BUSINESS MARKETING

CASE STUDY

ON

Peak Sealing Technologies Product Line extension dilemma

Submitted to

DR. R SUGANT

Submitted by

Group – 8

GAURAV MAHESHWARI 19019

SMRITI S 19052
KARTIK SUBAIAH P G 19084
SWAROOP B SHETTY 19115
KATTA ASHISH 19144
SHREYAS C 19169

Q2. What are the segments the company addresses?

Adhesive and Sealant Industry:
The industry could be segmented by product type as well as end-user market.

Segmentation by product included categories such as:

 Natural adhesives
 Emulsion
 Dispersion chemistries
 Hot melt formulations
 Other reactive and solvent-based adhesives

End-user demand was often segmented into the following sectors:

 Packaging – Adhesive demand in the packaging industry was at 5,045 million pounds
in 2012, a 4% net decline versus 2007. This segment represented a mature market
with demand driven by volume of packaging shipments.
 Manufacturing & assembly – Key industries for the manufacturing and assembly
market included motor vehicles, aerospace equipment, electrical and electronic
equipment, furniture and machinery. Demand for this segment was at 2,249 million
pounds in 2012 with moderate growth expected from a rebound in manufacturing
activity.
 Construction – Demand for adhesives in the construction market was 1,053 million
pounds in 2012. This segment was forecasted to be the fastest growing sector with
6.1% annual growth projected from 2012 to 2017. Growth was expected to be driven
by new building construction and increased repair spending.
 Consumer / Other – this segment comprised a great variety of adhesives for home use
such as super glue, wood glue, white glue as well as adhesives used in crafts/hobbies,
nail repair, jewellery design and other miscellaneous applications.

Q3. Map the different SBUs of PST onto GE-McKinsey 9 Box matrix giving reasons and
rationale for the mapping.
 QUESTION
MARK
STARS
manufacturing &
construction assembly

CASH COWS DOGS

PACKAGING consumer/other

Stars:
Demand for adhesives in the construction market was forecasted to grow by 6.1% from 2012
to 2017 which was driven by increased constructions and repairs. Products in this segment
seems to have a high market growth rate and market share which tends to increase.

Cows:
Packaging industries represent a mature market. It is being forecasted to grow at an expected
annual growth rate of only 1.1% from 2012 to 2017. Demand for adhesive from this segment
is expected to increase from 5045 million pounds in 2012 to 5330 million pounds in 2017 and
they contribute a good percentage of revenue to the annual sales of PST.

Question Marks:
Key industries for the manufacturing and assembly market included motor vehicles,
aerospace equipment, electrical and ssssssssselectronic equipment, furniture and machinery.
Demand for this segment was at 2,429 million pounds in 2012 with moderate growth
expected from a rebound in manufacturing activity. Products in this segment is expected to
grow.

Dogs:
This segment comprised a great variety of adhesives for home use such as super glue, wood
glue, white glue as well as adhesives used in crafts/hobbies, nail repair, jewellery design and
other miscellaneous applications. Products in this segment have very low growth rate.

GE/McKinsey 9 Box Matrix:

 This Classifies each SBU by the extent of its competitive advantage and the
attractiveness of its industry. The factors of extent of its competitive advantage and the
attractiveness of its industry is rated as High, Medium and Low.
Industry attractiveness is driven by –
 Long run growth rate of the industry,
 Size of the industry and
 Competitive structure present in the industry.
Competitive Strength of the SBU is driven by – the sustainability of the competitive
advantage, brand equity and the premium price that could be charged.

High Packaging systems Construction adhesive Other

K2-Tape Adhesives
GP-48, RD-72
essvenactiattrryustInd

Medium K2-Tape Consumer packaging,

HD-48, RDS-72 manufacturing & others
Low K2-Tape K2-Tape SD-72, HD-
LD-48, 72
High Medium Low
Competitive Strength of the SBU

Each SBU is classified based on the industry attractiveness and competitive strength of the
SBU
SD-72 and HD-72 seems to have shown low performance and low market attractiveness
hence it is better to stop investing on the same
Consumer packaging, manufacturing has a fair growth rate of 1.1% and hence can be
managed for earnings
Packaging systems, K2 tapes, GP-48, RD-72 have strong sales records which shows highly
competitive strength and industry attractiveness.