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CLARIANT CORPORATION CASE

SUBMITTED BY: HUNNY GOYAL

PARTH SHAH
NILAY THAKKAR

5 billion.1 billion.Introduction      Clariant international limited was formed in 1995. NAFTA region accounts for 1. .5 billion. Hoechst-Celanese added to mix in 1997 with sales of 5. It formed with the spun off of three acquisitions. These divisions are Sandoz with sales of approximately 1.

leather.Clariant 6 Global Divisions     TLP( textile. paper) chemicals for process P&A( Pigments and Additives) makes colorants and functional additives FUN( functional chemicals) produces a plethora and magic molecules LSE ( life sciences and electronics) its serves the need of electronics and pharmaceuticals industries MB ( master batches) custom blends pigments and other additives for color plastics CEP( cellulose ethers and polymeriser) provides special feed-stock chemicals plastics processing   .

   . service. Specialty chemical are often willing in invest in research and development of performance and cost to meet the immediate need. company relationship. technical support. Mature Commodity market are primarily driven by price.Chemical Industry Background  Two type of chemicals are available1.Specialty chemical Commodity chemical stand as a daily utilized kind of product including chemical which holds for 83% of total market share.Commodity chemical 2.

.Pigments in paint 2.1.Specialty Chemicals   This is the field in which the Clariant corporation are doing business Specialty chemicals are used in many products we encounter every day.Plastic 3.Leather in cars and in Cosmetics 4.Photo-resists in video Displays 5. like.Agro Chemicals for food etc.

   . Financial incentives which Vincent is going to consider. Vincent Thompson wanted to redefine the Marketing & Sales to tackle such issue by Redesigning their sales force into cross-divisional account teams that could be assigned to company’s most profitable customers which going to cost their time & money heavily. He ended his review with the question of how Clariant could fully develop their potential in meeting their goals of Sales & Contribution margin. Their employees also suggested him other alternatives like Training. when VP Vincent Thompson of Clariant Corporation gone through the Sales growth & Contribution growth margin of the NAFTA arm of Clariant he was frowned by seeing the continued volatility in their most promising business area.Problem Finding  In Sep 2000.

Sales growth through strategic acquisitions to achieve targeted growth in high.margin segments B.. high-potential customers C. Sales growth generated by cross-divisional sales of multiple Clariant lines to key.  Beside this President of Clariant Corporation.Cont. David Lawrence outlined three pronged strategies to achieve both Sales & Profit performances: A. Improving margins by emphasizing sales of higher-margin specialty products over the more established "semi-specialty" products (those nearing commodity status).    .

• Annual Sales between 1-2 billions. • They are having narrower range of products offerings than Tier 2. • Annual Sales between 3-5 billions.Structure of Specialty Chemical Industry Tier 1 Tier 2 Tier 3 • Annual Sales between more than 10 billions. . • Focusing on Particular portfolio of specialty chemicals. • Specializing in Specific Segments or User segments.

One of our managers characterized our position as being caught "between a herd of elephants and a pool of sharks. They are in the Precarious situation because they compete fiercely on price when a major account is up for grabs.."  .Cont.   Clariant Corporation fall under Tier 2 Class of industries.

a fledgling national accounts system was under development and had resulted in several promising contacts with high-potential customers. especially the cross-divisional sales strategy. . which often arose from a customer's pressing needs for new approaches to product development. Technologies were being implemented. including central databases of product information.tact information. Clariant had invested significant time.in the various sales forces. and money into the creation of cross. and "center of excellence teams.Strategies Implementation  In implementing these strategies. product con. energy."  To capture these potential cross-divisional opportunities. Significant training investments were already being made .divisional product understanding among the various business units.

each of that separated with product line. user line .Marketing & Sales  Sales department is provided as a annual sales objectives that make sense to the production department to be manufacturing of the products. All unit are divided as further geographically. each one having own sales force.  . industry line etc.   And also it make increase the profitability. GlobalizationThey having global business unit.

. .  Salesman incentives.Twenty-five percent of our bonuses relate to the same performance metrics for global division . Salesman of Clariant spent less time to Identifying prospects for new business for Clariant beyond product line. return on sales' and net working capital performance.     They having national accounts of the major customer They don’t take the customer like they own customer as a local business unit because there is many competitor with various kind of product available. earnings. And they spent most time in Generating new business for product line.Seventy-five percent of our upper-management bonuses are tied to North American divisional sales.Cont.

.   They having national accounts of the major customer They don’t take the customer like they own customer as a local business unit.Cont.  Because there is many competitor with various kind of product available .

 . Survey of 26 Clariant Customers are revealed the following things: 22 of 26 described closer relationships with the chemical suppliers. Half replied that they would purchase commodity chemicals from e-commerce market and they also told that technology should facilitate the relationship not to replace it.Customers Expectation    In 2000. Most of them laid importance on Quality and then on Service and last on Pricing.   24 of 26 want new & additional product opportunities to come from the supplier representatives. Most of also said they are willing to pay more price for the quality & service. 20 of 26 are prefer to work with the current chemical suppliers. On the view of technology advancement.

. .Cont.  Large Clients also want to integrate the supplier into the productdevelopment process to shorten timetables and to streamline problem solving.

Thank You… .