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Strategic Management Sir Adil T. Paracha Final Semester Project Final Report Critically Assess the DuPont Company FA11 - BBA – 114 Sundus Mumtaz FA11 - BBA - 109 Sidra Tul Muntaha FA10 - BBA - 160 Waleed Khan FA11 - BBA – 129 Wadood Raja FA11 -BBA – 025 Halima Rafiq FA11- BBA - Sehirsh Kanwal Strategic Management DuPont Company 1
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Page 1: DuPont Company

Strategic ManagementSir Adil T. Paracha

Final Semester Project

Final Report

Critically Assess the DuPont Company

FA11 - BBA – 114Sundus Mumtaz

FA11 - BBA - 109 Sidra Tul MuntahaFA10 - BBA - 160

Waleed KhanFA11 - BBA – 129

Wadood Raja FA11 -BBA – 025

Halima RafiqFA11- BBA -

Sehirsh Kanwal

Date 4 June, 2015.

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EXECUTIVE SUMMARY

This Composition Enlightens The DuPont Company Strategies. This Document Also Highlights The Critical Points That DuPont Is Considering And Also Reflects And The Characteristics That Are Consider While Diversifying Into Different Industries And How DuPont Is Managing Them. Lastly This Composition Draws A Clear Difference Between DuPont And Its Competitors.

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Table of Contents Page Number

Executive Summary …………………………………………………………… 2Introduction

DuPont…………………………………………………………………….4 Lectures Drivers ………………………………………………………………5 Industry Features ……………………………………………………14 Pestle Analysis……………………………………………………….18 Porter’s Analysis …………………………………………………….22 Key Success Factors …………………………………………………25 Group Mapping & Scenarios ………………..……………………….33 Competitive Strength Assessment…..………………………………..34

Evaluation of Strategies ………………………………………………39 Competencies of DuPont …………………………………………….41 Measuring the Competencies…………………………………………42 Value Chain Analysis ………………………………………………..43 SWOT Analysis ………………………………………………………44

TWOS Analysis……………….………………………………………46 SPACE Matrix Analysis………………………………………………48 QSPM………………………………………………………………….50 Strategies…………………….…………………………………………52

Conclusion ….……………………………………………………………………53

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Introduction

DuPont Company

E. I. du Pont de Nemours and Company, commonly referred to as DuPont, is an American chemical company that was founded in July 1802 as a gunpowder mill by Éleuthère Irénée du Pont. In the 20th century, DuPont developed many polymers such as Vespel, neoprene, nylon, Corian, Teflon, Mylar, Kevlar, Zemdrain,M5fiber, Nomex, Tyvek, Sorona and Lycra.

DuPont developed Freon (chlorofluorocarbons) for the refrigerant industry, and later more environmentally friendly refrigerants. It developed synthetic pigments and paints including Chroma Flair. In 2014, DuPont was the world's fourth largest chemical company based on market capitalization and eighth based on revenue.

DuPont describes itself as a global science company that employs more than 60,000 people worldwide and has a diverse array of product offerings. The company ranks 86th in the Fortune 500 on the strength of nearly $36 billion in revenues, $4.848 billion in profits in 2013.In April 2014, Forbes ranked DuPont 171st on its Global 2000, the listing of the world's top public companies. DuPont businesses are organized into the following five categories, known as marketing "platforms": Electronic and Communication Technologies, Performance Materials, Coatings and Color Technologies, Safety and Protection, and Agriculture and Nutrition.

DuPont is working inclusively with others to find innovative, science-enabled solutions to some of the world’s biggest challenges. Inclusive innovation means global collaboration focused on feeding the world, reducing dependence on fossil fuels, and protecting what matters most. It means hybrid seeds for harsh climates are field-tested by farmers to find the seeds that thrive. It is how solar installations that harvest more energy can be wired into the grid for a growing urban population. And it makes plant-based replacements for petrochemicals a growing business that enables a shrinking carbon footprint. DuPont believes that big challenges must be met by bigger science. Inclusive innovation is our approach to applying science to create solutions, on a scale no company, organization or country could accomplish alone.

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Drivers of Change

Changes in Costs

High American Tax RatesOperations Weren’t Global Vendors Charging HighOverhead CostsDrive for InnovationAll this resulted in Increment is visible in DuPont’s Costs. Previous Impact?High Profits – No concept of Outsourcing – Continuous Diversification10 years? Outsourcing of heavy amount – Targeting developing countries for Production – Changing vendors – Being Global in OperationsDemand?15 Industries – Major Industries for Developed/Developing countries Demand will increase.Competition IntensityLarge # of Competitors – Learning from every Move of DuPont – Brutal CompetitionProfitsIndustry has been visible with High profits and their Reasons.

Growing Buyer Preferences and Attitudes

Considering Branded offeringsSocial influenceAbility to PurchaseChanging Beliefs, Feelings & Behavioral IntentionsAll this resulted in DuPont Branding Strategies.Changing Branding Architecture.Brand Portfolio. Previous Impact?Profits – Less focus on differentiation – House Blend Concept10 years? Outsourcing of Marketing–Unique Position for their Target Market– House of BrandsDemand?Major Industries for Developed/Developing countries Demand will increase.

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Competition IntensityLarge # of Competitors – Learning from every Move of DuPont – Brutal CompetitionProfitsIndustry has been visible with High profits and their Reasons.

Reductions In Uncertainty And Business RiskPortfolio ManagementPredicted Market SituationsProblem PlanningPredictable PlanningInvestment ManagementMarket-Backed Dynamics All this resulted in DuPont’s Related and Unrelated Diversification Previous Impact?Profits – Less focus on Portfolio management – No market backed Dynamics10 years? Outsourcing – Interrelated Market Dynamics – Supply & Logistics partnering – Tools & Deep Analysis – Research – Consumer Insight Demand?Major Industries for Developed/Developing countries Demand will increase.Competition IntensityLarge # of Competitors – Learning from every Move of DuPont – Brutal CompetitionProfitsIndustry has been visible with High profits.

Regulatory InfluencesRecent Lenient Trade PoliciesFocused on Trade AgendaEconomic Growth Low Barriers Government SupportAll this resulted in Favorable condition for DuPont.Previous Impact?Not high Profits – Strict Trade Policies – High Tax Rate – Discouragement– Much not benefited from Globalization10 years?

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Outsourcing – Global Market Dynamics – Supply & Logistics partnering around the world – whole World as ConsumerDemand?Major Industries for Developed/Developing definitely increase.Competition IntensityWhole world as Competitors – Learning from every Move of DuPont – Brutal CompetitionProfitsIndustry has been visible with High profits.

Product Innovation

The United States has the most advanced software and information technology services industry in the world. The industry has increased its revenue by an average of six percent between 2010 and 2011, totaling $606 billion in 2011. Overall, research and development spending in the United States information and communications technology (ICT) sectors increased by 6.3 percent to $126.3 billion in 2011. The United States accounts for more than 55 percent of global ICT research and development. There are more than 100,000 software and information technology (IT) services companies in the United States, and more than 99 percent are small and medium-sized firms (i.e., under 500 employees). U.S. software firms operate in a mature, harmonized market and have a reputation for producing reliable and effective solutions that accelerate quickly to the marketplace. The International Data Corporation (IDC) estimates that U.S. demand for software will increase more than 7 percent to $163.9 billion in 2012, and that demand for information technology services will rise 4.2 percent to $235.6 billion from the previous year. IDC surveys show that infrastructure projects are high priorities for U.S. businesses, and interest is growing rapidly in collaborative tools, green information technology, cloud computing and mobile applications. 

DUPONT is engaged in providing IT solutions to the needs of the people. In USA IT industry is growing rapidly creative more innovation solutions acquiring customers at more personal level.

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Company is engaging in product innovation for the various industries it serve thus fulfilling the gap. Here are certain points where company is focusing innovation

1. By 2050 global food production will double and also its consumption would also increased so dupont provide in- feed animal to bio security solutions

2. DuPont, helps manufacture crop protection food so that they can feed the world through healthy way. Moreover improving the quality and quantity of world food supply.

3. Professional landscaping product4. By combining conventional and new technologies, DuPont Pioneer is

delivering solutions to help meet the needs of a growing population whose demand for agricultural seeds and products continues to increase.

5. With innovative ingredients and formulation support, dupont helping manufacturers meet the needs of an increasingly health-conscious consumer.

6. DuPont brings together a wide range of sustainable food ingredients to increase the quality of food products, while improving their health profile and shelf life.

7. Dupont introduced GENENCARE , a  range of natural active ingredients that deliver benefits across skin and hair care applications

8. Today DuPont is reducing commercial construction operating costs and helping create more efficient, sustainable residential and commercial buildings for a greener, healthier world.

9. Industrial biotechnology solutions from DuPont address markets such as animal nutrition, food, detergents, textiles, carpets, personal care and befouls.

10.  Dupont help their customer so that they can cost-effectively overcome their challenges by providing range of additives and modifiers for polymers.( process innovation )

Previous Impact?Less innovation with less availability of resources to manufacture science and technological products

10 years?

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With increase in technology and technological products leads to increase in consumer challenges (health, environmental issues , more usage of preservatives in food, more organic food and food ingredients causing various health issues)

Demand?Major Industries for Developed/Developing countries Demand will increase.

Competition IntensityLarge # of Competitors – Learning from every Move of DuPont – Brutal Competition

ProfitsAs company is opting a range of innovative product lines thus its profits are expected to be increasing its profit was almost 770 billion U.S. dollars in 2012. 

Technological change

Agilent technology, sigma Aldrich

The business of chemistry has undergone two such major waves of innovation and is currently in the beginning phases of a third wave of chemistry due to latest and rapidly increasing and changing technology in process.

Now the growing importance of biosciences will engender a slow shift toward biological raw materials and processes. As a technology platform, biotechnology has already captured 15 percent of life sciences and is now beginning to diffuse into basic chemicals. This can only grow during the next two decades, and growth will be further aided as life sciences, the primary focus of these innovations, will be the fastest growing segment. The emergence of the biosciences will lead to traditional process equipment being supplanted by equipment now employed in biotechnology. Moreover, the evolution towards a more biological-based technology platform has implications for the chemical industry as these technologies are less energy intensive and generate less pollution. It is likely that this evolution in the science and business of chemistry will only intensify in the decades to come in the third wave of innovations. Although traditional chemistry

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will remain the mainstay of basic chemicals, the effects of this third wave of technological innovations will be profound.

Previous Impact?chemical manufacturing was small scale, fragmented, and largely focused on local and regional markets. Industries such as textiles and paper were transformed by chemistry, and after the turn of the century, new industries such as aluminum and oil refining emerged because of developments in chemistry. Innovations in catalysis and high pressure reactions in combination with abundant resources of oil and natural gas-based hydrocarbon feedstock (or raw material) made this wave possible

10 years? Now the growing importance of biosciences will engender a slow shift toward biological raw materials and processes. As a technology platform, biotechnology has already captured 15 percent of life sciences and is now beginning to diffuse into basic chemicals. Although the US chemical industry is clearly recovering from the global recession, production facilities in China and the Middle East are being built at a rapid pace

Demand?The evolution towards a more biological-based technology platform has implications for the chemical industry as these technologies are less energy intensive and generate less pollution. Demand for biochemical has increased.

Competition IntensityLarge # of Competitors – Learning from every Move of DuPont – Brutal Competition

ProfitsAs company is opting a range of innovative product lines thus its profits are expected to be increasing its chemical output value was almost 770 billion U.S. dollars in 2012. 

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Marketing innovation

US chemical companies are increasingly focused on emerging markets, recognizing their tremendous market potential. China is expected to add approximately 500 million consumers between 2005 and 2020 Equally significant market opportunities exist in India. The country is currently the second-biggest market in Asia with a population of 1.12 billion. However, by 2025 the population of India will approach that of China due to the Chinese government’s policies restricting births. Meanwhile, India’s population will continue to drive increased levels of consumption. By 2015, over 63 million Indian households are expected to reach a household income of over US$6,500 annually,44 ensuring greater demand for food and healthcare products as well as consumer goods like automobiles, housing, home appliances and items for personal care. Undoubtedly, however, global overcapacity and emerging market competition will continue to change the market dynamics of the US chemical industry.

Dupont uses different tactics to gauge with customer, identify their needs and then provide an appropriate chemical solutiomns. They are making people and companies aware of the major problems the world is facing Acid Rain Program, NOx Budget Trading Program, Clean Air Interstate Rule, Regional Greenhouse Gas Initiative, Midwestern Greenhouse Gas Reduction Accord and the Western Climate Initiative

Entry or exit of major firms Chevron Phillips Chemical Company, Eastman Chemical Company

Diffusion of technical knowhow across more companies and more countriesAmerica , Japan, china , European countries are at the major pace of competition in technology . US chemical companies are also concerned with the Regulation on Registration, Evaluation, Authorization and Restriction of Chemicals (REACH). Although expensive and time-consuming, research and development is crucial to the industry’s evolution. To keep competitive the industry must find new products which enhance the quality of life adapt rapidly to changes in consumer demand around the world produce and sell

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chemicals in quantities that achieve economies of scale select locations for bulk chemical companies.

Strategic group for DuPont:

Dupont main competitors are Monsanto Company which is a publicly traded American multinational agrochemical and agricultural biotechnology corporation headquartered in Creve Coeur Greater St. Louis, Missouri. It gives great competition to DuPont in terms of many of its chemical, biotechnological and agriculture products.

Geographical coverage by Monsanto : 68 countries

Geographical coverage by Dupont: 73 countries

1.7 1.8 1.9 2 2.1 2.2 2.3 2.4 2.5 2.63.04

3.06

3.08

3.1

3.12

3.14

3.16

3.18

3.2

3.22 Y-Values

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G

E

O

G

R

A

P

H

I

C

A

L coverageVertical integration

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At 0 – 1 the coverage is national At 0 – 1 the vertical integration is limited

At 1 – 2 the coverage is international At 1 – 2 the vertical integration is partial

At 2 – 3 the coverage is global At 2 – 3 and above vertical integration is full

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Identifying Strategically Relevant Industry Features

Market Size and Market GrowthWhole world is the market for DuPont irrespective to their origin they have the opportunity to grab the whole market across boundaries. Their business including agriculture and nutrition, safety and protection and performance materials, among others, align with our commitment to develop sustainable market solutions for the world. Our market solutions for agriculture and nutrition provide innovative products and services that help increase the quantity, quality, safety, and sustainability of our food supply.

They leverage their strengths in biology, chemistry and biotechnology along with our knowledge of the food value chain to improve grower productivity and create innovative food sources, feed ingredients, and materials that help improve food safety. We also develop insecticides, fungicides, and high-value, low-use-rate herbicides.

Potential in Market, In the Electronics & Communications sector, they are a leading supplier of materials and systems for photovoltaic’s, electronics, flat panel displays and advanced printing markets.

As a leading technology supplier to the photovoltaic industry, DuPont offers electronics and communications environmental solutions designed to help increase the efficiency and lifetime of solar modules, and ultimately, lower total system costs for power.

They also offer a broad portfolio of materials for semiconductor fabrication, as well as innovative materials for printed circuit board applications. We develop materials for plasma displays and new technologies for liquid crystal displays (LCD) and organic light emitting diode (OLED) displays and lighting.

DuPont sales in emerging accounted for 31 percent of the company’s $26.1 billion sales in 2009. DuPont projects its market opportunity for emerging markets to be approximately $12 bi by 2012.

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Last the huge Market size and many untapped markets are attractive feature of this industry.

A pre-eminent driver of global transformation is the world’s growing population. In the last 10 years, more than 1 billion people have joined the global population which is now estimated at 6.8 billion people, to exceed 7 billion in 2011. By 2050, the world’s population will escalate to 9 billion – adding about 150,000 people each day for the next 40 years. Most of the world’s population growth is coming from emerging markets. To accommodate this explosion, economies are evolving at rapid paces. The emerging markets have different local challenges. Infrastructure, such as highways and rail, are being constructed in places that never before had roads. New ways to protect lives in a world that is more densely populated are being developed. In many instances, emerging markets are step-changing incumbent technologies. Countries such as China and India are building high-speed rail. E efficient construction is taking pl across the emerging markets. Innovation is delivering the high quality, sustainable materials growing economies demand.

Our approach to the increasing population needs more food, energy, better infrastructure and transportation, and a greater emphasis on safety and protection. Market-drive plays a key role in our ability to penetrate and grow in an emerging market. We initially establish relationships with strong local supply chains and build a base of business with our existing offerings. As we gain market insight, we use our science capabilities to develop products that are tailored to the unique demands of the local market.

Position in Life Cycle

Industry as well as its products are at the stage of maturity that is why DuPont is continually striving for more innovative products and industries.

Like human beings, products also have a limited life-cycle and they pass through several stages in their life-cycle. A typical product moves through five stages, namely—introduction, growth, maturity, decline and abandonment. These stages in the life of a product are collectively known as product life-cycle.

The length of the cycle and the duration of each stage may vary from product-to-product, depending on the rate of market acceptance, rate of technical change, nature of the product and ease of entry. Every stage creates unique problems and opportunities and, therefore, requires a special marketing strategy.

The industry of DuPont is somehow on growth stage and DuPont in on the maturity stage of their life cycle.

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Number of Rivalry

They are working in 15 industries and Competing world wide with means large number of Competitors like A. Schulman, Inc. Aemetis, Inc. DuPont is competing with all international brands all over the world that opens a door for numberless opportunities but somehow this gives a tough time by making the entire world your competitors and results into brutal competition.

Buyer NeedsCustomer Taste and Preferences are continuously changing with the changing times, dupont needs to undertake these changes. Similarly Environmental changes are also been given a lot of importance by USA and that’s why this industry is focusing a lot on these laws. Dupont is striving Better to Best to have maximum market share from industry. It is focusing on Attributes, Quality and Pricing.And drivers of change to compete in this industry.

Production Capacity

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DuPont has High Production Capacity but produces rationally. The industry has opened a great deal of opportunity for dupont to have maximum production capacity and move in different parts of the world to utilize that capacity. For them they have the whole world as their market and hence the industry offers them enough good capacity.

Vertical IntegrationSupply chain Partnering, Over took Chemical Production. Acquired many Chemical Firms. These three steps have helped dupont to have a prominent position in the industry.

Product Differentiation & InnovationGlobal Solutions, DuPont Kevlar DuPont & Johnston Innovation Center are helping dupont for the product and process innovation and having them a good position in the industry.

Economies of Scale

Production

Distribution

Ordering Supplies

Learning Curve

The industry has a learning curve with a high effort and high proficiency. Dupont has a good and higher learning curve in the industry in which it is playing since many years. This gives competitors a tough time to cover that curve but also helps them to learn from that curve.

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PESTLE Analysis

PESTLE ANALYSIS:1. Political

DuPont is USA based IT and chemical solution providing company. Ithas a stable economy and government system. That leads to a Positive impact on businesses. It also supports Privatization of economy and innovation. USA has a strong democratic setup and effective rule of law, with elections that are considered fair and transparent. The country enjoys massive political and economic influence over both national and global policymaking, and is recognized as the leading superpower in the world. Tariff policy indicated the direction of U.S. Foreign policy toward a particular nation or bloc of countries. It could be used as a defensive tool. Low corporate tax rates are critical to allowing American chemical companies and other manufacturers to compete effectively in global markets. To help promote innovation in the business of chemistry and overall U.S. manufacturing, tax policy must advance research and development and protect America’s intellectual and technological capital.

2. Economical DuPont was establish in 1802 and it has achieved its target point now expand in more than 70 countries with expansion of product line.US industries have achieved its target and now they are producing sustainable products and services means Good economic Conditions. The Growth is seen to be Positive.Economic growth of DuPont is as follows depicting a positive image:

Revenue were 35310$ Payment to Government 1167$ Dividend payment 2058$

Taxes and its impact is as follows:

As more the taxes, more investor turnover rate in that country.Tax rate is different in most develop countries is

North America= 713 Asia= 134 Latin America= 103 Europe= 217

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That’s why DuPont is targeting Developing countries more.

Interest rate has its own impact. The more interest rate in US for lending more people prefer to invest here.As in USA interest rate for saving purpose is less than 2% so it discourage them to save money.It is beneficial for US companies to do business there.In 2012 it was 1.4% and in 2013 it was 1.7%.

3. Socio-cultural factors

US total Population is approximately 320,596,000. Population growth rate is positive at 0.7%. Developed countries are seeking new technology and favores new innovative businesses.About 82% of Americans live in urban areas. Income distribution is also greater in USA thus I.T supporting businesses will flourish inCountries like USA who favors and support IT businessIn countries like USA people are more work oriented, quality oriented, work oriented, growth oriented. They have more awareness about their rights .the Literacy rate is also approx. 99%. They have a welcoming attitude towards innovation and new ideas. More income shifts to the wealthy, who tend to spend less of each marginal dollar, causing consumption and therefore economic growth to slow. Greater social mobility due to income distribution

4. Technological:

Technology is Improving the nutritional values of food.Introduce the (GTS)geographical information system, (GPS) global positioning system, (RS) removing sense.By using all above systems formers can maximize the benefit and reduce the cost ratio.Speed of new Technology is High as well it life is LessKevlar Fiber: use to check the earth 10miles below the surface.Expenditures on R&D: There is trend of expenditure on r&d by US2007=2.7, 2008= 2.8, 2009= 2.7, again in 2012= 2.7 In other countries Japan and south Korea expenditure is above 2.9 per year.

5. Legal

a. Competition law:

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DuPont is 33rd largest company of USA who provide chemicals and its main competitors are arch-river, BASF AG where DuPont compete by offering differentiated product with petro chemical operations.

b. US anti-trust law:

In legal law US prohibit those practices which restrict free trading and competition among companies. Super visioning the merger and acquisition of larger corporations that are considered to be threaten competitive environment prohibited all together.

c. Employees health safety law: Learning and practice program about new technology. Safety programs protect employees from injury and transform workplace safety.HR training programs: create a respectful workplace. Faster ethical decision making. Develop the skillful employees. Maintains and reliability training: improve employee’s core, industry and job specific competencies.Enhance operational efficiency

d. Product safety:US laws about safety of products and friendly usage: product develop through bio technology go through rigorous testing regularity excretion for food.

6. Environmental

a. Automotive sectorTransportation Equipment Manufacturing, Motor Vehicle and Motor Vehicle Parts and Supplies Merchant Wholesalers, and Automotive Repair and Maintenance. Industries and facilities in these sectors engage motor vehicle manufacturing, sales and salvage, and repair and maintenance services, for cars, trucks, trailers, and other motor vehicles.

b. Construction Construction of buildings or engineering projects (e.g., highways and utility systems)Establishments such as new construction and establishments primarily engaged in subdividing land for sale as building sites also are included in this sector. Electric power generation, transmission and distribution

c. Utility sector

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Electric power generation, transmission and distribution are part of the utilities sector. This sector includes all electric generating facilities powered by fossil fuels, including coal, petroleum, or gas as the power source.

d. Transportation and WarehousingThis includes industries providing transportation of passengers and cargo, warehousing and storage for goods, scenic and sightseeing transportation, and support activities related to modes of transportation. Establishments in these industries use transportation equipment or transportation related facilities as a productive asset.

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PORTER’S FIVE FORCES

PORTER 5 FORCES:

1. Threat of new competitors: a. Tariffs and international trade restrictions & Regulatory Policies

President Obama introduced new Trade policies in Jan 2015 that Leads to increase in trade and low tariffs hence Low Barriers for Entrants. This will allow for increases in the number of new competitors, hence, an increased risk of more competitive market.

b. Capital Requirements The capital requirements are very high, as the entry costs are high. Also, the finance required to bring oneself to the level of DuPont, a well-established company will be difficult for the new entrant. Cost of production will be high initially, hence High Barrier for Entrants.

c. Brand Preference Dupont is well established for more than 200 years. It has made his name in the market on the basis of trust, quality and consistent customer satisfaction. Hence, the Barrier for new Entrant will be high.

d. Distribution Channel In order to establish in the market, the new Entrants need a world wide distribution channel. The need to have diverse field distributors and the country to country difference of laws and agreements would render the new Entrant ‘s competitive power Low.

e. Cost and Resources are not Related to Size Dupont is a well established business emcompassing 15 diversified industries and boasts latest innovative technology. The world wide operations and logstics of company would prove a high barrier for a new competitive Entrant .

f. Economies of Scale Being a large scale business established and expanding over the last two centuries, Dupont has achieved the economy in scale by virtue of large scale production. Hence the new entrants will have to face this hurdle, a barrier for new entrant.

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Conclusion: Barriers are high.

2. Threat of Substitutes Products a. Availability & Affordability

If the new entrants or competitors target specified segments with the strategy of low prices and aim to be global this can be a high power threat.

b. Quality and attributes Competitors are attracting the customers with low prices for the same quality and attributes. Hence this also makes the threat power high.

c. Switching costs 15 industries means a larger of competitors with large range of similar products hence low cost of switching and power is high

Conclusion: High power of Substitute Products.

3. Bargaining power of suppliers a. Supplies Availability, Affordability & Quality & Attributes

Strategic Planning and Supply chain Partnering and Low Cost of supplies from under develop regions.this threat’s power is low

b. Number of Supplier DuPont has high number of suppliers that includes global suppliers too hence this is also a low power threat.

c. Switching Costs Diverse Industries means large of suppliers with large range of similar products hence low cost of switching and power is low

d. Differentiation products Supplies are differentiated because of the differentiated product line but due to agreements, law and order, government support supply chain partnering. Its power is low.

Conclusion: They have low bargaining power.

4. Bargaining power of buyers: a. Switching costs

15 industries means a larger of competitors with large range of similar products hence low cost of switching and power is high

b. Number of buyers

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Dupont has a large market size. It also has some untapped markets that it plans to target next such as in developing countries. It has 15 industries that means it targets huge markets hence making this power low.c. Pressure and demand from buyers

There is a great pressure and demand from buyers due to changing market trends, new technologies and innovation that leads to change in tastes of the buyers. This may lead to switching brands if not met by their requirements. there is a high choice in brands hence power is high.

Conclusion: They have low to medium bargaining power

5. Rivalry in existing markets

Competitors may have the tactics of differentiated price than DuPont as in low price for same quality products and targeting specified segments and niches with a high frequency. They are also reaching towards the under developed countries with similar products and keeping low prices giving a good competition and creating rivalry.

They are learning from DuPont’s existing strategies and its curve. But they lack on term of diversification when compared to DuPont. It also lacks on other basis such as economies of scale and size. Large and strong markets require innovative products that lead to opportunities of competitors to take away DuPont’s innovative products.Strategic moves of logistics, marketing and government support factors are also there. Conclusion: Power is Medium to High

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KEY SUCCESS FACTOR ANALYSIS:

1. Technology related KSF of DuPont:

• DuPont provides scientific solutions to the customer around the world. Their customers are households, industries, manufacturing companies, governments and many other organizations working to build standard solutions for customers, DuPont gain a competitive advantage with motivated highly trained workforce who are motivated to work in teams and provide best possible chemical and agriculture solutions to customers around the world. DuPont has an experienced and highly trained technical team with a wealth of knowledge about the use of products in various end-use applications and throughout a range of coatings, manufacturing processes, manufacturing of raw materials that are further supplied to other chemical partners. Industrial biotechnology holds great promise to solve global challenges, offering new potential for meeting the world's demand for food, feed, fuel, materials, and more while reducing our impact on the environment. Company spends heavily on R&D as it believes in continuous innovation to remain leaders and pioneers in automotive coating industry. DuPont have the ability to improve its production processes but achieving economies of scale is difficult because it provides technology related solutions.

2. Manufacturing related KSF of DuPont:

DuPont is putting science to work to help customers succeed with innovative and sustainable solutions that improve the performance while reducing the manufacturing cost of LED lighting and displays. DuPont collaborates with equipment manufacturers, converters, brand owners and retailers to develop application-specific packaging solutions. Their packaging technologies range from packaging resins and sealants to anti-counterfeit solutions, non-woven substrates, and grease-resistant coatings for DuPont, environmentally friendly packaging as an immediate opportunity. By reducing their environmental footprint, companies can increase differentiation and brand loyalty with consumers and actually move form and function forwards DSS offers customized solutions across numerous areas of excellence: workplace safety, employee training programs, environmental management, energy

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efficiency, process technology licensing, asset productivity, and capital effectiveness. DuPont science informs all its manufacturing products. This includes polymers that easily mold plastic or metal into next-generation designs, or brighter, more alluring textile dyes. It also means lubricants that lower maintenance costs by reducing equipment breakdowns and bacterial tests that prevent product loss by spotting contaminants.

3. Distribution related KSF of DuPont :

Lipscomb Chemical Company, Inc. Brandt TechnologiesDurr Marketing Associates, Inc.Deeks & CoVan Horn Metz & Co Inc

Above mention are few distributors loacted in USA .

DuPont Distribution Spans United States and Reaches 40 Countries in Europe, Middle-East and Africa.

4. Quality control:

DuPont Industrial Biosciences uses a variety of resources, methodologies and tools to ensure that only the highest quality products reach their customers’ sites. To gauge how effectively customer needs are satisfied, they conduct worldwide customer satisfaction surveys on a regular basis. The results are used to identify new ways to improve product quality and delivery, for example, making changes to product packaging. They use local manufacturing sites as a multi-faceted supply chain survey program to ensure consistency in quality. With this they form a high diversity in their products and offerings.

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They have gained certificate for quality control every year which ensures that their products and services are consistent with quality.

5. Marketing Related KSF of DuPont: Breadth of product line and product selection are as follows:

Additives and modifiers

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Apparels and textiles

Composites, Interlayers & Laminates

Consulting Services & Process Technologies

Crop Protection

Fabrics, Fibers & Non-Woven

Display & Lighting Materials

Food Protection

Industrial Biotechnology

Packaging Materials & Solutions

Personal Protective Equipment

Pigments, Colorants & Dyes

Solar / Photovoltaic Materials

Printing & Package Printing

Pharmaceutical

Show categories in this group

Plastics, Polymers & Resins

Professional Landscaping Products

Wire & Cable Materials

Sporting Goods

Seeds

Personal Care

Membranes and films

Home gardens and car care

Food ingredients

Electronic and electrical materials

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Dietary supplement ingredients

Cookware and bakeware

Construction materials

Chemicals compound and solutions

Animal nutrient and disease prevention

DuPont team is comprised of well-respected industry experts who work closely with customers to ensure products deliver optimal performance. This give rise to service base compatibility model in dupont. the shifting needs of their customer base had given them the same impetus as high-tech companies to integrate a full array of services into their core business in order to meet their customers’ changing business problems. Through the DuPont Authentication Team, and with support by DuPont Crop Protection, they are working with growers, distributors and law enforcement to stop counterfeit and illegal pesticides. DuPont initiated the Global Anti-Counterfeit Program in 2003 to help protect our distribution channel, and growers, from counterfeit pesticides. Stopping faulty products from affecting the agricultural community is part of a larger, industry-wide effort involving global-to-local collaboration. They are focused on helping protect distribution channels and growers around the world, engaging with enforcement authorities through widespread communication, to help raise awareness of the issue. These efforts also make use of advanced anti-counterfeit technology, such as the DuPont™ Trace ology® product tracking system and Izon® 3-D hologram security labels, as well as a number of additional technologies.

6. Product innovation: Product innovation capabilities is present in every brand of DuPont due to

rapid rate of diffusing in technology the company is increasingly innovate providing solutions to customers better than many of its rivals. The DuPont Company is all about providing sustainable, technological and innovative solutions to customers their sustainable growth efforts drive them to create products that reduce the use of energy, water, and materials and encourage the development of products based on the use of renewable resources. They

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are innovative in every sector making sure to reduce the waste, protect the environment and people all around the world.

7. Patented products and designs: Trademarks are exclusive names or symbols, protected by law, and used to

identify a company’s products. Trademarks are among the most valuable assets of any company. One way to secure the brand and product from being copied is through trade mark and patents. Many of the DuPont products and services are patented that makes them distinctive among many in the market.

Competitive strength assessment:

Key success factor Weightage %

1.Technology and scientific research

10

2.Technical expertise 10

3.Continous innovation 8

4. Continuous improvement in production processes

8

5.Economies of scale 5

6.Customized solutions 7

7.Strong distributors network 9

8.Quality control 10

9.Product and services (brands) 10

10.Labor productivity(services) 8

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11.Clever advertising 9

12.Product innovation 10

13.Strong relations with its distributors and suppliers

7

14.patents 5

Total 83 %

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Group Mapping & Scenarios

Strategic group mapping for DuPont:

DuPont one of the major competitor is Monsanto Company which is a publicly traded American multinational agrochemical and agricultural biotechnology corporation headquartered in Creve Coeur Greater St. Louis, Missouri. It gives great competition to DuPont in terms of many of its chemical, biotechnological and agriculture products. Another competitor is Dow chemical company which provides agriculture and biotechnological solutions apart from chemicals.

Geographical coverage Vertical integrationMonsanto 68 countries 70 %Dupont 73 countries 65 % Dow chemical

180 countries 80 %

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60 80 100 120 140 160 180 2000%

10%

20%

30%

40%

50%

60%

70%

80%

90%

MONSANTO, [Y VALUE]

DUPONT, [Y VALUE]

DOW CHEMICAL, [Y VALUE]

Dupont major competitor globally and nationally are Dow chemical company and Monsanto Company. Both these company provide worldwide agricultural and biotechnological solutions. Geographical area covered by Dow chemical company is largest covering 180 countries where as Monsanto and DuPont covers area of 68 countries and 73 countries respectively. Dow Chemical is highly vertically integrated company as compared to DuPont and Monsanto.

Product line Product breadth

Monsanto company 2 medium 2 medium

DuPont company 3 strong 2.5 strong

Dow Chemical company

2.5 strong 2.9medium

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Product line vs product breadth:

1.8 2 2.2 2.4 2.6 2.8 3 3.20

0.5

1

1.5

2

2.5

3

3.5

MONSANTO, [Y VALUE]

DUPONT, [Y VALUE]

DOWCHEMICAL;, [Y VALUE]

Industrial biotechnology solutions from DuPont address markets such as animal nutrition, food, detergents, textiles, carpets, personal care and biofuels. They have already created the first biomaterials with Bio-Propanediol (Bio-PDO®) and Sorona®, and are making important steps forward with our cellulosic ethanol technology. They have done excessive product line extension due to shift in market trends such as population control policies opted by many overpopulated countries, measures taken by WHO to control child death due to lack of nutrition’s. Product line extension done by Monsanto is nearly medium because they skim there profits from the agriculture and biotechnological sector only not tapping to any of the new product line. Moreover Dow chemical more emphasize on biotechnological products and solutions to secure environment from pollution. DuPont has repositioned itself, selling off its car-paint unit to Carlyle Group for almost $5 billion last year and now looking to divest its performance chemicals business as well. By doing so, DuPont will increase the importance of its seed and agricultural chemicals segment, where it's much more exposed to competition from Monsanto and Dow Chemical among others.

Extent of brand extension vs distribution channels used

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Extent of brand associations x-axis Distribution channels used y-axis

Monsanto company

1 Weak 2 medium

DuPont company

2.9good 3 high

Dow chemical company

3 good 2.9 High

1.8 2 2.2 2.4 2.6 2.8 3 3.20

0.5

1

1.5

2

2.5

3

3.5

monsanto company, [Y VALUE]

dupont, [Y VALUE]dow chemical company, [Y

VALUE]

Monsanto Company recently listed as 3rd most hated company in USA and lost its brand reputation due to substandard and not up to the mark products are sold by Monsanto to the channel which in turn sells product to the end-use customers. The end-use customers are farmers, industrial users and government agencies (such as highway departments). The channel is composed of a mixture of distributors, wholesalers and retailers. DuPont brand association and reputation is strong among its customers and stake holders, due to serving its customers with high quality products and providing them with what they promise. With its broad portfolio,

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global footprint, and extensive network, DuPont has a highly complex supply chain. Moreover Dow chemical company gets agency award Superior Achievement in Branding and Reputation. Dow Consumer & Industrial Solutions extended the distribution rights to the Sun Care product lines in the United States to Nexeo Solutions, a global leader in chemical distribution thus gain a strong distribution as well as brand reputation in the market.

Quality vs extent of product and service diversity:

Quality x-axis Product and service diversity y-axis

Monsanto company

1.5 poor 2 medium

DuPont company

3 good 2.9 good

Dow chemical company

2.8 medium-good 3 good

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1.4 1.6 1.8 2 2.2 2.4 2.6 2.8 3 3.20

0.5

1

1.5

2

2.5

3

3.5

monsanto company, [Y VALUE]

DuPont, [Y VALUE]

dow chemical company, [Y

VALUE]

 DuPont science is trusted in some of the world most critical and essential applications with promising consistent quality provided to customers. DuPont Industrial Biosciences uses a variety of resources, methodologies and tools to ensure that only the highest quality products reach their customers’ sites. To gauge how effectively customer needs are satisfied, they conduct worldwide customer satisfaction surveys on a regular basis.  The results are used to identify new ways to improve product quality and delivery, for example, making changes to product packaging. They use local manufacturing sites as a multi-faceted supply chain survey program to ensure consistency in quality. With this they form a high diversity in their products and offerings. Dow has established quality measurement systems to evaluate its progress in continuous quality improvement. Some of the tools used to monitor progress in each business include external and internal customer surveys, auditing, organizational self-assessments, performance metrics, and statistical tools. Dow has a long-standing commitment to safety, health and the environment. The company is committed to implementing the “Responsible Care” initiative -- a continuing effort to improve chemical industry’s health, safety and environmental performance. The Monsanto Company products quality declined with its brand reputation among its customers and stakeholders.

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Evaluating DuPont Strategy

Strategic & Financial Objectives

Reduction of Green House Gas Emissions by 15 %Reduction 25 %Reduction of Water Consumption by 30 %Reduction 33%Take DuPont Global in 90 CountriesOperating in 109 CountriesCutting Costs by 1.7 Billion dollars 2017.Approach Of Saving MoneyEarnings per share of 1.34 $

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Industry wise performance

Two Most Important Businesses Are Performance & Safety Materials And Agriculture & Nutrition Based Products, Accounting For Almost 40% And 29% Market Share.There could be 10% upside to the Trefis price estimate if gross margins for the division were to reach 29% instead of the current 27% Trefis forecasted.There could be 10% upside to the Trefis price estimate if market share was to reach close to 4.5% - 4.6% by the end of the forecast period.

Profit MarginsThe Company's Shares Were Down 1.6 Percent At $71.66DuPont, Which Receives 60 Percent Of Sales From Outside The United States, Said It Expects A Strong Dollar To Reduce Its 2015 Profit By 80 Cents Per Share, Higher Than Its Earlier Forecast Of 60 Cents.DuPont Is Targeting Annual Cost Cuts Of $1 Billion And Expects The Savings To Add 40 Cents Per Share To 2015 Profit.Two-thirds Of Its Cost Savings Target From Work Force Reduction.Net income attributable to DuPont fell 28 percent to $1.03 billion, or $1.13 per shareSales fell 9 percent to $9.17 BillionLower Sales in All Of Its Businesses.

Stakeholders of DuPontCriticized DuPont for missing earnings expectations.The activist investor wants DuPont to separate its materials businesses from its nutrition and health, agriculture, and industrial biosciences divisions.DuPont, which is in the process of spinning off its performance chemicals unit, has rejected the demand.Conflict of Service Outsourcing.

Acquisition of Customers109 countries, Developed and Developing countries. Low Tariffs & Government Support.Diversification in Major Industries.DuPont Major Customers  Tereos

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SiburFarmers In BulgariaFirefighting Company in UK Veitsiluoto MillUkrainian And Russian Farmers40 % of DuPont’s Market Share in Agricultural Industry.

Core Competencies of DuPont

Core competencies of DuPont:

DuPont have core competencies on two main areas which include

• Titanium dioxide : DuPont Titanium Technologies is the world’s largest manufacturer of titanium dioxide products include coatings, plastics, laminate and paper products DuPont Titanium Technologies is the world’s largest manufacturer of titanium dioxide products. We are dedicated to providing value for our customers, who subsequently supply the world with coatings, plastics, laminate and paper products. We deliver industry-leading innovation that addresses the growing worldwide demand for high quality titanium dioxide by working to create brighter, more efficient pigments.

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Even beyond the products we deliver, we also strive to be a partner that enables the development of sustainable solutions to customer challenges, further enhancing their business performance.

• Fluor chemical production : DuPont is one of the world’s most innovative suppliers of fluorine-based chemicals. DuPont fluorochemical intermediates are key ingredients in the development of formulated product in a variety of applications, including coatings, printing inks, paper products and textiles. Examples of properties of products formulated with DuPont fluorochemical intermediates include:

• Low surface energy

• Chemical and moisture resistance

• Oil and grease resistance

• Adhesion to low-energy surfaces

• Low refractive index

• Surface lubricity

• Soil and dirt resistance

• include Fluor chemicals provide solutions in cooling, energy, electronics, personal care, and communications applications, including Air conditioning and refrigeration

A distinctive competence is something that a company does better than its rivals

• DuPont, a market leader in terms of production capacity of the pigment, also has an advantage in the form of advanced manufacturing facilities. that could process both high and low concentration ores to produce a superior TiO2, through the chloride route. This helps the company manage its production cost effectively depending upon the market dynamics.

• Feedstock Prices and DuPont’s Advantage: pigment producers were under pressure because of higher feedstock prices due to supply shortages.

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And the main supplier was Rio Tinto, Iuka Resources and Troop due to shortage and few suppliers there is no options to competitor to purchase it. In this environment Its manufacturing facilities can process a variety of feedstock grades to produce the pigment It allows the company to manage its production costs effectively, according to the demand scenario

Is the resource strength hard to copy

• DuPont’s feedstock flexibility as an advantage over other players in the market.  They produce pigment through the chloride route

• which is preferred over the sulphate process due to lower associated costs and better pigment properties like color brightness, durability.

Value Chain Analysis

Value chain analysis

In 2004 DuPont move from functional supply chain to strategic part of both to corporate and individual business units. Very first step is to identify and validate each goal against competition through benchmarking at the corporate level. The benchmark was identified $1billion as working capital and $600billion in cost over several years while increasing product line.

Key related matrix on inventory performance and customer service and lead time in supply chain would help to compare performance internally and externally against competitors These goals consider as critical points in

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strategic plan In 2004 and 2005 duPont work on system, process challenges. Furthermore DuPont think that their employees are chemical engineer but they lacked fundamental supply chain practices DuPont shifted its focus to employee’s capability for fundamental supply chain management.

DuPont introduce APICS in its operations

SWOT Analysis of DuPont

DuPont SWOT Analysis

“SWOT is an acronym for the internal Strengths and Weaknesses of a firm and the environmental Opportunities and Threats facing that firm. SWOT analysis is a widely used technique through which managers create a quick overview of a company’s strategic situation. The technique is based on the assumption that an effective strategy derives from a sound “fit” between a firm’s internal resources (strengths and weaknesses) and its external situation (opportunities and threats). A good fit maximizes a firm’s strengths and opportunities and minimizes its weaknesses and threats. Accurately applied, this simple assumption has powerful implications for the design of a successful strategy.”

DuPont

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E.I. du Pont de Nemours & Company (DuPont) is a US-based technology and science company offering a diverse range of products and services for various markets, including agriculture, nutrition, electronics, communications, safety and protection, home and construction, transportation, and apparel. DuPont has strong research and development capabilities. The number of US patents granted has increased more than 50% for DuPont’s five growth platforms and embryonic businesses. In 2007, the company was granted about 600 US patents and about 1,500 international patents. However, slowdown in the US economy and the European Union would depress revenue growth and reduce margins of DuPont.

DuPont SWOT Analysis Strengths, Weaknesses, Opportunities and Threats

(SWOT)

Location of Factor Favorable Unfavorable

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Internal

Strengths Leading market

position Strong R&D

capabilities Diversified

revenue stream Brand Name of

DuPont Government

Support

Weaknesses Administrative

action Legal

proceedings Changing

Tariffs and Regulations

Weak relations of American Gov with many countries of world.

External

Opportunities Technological

advancements Growing

photovoltaic (PV) solar energy market

Aging global population and increasing healthcare spending

Expansion of Animal Health Solutions

Business in Asia

Threats Economic

slowdown in the US and the European Union

Risks associated with conducting business outside the US

Environmental regulations

New competitors learn from Dupont Learning’s curve.

TOWS Matrix

Matrix is proposed in which 'T' stands for threats, 'O' for opportunities, 'W' for weaknesses and 'S' for strengths. The primary concern here is strategies, but this

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analysis could also be applied to the development of tactics necessary to implement the strategies, and to more specific actions supportive of tactics.(I) The WT Strategy (mini-mini). In general, the aim of the WT strategy is to minimize both weaknesses and threats. A company faced with external threats and internal weaknesses may indeed be in a precarious position.In fact, such a firm may have to fight for its survival or may even have to choose liquidation. But there are, of course, other choices. DuPont needs develop relationship with other countries. They have to reduce all the weaknesses and threats w.r.t to duPont.

(2) The WO Strategy (mini--maxi). The second strategy attempts to minimize the weaknesses and to maximizetile opportunities. A company may identify opportunities ill the external environment but have organizational weaknesses which prevent the firm from taking advantage of market demands. If DuPont focuses on health concerns, it can entre many Asian countries as well the countries it feel that due to American weak relationships they are hesitant to entre in such countries. If they are successful in introducing such technology that is a need of rest of the world those countries will offer them Zero or low tariffs.

(3) The ST Strategy (maxi-mini). This strategy is based on the strengths of the organization that can deal with threats in the environment. The aim is to maximize the former while minimizing the latter. Through the government support they can minimize the risks of conducting business outside America. The diversification of DuPont in such wide industries can slow the growth of their emerging competitors. Conducting businesses in Asia and other countries can minimize the risk of economic down turns of US economy.

(4) The SO Strategy (maxi-maxi). Any company would like to be in a position where it can maximize both, strengths and opportunities. Such an enterprise can lead from strengths, utilizing resources to take advantage of the market for its products and services. Get the best technology from around the globe to grab even more market share and become market leader. Have strong R& D and select countries that will be more concerned for health care. Through the government support they can entre in Asia.

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Space Matrix

DuPont Company Space Matrix

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After the analysis of all the details we conclude that in Competitive advantage, Market share is best for dupont. Similarly the brand image of dupont is at an excellent pace. As the technological advancements are taking place rapidly the dupont is coping with them at a good rate but needs to be equivalent of wants to succeed at higher rate hence is marked as -2.Yet again the loyalty and PLC and supplier relationships are in a good position. Coming towards the Environmental Stability all factors are under the control of dupont and are enough favorable but as dupont is moving towards the whole world as target market, its competition is increasing hence is somehow not favorable that’s why rated as -4. Coming towards the financial strength all factors are favorable for Dupont but they need to work on reducing the turnover rates of inventory as they are counting and increasing the overhead costs for them and similarly they need to be in a position where they can be in good liquidity rate that’s why rate as +4. Least coming towards the industry strength they need to make sure that new competitors have a hard time in entering into the industry and US right now is providing opportunities for new entrants but dupont has a advantage that all new entrants can’t have competition at the level of dupont that’s why marked as +4.After the results the both values (3.50, 3.17) lies in the first quadrant that is the Aggressive Approach. DuPont can undertake following strategies like Market

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penetration by introducing its products in all markets deeply, market development going into Asian Markets, product development, Innovative products. Backward integration, forward integration, horizontal integration, conglomerate diversification, concentric diversification or a combination strategy all can be feasible.

(3.50, 3.17)

QSPM MatrixQuantitative Strategic Planning MatrixSWOT Market

DevelopmentAsian

InnovativeProducts, Purchase

Acquire CompetitorSchulman,

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Markets new Technology

Inc.

Strengths Leading Market position 5.1

R&D capabilities 5.2 Diversified revenue stream 5.2

Brand Name DuPont 5.11

Government Support 5.23

4=20.4

3=15.6

3=15.6

2=10.22

2=10.46

1=5.1

2=10.4

4=20.8

2=10.22

4=20.92

3=15.3

3=15.6

3=15.6

3=15.33

3=15.69

WeaknessAdministrative action 5.1

Legal proceedings 5.3

Changing Tariffs 6 and Regulations

Weak relations of American Gov with many countries of world. 5.00

Opportunities

Technological advancements 8

4=20.4

2=10.6

3=18

1=5

4=24

4= 20.4

4=21.2

3=18

3=15

3=24

3=15.3

2=10.6

3=18

4=20

3=24

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Growing photovoltaic (PV) solar energy market 3

Aging global population and increasing healthcare spending 4.00

Expansion of Animal Health Solutions 5.1

Business in Asia 6

Threats

4=12

3=12

2=10.2

4=24

3=9

2=8

3=15.3

4=24

3=9

3=12

4=20.4

3=18

Economic slowdown in the US and the European Union 3

Risks associated with conducting business outside the US 4

Environmental regulations 2

New competitors learn from Dupont Learning’s curve 5

3=9

3=12

3=6

4=2

3=9

3=12

4=8

3=15

4=12

4=16

3=6

3=15

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Total Weight age100

0

210.02 266.34 273.82

Acquiring the competitor is the best option for dupont.

Conclusion

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Dupont Is One Of The Successful Firms Of USA Because Of Their Exceptional Strategies. They Need To Keep Diversifying Related And Unrelated For Grabbing The Maximum Market Share.

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