth of different process technologies
 Development of new products
 Creation of new materials
The invention of new materials is considered one of the most important influential
technological factors because new materials can enables the industry to change the current
technology of existing products. Through doing this, the industry can extend its maturity period
and can survive for a long time in the market. Using the latest technology helps the industry to be
able to help grow the interest in new specialty chemical products and lower the concern for
possible health problems.
3.1.6 Physical Segment
The physical segment is known as the tangible, or material, objects and conditions that
surround a business. The physical segment has a significant effect on the performance of the
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organization. If the physical environment of the organization is not suitable for working
conditions the organization cannot perform in an efficient manner which ultimately reduces its
brand image in the industry. The physical environment is the combination of various natural and
man-made factors which are the following:
 Atmosphere
 Land
 Water
 Pollution rates of land, air and water
 Availability and level of natural resources
The land is considered the most influential factor in the physical segment. Inappropriate
selection of the land influences various factors of the industry like shipping facilities, population
density and distance to a specified market. This will influence the exposure of the specialty
chemical industry to weather patterns, hours of daylights and utility cost. Using physical factors
in an appropriate manner helps the industry utilize brands and dissemination to be able to grow
in other countries, but they need to be careful and make sure they are using effective business
resources.
3.1.7 Driving Forces
The table below shows the various factors which have a significant impact on the
industry:
Factors Explanation
Fast growth and globalization Fast growth in new markets and regions
through acquisition and mergers is an
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important success factor.
Sustainable product innovation and integrity High demands and increasing global
competition requires the speed of innovation
with various integrated processes.
Obligation The firm’s wishing to preserve long-lasting
working relationships.
Excel at managing volatile and complex
supply chains globally
Major global shifts in supply and demand
required gas revolution rapidly which added
uncertainty, complexity, volatility, and
ambiguity to chemical supply chains.
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3.2 Industry Analysis
Conducting an industry analysis consists of breaking down and reviewing market factors
that shape a particular industry. Within each factor there are many sub categories to be explored;
geographic area, industry trends, consumer demand, regulatory environment, and the product
being produced. An industry analysis is typically completed in order to assess the current
business environment. It can be conducted by a business owner or even a potential investor
looking to invest in a particular industry. Conducting this analysis helps one understand the
different economic pieces of the market and how they may be used to gain a competitive
advantage in the future.
3.2.1 Description of the Industry
The specialty chemical industry is one of the biggest industries in our country. The
specialty chemical industry produces products that are needed to manufacture other goods in the
market. Specialty chemical companies convert raw materials such as oil, natural gas, air, water,
and certain metals and minerals, into more than seventy thousand different products. In effect the
specialty chemicals industry is responsible for nearly six million jobs in America. According to
the American Chemistry Council, this one industry contributes nearly 26 percent of our nations
GDP with about $93 billion in research and development just in 2015 alone. The future of the
American economy is highly dependent on the business of American specialty chemicals. There
are thousands of different chemical companies within the United States. The four main
companies are Dow Chemical, Lyondell Basell, Dupont, and Proviron. This list will soon shrink
to three once the merger between Dow and Dupont is completed. Between just these four
companies their value is over $50 billion and it is growing.
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The specialty chemicals industry is the largest sub-section of the chemicals industry
accounting for 32.8% of total market capitalization according to S&P Capital I.Q. Most
companies in the specialty chemicals industry are smaller scale with the largest being Ecolab.
Specialty chemicals are produced by a complex interlinked industry. Specialty chemicals are
typically sold on the basis of their end use or performance, rather than their consumption. For
instance, a specialty chemical can be single-chemical products or formulations that sharply
influence the performance and processing of the customer’s product.
3.2.2 Industry Dominant Economic Features
Despite the rapid technological changes in the world and society, the specialty chemicals
industry still has room for innovation. Specialty chemicals are a mature industry, and some
companies within the industry are affected by the swings in the macroeconomic cycle. For
example, many company’s sales and earnings performance will increase and decrease with the
track of the housing, construction, and industrial sectors. A surplus in capacity when there is less
housing being constructed, railcars being loaded, etc., can be an indicator of a slowdown
resulting in price pressure and earnings weakness. There is also an increase in competition within
the specialty chemicals industry. There has been an increase in specialty chemical manufacturers
in the United States as well as low-cost moderately regulated areas such as the Middle East,
Asia, and South America. However, macroeconomic activity in the United States has been
trending upward which is a good sign for specialty chemicals.
3.2.3 Market Size and Growth
Specialty chemicals have grown slowly and have had lower overall profitability within a
growing competitive environment over the last 10 years. The recession in late 2007-2008 had a
large negative effect on consumer disposable income; which, in turn, had a negative effect on the
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specialty chemicals industry. With less disposable income on hand consumers had less money to
spend on appliances, furniture, automobiles, and personal care items which are all major markets
for the specialty chemicals industry. However, the economy has rebounded and so has the
specialty chemicals industry.
The specialty chemicals industry is the largest sub-section of the chemicals industry
accounting for 32.8% of total market capitalization according to S&P Capital I.Q. Specialty
chemicals are produced by a complex interlinked industry. Since the recession global
consumption of specialty chemicals has grown. From 2008-2009 value of specialty chemicals
industry fell 10%. The next year consumption grew 16%, and then fell again in 2011. 2012
brought growth of less than 1% however the years following up to 2016 has seen a rebound and
overall growth is on track to increase over 4% in the next coming years.
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In 2015 the specialty chemicals industry as a whole expanded 3.6%. This expansion happened
despite there being weakness in several major global markets. Brazil, Russia, Japan, and China
are major importers of chemicals produced within the United States, and they all had struggling
markets in 2015. China was not as weak as the others but their expansion slowed down
compared to years leading up to 2015. The growth of the specialty chemicals industry is
currently on track to outpace the growth of the U.S economy which in turn, means significant
growth for the specialty chemicals industry as well. Kevin Swift, a chief economist of the
American Chemistry Council stated that, “The U.S. chemicals industry renaissance is just getting
started”.
3.2.4 Industry Trends
Key domestic markets have expanded right along with an increase in consumer spending.
As well has lower energy costs resulting in extra savings for households, in turn, producing more
disposable income for families. With more disposable income, two main end-use markets for
specialty chemicals expanded in 2015. First being vehicle sales, up 5% in 2015. Second being
housing startup sales up nearly 12% in 2015. For every one vehicle there is on average, $3,500
worth of chemicals and for every one housing start up, on average, there is $15,000 worth of
chemicals. Specialty chemicals are widely used, and with changes to industrial and consumer
product life cycles increasing with technological changes, it can create a demand for variations in
the development of specialty chemicals. For example, growing concern about the environment
has led to many eco-friendly government restrictions that may not have existed a decade ago.
The different restrictions and policies that have been enacted have resulted in specialty chemical
companies experimenting. This experimenting has created unique chemical applications such as
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biodegradable electronic components, water-based plastics and paints, low-impact food
packaging, rechargeable batteries, wind and solar power, the list can go on and on.
On a global basis specialty chemicals are trending upwards. The consumption of
specialty chemicals from 2015-2020 is expected to increase at an average rate of almost 3.5%
annually. Historically, North American, Western European and Japanese companies dominated
the specialty chemicals industry, but that is no longer the case. With the increase in trade
liberalization, spread of technology, rapid growth in industrialized Asian economies and rising
standards of living in many developing countries, the industry is beginning to trend toward the
Middle East.
3.2.5 Five Forces Analysis
The five forces model is a key tool used internally and externally to evaluate the market
of a particular business. The model consists of five main economic forces that determine the
competitiveness and attractiveness of a particular industry. The five forces are; competition
within the industry, potential threat of new entrants, power of suppliers, power of customers, and
the threat of substitutes. Internally this is a valuable model to use in order to determine a proper,
and successful, corporate strategy.
3.2.5.1 Threat of New Entrants
It is considered one of the important forces in Michael Porter’s Five Forces model. It influences
the profitability of the industry in a significant manner. It contains the following factors that
influence the profitability of industry:
 Extensive Rules and Regulations
 High Investment
 Economies of Scale
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 Access to distribution channels
The barriers of entry for a new company are very high as the regulations and rules that
have to be fulfilled are very extensive. Opening a new business in the specialty chemical industry
requires a lot of investment which makes it hard for new companies to come in. In addition,
inability to gain access to required distribution channel can also be a major barrier for new
entrants. With high barriers of entry makes markets not challengeable and protect current firms
from possible new entries. New companies will try to battle in the areas where barriers of entry
are lower. Chemical Industry has to develop new strategies to overcome new entrants,. The new
technological developments and political and environmental differences open up and are a threat
to the industry and make it instable.
3.2.5.2 Power of Substitute Products
There are threats coming from different regions that amplify the rivalry for Chemical industry.
With different substitutes around the regions the industry has to adjust their prices to still be able
to sell which makes it hard for the company to make a good profit. The demand of specific
product can change by different factors, costs and licensing.
3.2.5.3 Power of Buyers
Power of buyers is the impact that customers have on a producing industry. When the
buyer’s power is strong the relationship to the producing industry is a monopsony, with such
conditions the buyer sets the price. Few monopsony’s exist, but there are a few that come up
between industries and buyers. The products of chemical industry mainly purchases by the
cosmetics industries, homecare products industries and different customers for performing their
day to day activities. Customers have the majority of the power; they can request better quality,
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cut prices or even force better services which all have a loss in profitability of the industry as a
result. In the specialty chemical industry the bargaining power of the customer looks to be low. It
is possible that the bargaining power could recover to a higher amount with the movement the
industry is facing. The following factors influencing the buying power of customers:
 Profitability of Buyer
 Importance of the product
 Brand Loyalty and Product Differentiation
Profitability of buyer influences the buying power of customers in a large extent. Mostly buyers
are looking for profitability. Is the product offered by industry profitable for the customer or not?
Secondly, the importance of product for customers also changes the mind of consumers. If
customers have demand, they would like to purchase more. Brand loyalty is the most important
buying factor which forces customers to buy the same product. If chemical industry have regular
brand loyal customers than they would like to purchase more products of same industry. Strength
of buying power of customers are following:
 Buyers are more concentrated than sellers.
 Threat of backward integration is high.
 Products are undifferentiated
 Buyers are price sensitive
3.2.5.4 Power of Suppliers
Producing industries require raw materials such as labor, components and other supplies.
This leads to the buyer supplier relationships between the industry and firms to provide the raw
materials used to create products. If suppliers are powerful they can exert an influence on the
producing industry, for example selling raw materials at a high price to capture some of the
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industry’s profits. Suppliers can threaten the industry if they threaten to increase the price of
products and/or services. This can cause a company to raise their prices and loss customers. If
the company were to not raise prices they could start losing money which in the long run will
cause the company to go out of business. The bargaining the supplier in the specialty chemical
industry and therefore for Celanese give the impressions to be moderate because they are
concentrated. There are following factors influence the supplying power:
 Switching cost
 Number of suppliers
 Cost of supplies relative to selling price of product.
Switching cost is considered as a high influencing factor. If it is likely to cost customers to
switch suppliers, then the power of suppliers will be higher. Secondly, the number of supplier’s
also influences the bargaining power of suppliers. Power of suppliers will be higher if there are
small number of suppliers for buyers to choose from.
3.2.5.5 Intensity of Rivalry
The intensity of rivalry among firms varies between industries. The specialty chemical
industry is considered to be disciplined if the rivalry among the firms in the industry is low. The
intensity of rivalry between firms is also referred to as being cutthroat, intense, moderate, or
weak depending on how aggressive the firms are attempting to gain advantages. A firm can
choose from different competitive methods to gain advantages over other firms. They can change
prices, improve a product differentiation, creatively use channels of distribution or exploit
relationships with suppliers. The major factors related to intensity of rivalry are following:
 Rate of Industry Growth
 Diversity of Competitors
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 Number of competitors and the balance between them
 Brand Equity
Intensity of rivalry mostly depends on the life stage of industry. Secondly, profitability of
chemical industry largely influencing by diversity of competitors. The intensity of rivalry can
also be larger when the industry is dominated by a few large firms. Brand equity also influences
the profitability because some brands in the market may have high value than others.
All the companies offer similar range of products and services. The older competitors for
the most part have an excellent intuition for the market and have a good customer base. .
Normally once a company gets a good customer base the customers will not go to another
company unless they start to have a bad experience.
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3.3 Competition Analysis
Understanding the competitive scene in an industry is significant to building up a precise
key baseline. The competition analysis is a main factor when defining the market and where we
stand as a company against our peers within the chemical manufacturing part. There are
numerous different companies within the specialty chemical industry that create various products
that make countless consumer goods. The reason for this study is to better determine what the
major competitor’s solid points are and what their disadvantages against our strengths and
weaknesses. It would then give us a wide view that can help us develop a plan to better produce
specialty chemicals that may be needed and produced at a greater rate. We have broken down
our competitive analysis centered on the major producers within our acetyl segment. In the
producing segment of acetyl segment, we compete with different firms that produce products that
come from chemicals such as Acetaldehyde, Acetic Acids Butoxyl.
Celanese is a vertically integrated corporation. Therefore, we would look at the procedure
we use to discover our major participants. We will determine who dominated the marketplace
within our own firm with our major components. The second was determine how close we are in
the overall market and what strategies most align with ours that could best keep us from moving
up in the worldwide market. Determining the best participants starts with the chemicals that we
manufacture within the firm. This is a competitive corporation and has challenges each day to be
innovative. The determination is that Dow Chemicals is the leader within the chemical division
and produces many different consumer goods with having over approximate 53,000 workers
within the United States. The next would be ExxonMobil who produces the 2nd largest amount
of chemical consumer goods in the U.S which has approximately 38,000 workers working for
them, and the third major company in the United States is Air Products & Chemicals.
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3.3.1 Industry Competitors
The three Celanese’s major competitors that we decided are Dow Chemical, Aemetis,
Inc, and Air Products and Chemicals. As we know now that Celanese is a major distributor of
Acetaldehyde, Acetic Acids Butoxyl. The major company that creates these products is Dow.
Dow’s strengths within our industry segment are that they are biologically structured to hit the
market in a very quick manner. Dow has the capability to be diverse in diverse segments within
the business. They also have placed themselves with planned partners around the globe to be
varied in many diverse production segments, and not just on the chemical side. The
disadvantages to their industry ventures are that they are very profoundly involved in their
providers. They depend on them to bring in exact imports to advance their result. The second one
that is an enormous competitor against Celanese is Aemetis, Inc which has a supply chain which
is vertically combined and seems to make progresses each year that is next to none. The largest
asset that they own is a very stable stability sheet. Confident stockholders do not worry because
they know that they have enough funds to survive a recession in case it every happens in the near
future and will be able to continue investing for the future
The third competitor that competes against Celanese is Formosa Plastics which has a lot
of strength that rivals Celanese such as a much wider customer base. They have dissimilar
separations within their industry that allows them to have a varied selection. They have their
hands in engineering, and a variety of chemicals. This would then allow them to move up and
down in the financial aspects when one industry entity. They can find a place in the marketplace
and shine in fewer opportunities.
Major Chemical Producers in the United States
Company Name Products Geographically focus
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Dow Chemical Nonionic, and
Anionic
Asia Pacific Region
Aemetis, Inc Renewable Fuels,
Food and Feed,
Biochemical, Ethanol,
and Edible oils
Europe and Asia
Air Products and
Chemicals
Gases, Chemicals,
Equipment’s, Services
and Solutions
Europe and Asia
All these organizations are the toughest competitor of Celanese. This is because the main motive
of Celanese is to cover the whole market of US, Asia, and Europe, on the other hand these
industries also develop their own strategy to cover the market of Asia, and Europe. This will
brings competition between their quality and prices of products.
3.3.2 Rivals Anticipated Strategic Moves
Our competitors will resume looking to the future as most corporations do. They would
all like to be worldwide associates and be visible worldwide. They have previously begun
developing into the Asian marketplaces and remain to look elsewhere where they can find good
worldwide associates. Each company is financing for the upcoming and looking for more cost
effect ways to pull the regular gases and other essentials out of the ground. Staying separate and
becoming more separate seems to be the trend within the market, and that way being separate,
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they won’t have to be doing what others are doing. Not placing all their capitals in one place will
also help improve them. Celanese should look to participate in other choices as well so that it
does not bind us to the marketplace. The marketplace is becoming flooded with many low level
plastic designers especially in low income nations where it is lower to produce such goods.
Dow has continuously built on their weaknesses such as growing its products and
capacity. It would like to have stock in its suppliers so that way it can help keep the supply chain
growing and can make it simpler to approach on a demand basis. Economically they will look to
invest in other chances so that they can continue to grow their assets for the products to the
consumer marketplaces. These types of events will affect us in the long run because it will give
them a larger board marketplace to finance in. They will become a worldwide product which can
lead to bigger marketplace sections because they will have the ability to expand.
Aemetis, Inc needs to shed the negative marking set by the customers because of the few
noteworthy spills, which were destructive to the earth. They have endeavored to give back and
demonstrate they are a backbone in all viewpoints that they have a place to. This additionally
takes into consideration keeping cheerful financial specialist relations, which in turns gives them
more access to reserves. The specialty chemical industry will keep on expanding their vitality
and gas markets, which could remove them from creating the same chemicals we accomplish for
our plastic portion of the business. That will be beneficial for us so that we can gain market
shares against them and other in the plastic making production. The largest threat to Aemetis, Inc
is that the oil market, which is their biggest piece of the pie, and they fluctuate at a continuous
pace. They need to keep searching for approaches to keep their obligation to pay high with the
goal that they can keep getting the subsidizing expected to burrow for oil. This is a bravo as they
do watch us develop and hope to take their pieces of the pie in plastics and vinyl products.
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Aemetis purchased out XTO, which produces characteristic gasses starting from the earliest
stage. While it is low, they can haul as much out as needed now and offer when the gas costs rise
once more. That will guarantee they have the benefits to keep procuring an awesome measure of
income. Another venture that Aemetis is working with is the improvement of biofuels. This will
bring regular assets and reused items together and permitting us another choice for fuel.
It is critical for smaller chemical companies to not try to compare head-to-head with the
superior vertically integrated companies; somewhat they should focus on their main capabilities
driving their own achievements. Air products and chemicals, which are a competitor against
Celanese, announced that its board of directors has agreed to the purpose to completely
unattached its material technologies business which would be a tax free spin off to its
shareholders. This kind of strategic decision will allow the companies businesses to influence
their respective serious abilities and enhance their competitive situations. The company trusts
that this result of the spin-off will be two best-in-class community businesses with distinct
commercial models, investment requirements and growth profiles.
3.3.3 Key Success Factors
Chemical industry states that their value created by the corporation's Technology &
Innovation Association. Through advanced process technology, application resolutions and
pipeline growth, this company has been an important provider to the company’s growth strategy.
The first key success factor for the industry is that it has the capacity to utilize its assets in an
appropriate manner. Through this the industry is able to utilize the functioning data collection
and analysis efficiently. The physical achievement of applications made by fiber and other
production is furthered by technological advancement through new approaches and methods. The
specialty chemical industry has a strong dependence on third-party benefactors of such
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technologies, and as such their thorough selection of and efficient training and use of these
vendor products is analytically appropriate.
The second success key factor for the specialty chemical industry is that they are capable
to deal with rapid development and globalization. The leading specialty chemical corporations
understand that fast growth in new areas and markets via unions and possessions is a key serious
success factor. In order to achieve this such as this, they would need to enter into these markets
with preconfigured, field-proven finest practices and adaptive industry procedures for core
purposes that can be deployed and ramped up rapidly, and they are removing factually grown
complexity as they match processes and operations on a worldwide foundation to establish a
corporate model that is poised for maintainable growth and development.
The third success key factor for the specialty chemical industry is that they are capable to
participate in the global market competition. Due to this they are able to give a toughest
competition to their competitors and able to enhance their brand image in the existing market.
This requires that the industry should quickening the speed of innovation with integrated
procedures that drive rapid time to market while confirming product safety and stewardship
throughout the whole product life cycle, and they are accepting holistic concepts, such as Cradle
to Cradle, which focus zero productions and 100% reusing of waste.
3.4 Summary of Opportunities and Threats
The following bullet points are the opportunities and threats on the specialty chemical
industry.
Opportunities
 Development of market in various untapped countries like South East and Korea.
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 Developing affluent market
 High growth potential of chemical market
 High growth rates in the emerging market of China, India, and Brazil
Threats
 Enhancing level of struggle from existing customers
 Rate of unemployment keeps increasing, due to which people have less disposable
income
 Changes in government policies and regulations on chemical products may influence
prices and can cause an uprising of raw materials
 Conflicts and Wars in developing countries which raises the difficulty for the
organization in working these markets.
 Various trade rules and regulations of the government.
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