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Internal Entrepreneurship at the Dow Chemical Company

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Submitted By milan1988
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MILAN MOHANTY INTERNAL ENTREPRENEURSHIP AT THE DOW CHEMICAL COMPANY Overview:The Dow Chemical Company is the second largest chemical manufacturer in the world in terms of revenue and in terms of market capitalization; it is the third largest in the world (as of 20071). There was a steady growth of the market from the year 2002. But before that the company faced a back drop in the profit margin. The company realized its growth in 2002 only after merging with Union Carbi as the company’s sells rose to $27.8 billion. Back in 1998, the company faced the real down turn of the sale to $18.4 billion. Then, for 4 years continuously, the company managed to keep the sales around $20 billion. In the year 2000, the company planned to adopt a different strategy to enhance the sales growth. This gave rise to the production and development of Epoxy.Com. This strategy not only enhanced the growth but also changed the status of the company in the market as an innovator in the field of agricultural products, chemicals and plastics. The primary responsible of the new strategy is to target the small customers, whom the company never served. The Epoxy products and intermediates are responsible for the production and sell of epoxy raisins that added to the manufacture of electrical laminates, composites and coatings. The new profit venture was managed from Dow’s European headquarters in Switzerland.


The new venture Epoxy was a high margin business with high capital intensive, as its 80% of the revenue came from top 20% customers. More over the venture established itself as a global profitable venture. They provided all sorts of technical help and discounts to the global customers which made them unique in the market and helped the venture to mark a base for the development.

The early realization of the boom of placed the venture in a comfortable position to take advantages of the early phase of e-market development. So the venture realized its growth and decided to step into its own web world. This led them to the early execution of plans and strategy for the success of the company.

Ian Telford, the European sales Director for EP&I can be considered as major pillar for the strength of the company. His crystal clear goals and visions for the company established an efficient procedure for the development of the company and his enthusiasm and the hunger for success motivated its employees for a better team work with success keeping in mind. He was flexible with his concepts and the strategy so that he can react as per the situation, which helped him to overcome the hurdles which came in the way of his success.

Weakness: • The company has to suffer economical loss due to its cyclic nature of production. The production does not run at full efficiency every time. This leads to the waste of energy, money and resources. • There was no transparency in the price of EP&I products which can act as a hindrance in the market. No transparency of the price can lead to a bad market status and thus leading to a heavy decline in the efficiency.

The attitude and behavior of Ian may not be a big concern for the development of the company but it can degrade the motivation which can degrade the strength and unity of the employees in the company. This can lead to downturn of efficiency and shows the sign of immaturity.

Opportunity: • The management should consider a group of customers who solely wants product at low cost rather than consignment or service. • The management should take advantages of early entry into the web world. They can target new possibilities or new markets with a very low investment. They even can sell the products on an immediate basis which can attract certain type of customers. So these multi advantages can have a much positive impact on the sales. Threats: • The corporate Information Systems at the Dow Chemical introduced a new method in which customers can track their order details. But the information system is also in search of same business with other companies which can be a threat to the new introduced strategy by the Dow Company. • A reorganization of the management in the middle of production can lead to the down turn of efficiency of the management. • The boom of the web world has threatened the old business protocol. The Dow Company was one of the industries that were using the old business protocol. If the company does not take any improve step then it can be swept under the dominance of the e-world. Also in the immediate stage the company would face problem to cope up with the new change

of business protocol, which can decrease the efficiency in the initial phase of the business. • The price transparency can act as a threat because its price goes public and will be in no control while negotiating different price with different customers. Problems and Recommendations • The changes in the management structure can put on hold to the production. So the management has to be aware of this step or be ready with the alternative step. • The introduction of different websites for different countries can prove to be very costly and time consuming. This can include lots of legal activities, currency exchange and political issue. So the management can decide one language (official language of the world) for the websites and one mode of transaction which can reduce the cost of expenditures and the time. • The introduction of new business protocol can be ineffective if the employees are not been trained or made aware of. It is advised the management should give proper training, resources and the employees should be made aware before so that they can be both physically and mentally ready to face the new challenge with greater efficiency. RESOURCES

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