Methanex faces three key issues: the closure of its Egypt and Chile production facilities due to natural gas shortages and unstable governments; increased competition from MHTL's expansion; and whether to maintain its singular focus on methanol or invest in China. These issues were likely caused by external factors outside of Methanex's control and increased competition seeking to gain market share. Methanex should consider diversifying its strategy, selling its closed plants, expanding into China either with or without a partner, and establish criteria for evaluating alternatives such as absorbing environmental uncertainty and considering its capital needs.
Original Description:
Notes on Methanex Developing Strategy in a Commodity Industry Case Study
Methanex faces three key issues: the closure of its Egypt and Chile production facilities due to natural gas shortages and unstable governments; increased competition from MHTL's expansion; and whether to maintain its singular focus on methanol or invest in China. These issues were likely caused by external factors outside of Methanex's control and increased competition seeking to gain market share. Methanex should consider diversifying its strategy, selling its closed plants, expanding into China either with or without a partner, and establish criteria for evaluating alternatives such as absorbing environmental uncertainty and considering its capital needs.
Methanex faces three key issues: the closure of its Egypt and Chile production facilities due to natural gas shortages and unstable governments; increased competition from MHTL's expansion; and whether to maintain its singular focus on methanol or invest in China. These issues were likely caused by external factors outside of Methanex's control and increased competition seeking to gain market share. Methanex should consider diversifying its strategy, selling its closed plants, expanding into China either with or without a partner, and establish criteria for evaluating alternatives such as absorbing environmental uncertainty and considering its capital needs.
Case Preparation Sheet created without any consultation by: Meaghan Frederickson Group # A4
ID# 100886448
Groups First Meeting Date:
Case Title: Methanex List three most: a) important observations/urgent problems and b) likely causes, c) Possible Solutions/Alternatives, d) Criteria for choosing among the alternatives Analysis of the Case a) Important observations: Urgent problems; possible opportunities a. Closing of Egypt and Chile production facilities b. Increased competition (MHTLs expansion in Trinidad) c. Singular corporate strategy (solely methanol production), should they invest in China? b) Likely Causes of or Catalysts for above a. Unstable government, natural gas shortages b. Other industry players want a piece of Methanexs largest market share c. Great opportunity to invest in China but would need to change singular corporate strategy c) Different paths, actions, changes the organization should consider a. Changing its singular corporate strategy b. Sell its closed plants in Egypt and Chile c. Expand in China without a partner d) Criteria for choosing among the alternatives a. Establish buffer departments to absorb uncertainty from the environment b. Does Methanex need the capital by selling its closed plants? e) Most relevant page numbers in the text for ideas to be used to write the report a. Page 150 Building Relationships b. Page 158 Dependence on External Resources, Influencing External Factors c. Page 60 Strategic Intent