Cover image for Value creation : strategies for the chemical industry
Value creation : strategies for the chemical industry
Budde, F. (Florian)
Publication Information:
Weinheim ; New York : Wiley-VCH, [2001]

Physical Description:
xx, 222 pages : illustrations ; 24 cm
General Note:
Includes index.
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HD9650.5 .V35 2001 Adult Non-Fiction Central Closed Stacks

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Corporate performance has increasingly come to be judged by shareholder value in the last few years, and chemical companies are among those embracing the trend. Written by an international team of leading experts from the prestigious top management consultancy McKinsey & Company, this book provides a guide to value creation for chemical companies which is based on first-hand experience gained in hundreds of strategic and operational consulting engagements in the industry, as well as extensive research projects.The book discusses today's challenges in an ever more rapidly changing business world. What is the relevance of capital markets to strategic decision making in chemical companies? What strategic paradigms currently apply to the industry? How can the selected strategies be implemented successfully? This book presents a detailed examination of innovative and traditional ways to create value, and offers authoritative information on the required management approaches. It includes some important recently emerging aspects such as the impact of e-commerce, biotechnology, and the role of financial investors.Although mainly directed at managers in the chemical industry, the knowledge contained in this comprehensive introduction to the area has sufficient general validity to benefit scientists, engineers, investors, students, and anyone else dealing with management issues in this and related fields.

Table of Contents

Florian Budde and Konstantin KramerRobert Berendes and Florian Budde and Konstantin Kramer and Christian WeberFlorian Budde and Brian Elliott and Gary A. Farha and Heiner Frankemolle and Tomas Koch and Rodgers PalmerThomas Rothel and Gary A. Farha and David F. HoffmeisterJoel Claret and Simon Lowth and David McVeighRolf Bachmann and Wiebke SchlenzkaRalph Marquardt and Jan-Philipp Pfander and Boris Gorella and David McVeighG. Sam Samdani and Paul Butler and Rob McNishWiebke Schlenzka and Jurgen MeffertKarsten Hofmann and Heiner FrankemolleKhosro Ezaz-Nikpay and Ulrich Horsmann and Helge JordanMarkus Aschauer and Christophe Bedier and Robert Berendes and Jens Cuntze and Heiner Frankemolle and Thomas RothelSonke Bastlein and Jan-Philipp PfanderMarkus Aschauer and Christophe de Mahieu and Philip Eykerman and Gary A. Farha and Michael Graham and Thomas RothelTomas Koch and Andre M. Schmidt and Boris GorellaPaul Butler and Robert Berendes and Brian Elliott
1 Today's Chemical Industry: Which Way is Up?p. 1
1.1 The Chemical Industry Today--a Snapshotp. 1
1.2 Eras of the Chemical Industryp. 7
2 Today's Challenge--Value Creationp. 11
2.1 Shareholder Value--Why the Recent Rise to Fame?p. 11
2.2 How Good a Measure is Shareholder Value?p. 14
2.3 Understanding and Managing Capital Market Expectationsp. 16
2.3.1 Understanding Historic Capital Market Performancep. 16
2.3.2 Quantifying Future Expectationsp. 18
2.3.3 The Impact of Strategic Actionp. 19 Delivering on Short Term Earnings Expectationsp. 19 Creating a Long Term Growth Storyp. 21 Effective Communicationp. 21
3 Strategic Choices for the Chemical Industry in the New Millenniump. 23
3.1 The Chemical Industry Today--Forces for Changep. 23
3.2 Strategies for Value Creationp. 26
3.2.1 The Focus of Asset-Leveraging Strategiesp. 27
3.2.2 The Ideas behind Knowledge-Leveraging Strategiesp. 29
3.3 The Impact of Value Creation Strategiesp. 34
4 Managing Commodity Portfoliosp. 37
4.1 The Shakeup has Begunp. 37
4.2 The New Game--Disaggregation and Focusp. 40
4.3 Overcoming Barriers to Actionp. 42
5 How to Succeed in the Rapidly Maturing Specialty Chemicals Industryp. 47
5.1 The Commoditization of Specialty Chemicals--What Happens Next?p. 47
5.2 Recasting the Portfoliop. 51
5.3 Achieving Superior Performance at the Business Unit Levelp. 56
5.3.1 Selecting a Single Winning Business Modelp. 56
5.3.2 Executing the Selected Business Model Outstandinglyp. 59
5.4 Going for Growthp. 60
5.5 Designing a Value-Adding Corporate Centerp. 61
5.5.1 Putting in Place a Lean, Investor-Type Corporate Centerp. 61
5.5.2 Ensuring Differentiated Management of Various Business Unitsp. 62
5.5.3 Driving Selected Corporate Themesp. 64
5.5.4 Sharing Best Practices Across Businessesp. 64
6 Chemical Companies and Biotechnologyp. 65
6.1 Biotechnology--the Backgroundp. 65
6.2 Attractive in Agrochemicalsp. 67
6.3 Other Chemical Businesses: Fast Moves Neededp. 71
6.4 Defining the Directions for Moving into Biotechnologyp. 75
6.4.1 Performing a Diagnostic for Individual Chemical Businessesp. 75
6.4.2 Outlining the Strategic Options for Biotechnology Portfoliosp. 75
6.4.3 Making the Transformationp. 77
7 The Impact of E-Commerce on the Chemical Industryp. 79
7.1 Winning Control in E-Commercep. 79
7.2 The Creation and Redistribution of Valuep. 81
7.3 Strategic Questions for Top Managementp. 85
7.4 How to Overcome Transitional Challengesp. 90
8 The Alchemy of Leveraged Buyoutsp. 93
8.1 The Saga of the Dealsp. 94
8.2 What is Attractive about Chemical LBOsp. 97
8.3 How Value is Created in Chemical LBOsp. 98
8.4 Infecting Chemical Corporations with the LBO Virusp. 101
8.4.1 Maximizing MandA Performance and Divestment Valuep. 101
8.4.2 Operating Like a Financial Holding Companyp. 102
8.4.3 Implementing Do-it-Yourself 'Internal LBOs'p. 102
8.4.4 Harnessing the Catalytic Power of Collaborationp. 103
8.4.5 Executing Leveraged Recapitalizationp. 103
8.5 New Roles for LBO Playersp. 104
8.5.1 Portfolio Optimizerp. 105
8.5.2 Aggressive Consolidatorp. 105
8.5.3 Spanning the Alliance Spectrump. 105
8.5.4 LBUs: Moving beyond the Conventional LBOsp. 106
8.6 Steps toward a Natural Convergencep. 106
9 Revitalizing Innovationp. 109
9.1 The Innovation Challengep. 109
9.2 Defining the Innovation Strategyp. 110
9.2.1 Focusing on High Impact Innovationsp. 110
9.2.2 Defining the Specific Company Strategyp. 112
9.3 Approaches to Stimulating Innovationp. 114
9.3.1 Clearly Structured Idea Generation Processesp. 114
9.3.2 Corporate Venture Fundsp. 117
9.3.3 New Company Structures and Incentive Systems for Business Buildingp. 119
10 Managing the Organizational Contextp. 121
10.1 Supporting Strategy by Structurep. 121
10.2 The Corporate Center--Lean but not Anorecticp. 124
10.3 The War for Talentp. 128
10.4 Corporate Culture: The Key to Top Performancep. 131
Referencesp. 135
11 Creating an Entrepreneurial Procurement Organizationp. 137
11.1 A Bold Move in Purchasing can Create Huge Valuep. 137
11.2 PSM Comes into its own when Linked with Key Strategic Challengesp. 138
11.3 Treat Purchasing Opportunities as a Business Ideap. 142
11.3.1 Captivate the Company's Attention: Create an Entrepreneurial Value Propositionp. 143
11.3.2 Capture the Opportunities: Embark on a Comprehensive Program
11.3.3 Build Capabilities: Evolve a Dynamic Organization and Design Communities of Practicep. 147
11.4 How to Unleash the Power of Purchasing: to Boldly Go ...p. 149
12 Achieving Excellence in Productionp. 151
12.1 Levers for Optimizing Production Costsp. 152
12.2 Implementing Operational Change Programs in a Chemical Plantp. 155
12.2.1 High Aspirationsp. 155
12.2.2 Step Changesp. 157
12.2.3 Continuous Improvementp. 159
13 A Customer-centric Approach to Sales and Marketingp. 163
13.1 Customer Portfolio Strategyp. 164
13.2 Profitable Long Term Customer Relationshipsp. 167
13.3 Absolute Control over the Sales Generation Processp. 169
13.4 Securing Implementation by Superior Micro-Market Managementp. 171
14 The Role of Mergers and Acquisitionsp. 173
14.1 The Case in Favor of Consolidationp. 173
14.2 Finding a Partnerp. 177
14.3 Is there an Alternative?p. 180
15 The Delicate Game of Post-merger Managementp. 183
15.1 The Obligation to Create Value
15.2 The Keys to Successp. 185
15.3 The Road to Successful Integrationp. 188
15.3.1 Phase One: Integration Designp. 189 Developing a Shared Visionp. 190 Identifying the Potential for Adding Valuep. 190 Securing Current and Future Businessp. 192 Building the Shared Performance Culturep. 192
15.3.2 Phase Two: Execution of Integration Projectsp. 194
16 Cyclicality: Trying to Manage the Unmanageablep. 197
16.1 The Drivers of Cyclicalityp. 199
16.2 Managing Cyclicality for Competitive Advantage--a Worthwhile Endeavor?p. 202
16.2.1 Getting Investment Timing Rightp. 203
16.2.2 Price Prediction as a Strategic Toolp. 204
16.2.3 If Managing Cyclicality is not the Best Route to High Returns, What is?p. 207
16.3 Cyclical Asset Tradingp. 209
Indexp. 213