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Celanese Organization: External Analysis and Company History
Added on -2019-09-22
This report provides an external analysis of Celanese Organization, including the general environment analysis, demographic segment, economic segment, political segment, socio-cultural segment, and technological segment. It also covers the company's history and purpose of study.
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0MID TERM REPORTBy: Kayelyn Korenek, Matthew Center, Samantha Penland, & Trevor BelcikCelanese Organization
Table of Contents2.0 Company History.......................................................................................................................22.1 Background...............................................................................................................................32.2 Purpose of Study........................................................................................................................33.0 External Analysis.......................................................................................................................53.1 General Environment Analysis..................................................................................................53.1.1 Demographic Segment........................................................................................................63.1.2 Economic Segment..............................................................................................................73.1.3 Political Segment................................................................................................................93.1.4 Socio-Cultural Segment....................................................................................................103.1.5 Technological Segment.....................................................................................................113.1.6 Physical Segment..............................................................................................................123.1.7 Driving Forces..................................................................................................................133.2 Industry Analysis.....................................................................................................................153.2.1 Description of the Industry...............................................................................................153.2.2 Industry Dominant Economic Features............................................................................153.2.3 Market Size and Growth...................................................................................................173.2.4 Industry Trends.................................................................................................................183.2.5 Five Forces Analysis.........................................................................................................183.2.5.1 Threat of New Entrants..............................................................................................191
3.2.5.2 Power of Substitute Products.....................................................................................193.2.5.3 Power of Buyers.........................................................................................................203.2.5.4 Power of Suppliers.....................................................................................................213.2.5.5 Intensity of Rivalry.....................................................................................................213.3 Competition Analysis...............................................................................................................223.3.1 Industry Competitors........................................................................................................233.3.2 Rivals Anticipated Strategic Moves..................................................................................253.3.3 Key Success Factors.........................................................................................................273.4 Summary of Opportunities and Threats..................................................................................29References.....................................................................................................................................322
2.0 Company HistoryThe American Cellulose & Chemical Manufacturing Company was founded in New York City by Camille Dreyfus, United States of America. The company was set up during WorldWar 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 BackgroundToday, 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.3
2.2 Purpose of StudyThe 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.4
3. External AnalysisThe 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 Celanese3.1 General Environment AnalysisThe chemical products developed within the United States can be broken down into fourgeneral categories; basic and intermediate chemicals, specialty chemicals, life science chemicals,and science and technology chemicals. For the purpose of this analysis from here forwardChemical industry will be referred to as the specialty industry, as using just “chemicals” is toobroad. 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 thespecialty chemical business. In today’s environment, the trend of the specialty chemical marketis changing now. In years to come, most of the specialty chemical consumption demands will befulfilled by the locally produced specialty chemical products or import of drugs. Because oftechnological advancement, the specialty chemical industry operations will completely change inthe future. Technological advancement in this sector makes it very competitive which requires5
innovations from the organization to survive in the market. It is observing that the specialtychemical industry is continuously growing day by day. The Celanese Company will enhance itsprofitability with a compounded annual growth rate of more than 20% till 2020.The main motive behind studying the analysis of the general environment is tounderstand the recent tendencies of the specialty chemical market so that the company canproduce goods to meet the requirements of the industry, which helps the company survive in themarket for a long period of time. Conducting the environmental analysis also helps the companyin understanding the policies and regulations fixed by the government. All these policies andprocedures help the organization meet the governments structured standards. 3.1.1 Demographic SegmentThe demographic segment is known as the study of the human population living invarious 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 theorganization in identifying their potential customers. Chemical Industry segmented its wholemarket on the basis of country, region, and state. This will help the organization in focusing on aparticular market. Chemical Industry known as self-regulating industry, and due to theincreasing awareness of health and environmental issues, it produce products which are suitableand consistent for the selected market. The following demographic segment influences theperformance of chemical industry:Population Growth RateSex DistributionImmigration and emigration ratesSocial Classes6
Family size and structureSpending habitsAverage Disposable income levelSpending habits and income of the individuals are considered important demographic factors ofthe organization. Chemical products usually imparted to some specific income groups like highincome peoples. Chemical industries can fulfill all the demands of their target consumers in aneffective way because the management of these industries are fully aware of the requirementsand tastes of their customers.The awareness about the aspects of the demographic stabilizes the business process for a longtime through which the organization can generate more profit in its future time period. There aremany possibilities that can come from this including possibly enhancing the demand ofconsumers for specialty chemical products as well as growing an aging market in westerncountries. By taking this chance you have to be careful because it could also enhance the level ofstruggle from existing customers.3.1.2 Economic SegmentThe economic environment is the combination of various external factors of the businessmarket which can influence a business in a significant way. For example, the financial crisis of2008 has impacted the industry to a larger extent. The specialty chemical industry suffered a lotdue to the global downturn and profits plummeted to an all-time low in August 2008, andbecause 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 whichact as significant external constraints for the specialty chemical industry. All these economic7
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