Value Creation – Strategies for the Chemical Industry 2e

Name: Value Creation – Strategies for the Chemical Industry 2e
Author: F Budde

Strategies for the Chemical Industry

Gebonden Engels 2005 2e druk 9783527312665

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Samenvatting

Written by a global team of top managers and senior McKinsey experts, this expanded and completely revised second edition provides a wide–ranging manual on the subject of value creation in the chemical industry.

Drawing on extensive first–hand management experience, several hundred consulting engagements, and in–depth research projects, the authors outline the key ingredients for managing chemical companies successfully. The book addresses in detail key issues of strategy and industry structure, describes best practice in the core functions of the chemical business system, looks at the state of the art in organization and post–merger management, and covers a selection of the most important current topics such as industrial biotechnology, the role of private equity, and the chemical landscape in China.

Although mainly directed at executives and managers in the chemical industry, the knowledge contained in this comprehensive overview will also benefit scientists, engineers, investors, students, and anyone else dealing with management issues in this sector.

Specificaties

ISBN13:9783527312665

Taal:Engels

Bindwijze:gebonden

Aantal pagina's:501

Uitgever:John Wiley & Sons

Druk:2

Hoofdrubriek:Leiderschap, Algemeen management

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Inhoudsopgave

Preface XVII
Acknowledgements XIX
List of Contributors XXI
1 Today s Chemical Industry: Which Way Is Up? 1 Karsten Hofmann and Florian Budde
1.1 The Chemical Industry Today A Snapshot 1
1.2 Eras of the Chemical Industry 7
1.3 Summary 10
2 Shareholder Value Orientation: Not a Question of Whether, but How 11 Bernd Heinemann and Thomas Augat
2.1 Capital Market Deviations as the Key Challenge for Shareholder Value Orientation 11
2.2 How Capital Markets Reflect Fundamental Value Creation 13
2.2.1 Capital Markets and Effects of Earnings Announcements 13
2.2.2 Capital Markets and Expectations on Fundamental Value Creation 15
2.3 New Tools for an Advanced Shareholder Value Orientation 19
2.3.1 Capital Market Diagnostic: Gain an In–depth Understanding of Capital Market Signals 19
2.3.2 Financing Policy: Harmonizing Financing with Strategy 22
2.3.3 Investor Relations: from a PR Approach to Targeted Marketing 24
2.4 Summary 26
3 Structural Drivers of Value Creation in the Chemical Industry 27 Eric Bartels, Thomas Augat, and Florian Budde
3.1 Introduction to the Study 27
3.2 Mobility in a Mature Industry 28
3.3 What Drives Performance? 30
3.4 A Closer Look at Value Creation in the Segments 33
3.4.1 Commodity Companies 33
3.4.2 Specialty Companies 35
3.4.3 Diversified Companies 36
3.5 Summary 38
4 Chemicals Driving Innovation in Other Industries 41 Thomas Schreckenbach and Werner Becker
4.1 Liquid Crystals: Superlative, Not Superfluous 42
4.1.1 Staying Power 44
4.1.2 Managing an Active Patent Strategy 45
4.1.3 A Customer–focused Approach Built on Expertise in Production and Application Technology 46
4.1.4 Timing is Everything: Internationalization and Diversification 50
4.1.5 The Best Intellects 50
4.2 Outlook 51
4.3 Summary 52
5 Today s Challenges and Strategic Choices 53 Florian Budde, Utz–Hellmuth Felcht, and Heiner Frankem lle
5.1 Overall Outlook Stable 54
5.2 The Value Kaleidoscope 55
5.2.1 East, West, Is Home Best? 56
5.2.2 The Feedstock Rollercoaster 57
5.2.3 Biotechnology Looking into the Seeds of Time 58
5.2.4 Mergers and Acquisitions 59
5.3 What Happens Next? 59
5.4 Summary 61
6 An Approach to Determining the Long–term Attractiveness of Commodity Chemical Businesses 63 Scott Andre, Sunil Sanghvi, and Thomas R thel
6.1 Looking beyond Cyclicality 64
6.1.1 Two Types of Costs Needed to Anticipate the Future 65
6.1.2 The Role of Reinvestment Economics 66
6.1.3 Learning to Love Fly–ups 69
6.2 Putting the Model to Work 71
6.3 The Example of Ethylene 73
6.3.1 The Rise of the Middle East 73
6.3.2 Awash with Stranded Gas? 74
6.4 Tailoring the Model 75
6.5 Conclusion 76
6.6 Summary 76
7 Middle East: Opportunities and Challenges from the Rapid Emergence of a Global Petrochemical Hub 79 Christophe de Mahieu, Christian G′nther, and Jens Riese
7.1 Turning to the East 79
7.1.1 Booming Demand in Asia–Pacific 80
7.1.2 High Input Costs Render Western Companies Uncompetitive 81
7.2 Pathways to Growth for the Middle East 85
7.2.1 Local Capacity Expansion 85
7.2.2 Portfolio Expansion and Forward Integration 86
7.2.3 Geographic Expansion 87
7.2.4 Hurdles to Overcome 88
7.3 Way Forward for the West 89
7.4 Capturing the Value 90
7.4.1 Business Intelligence 90
7.4.2 Microeconomic Rigor 90
7.4.3 Managing Risks and Uncertainties 91
7.4.4 Organizational Excellence 91
7.4.5 Execution 92
7.5 Conclusion 92
7.6 Summary 93
8 Survival when It s Hard to be Special: A Perspective on Specialty Chemicals 95 Eric Bartels, Jo)l Claret, Sabine Deppe, and Ralph Marquardt
8.1 Performance Has Been Disappointing 95
8.2 The Market Is Not Getting Any Easier 99
8.2.1 The Price–cost Squeeze Is Getting Tighter and Demand Is Maturing 99
8.2.2 Customer Industries Are Migrating 100
8.2.3 The Competitive Landscape Continues to Change 101
8.3 Meeting the Challenge Five Key Levers to Pull 102
8.3.1 Revisit Strategies 102
8.3.2 Find a Winning Answer to Emerging and Developing Markets 103
8.3.3 Strive for Top–class Operational Performance 105
8.3.4 Rediscover Innovation 106
8.3.5 Upgrade Performance Management 107
8.4 Summary 108
9 Creating the World s Leading Specialty Chemicals Company 109 Utz–Hellmuth Felcht
9.1 The Portfolio: Creating the World s Leading Specialty Chemicals Company 109
9.1.1 Focus on Specialty Chemicals through Divestments 109
9.1.2 Development of the Core Portfolio through Organic Growth and Acquisitions 111
9.2 Organization: as Decentralized as Possible, as Centralized as Necessary 113
9.2.1 Market Oriented Business Units: Business First 113
9.2.2 Small Corporate Center, Independent Shared Services 116
9.2.3 Site Services 116
9.3 A United Corporate Culture: Blue Spirit 117
9.3.1 A New Brand for the Company with a New Name, Vision, Mission, Guidelines 118
9.3.2 Umbrella Brand Degussa: Creating Essentials 119
9.4 New Challenges and the Next Transformation Goals 120
9.4.1 Solutions to Customers 121
9.4.2 Emerging Markets 123
9.4.3 Site Excellence 124
9.4.4 Human and Corporate Excellence 124
9.5 Conclusion 124
9.6 Summary 125
10 Prospects for Agribusiness: an Essential Contribution to Global Food Demand 127 Michael Pragnell and Robert Berendes
10.1 The Rationale of Agribusiness 128
10.2 Three Eras of Agribusiness 130
10.3 Driving Plant Yield 132
10.4 Opportunities beyond Yield 134
10.5 Summary 134
11 Industrial Gases Growth by Continued Self–Renewal 137 Aldo Belloni and Lennart Selander
11.1 HThe Invisible Industry : Stability and Profitability 137
11.1.1 Industry Characteristics 138
11.1.2 Key Players 138
11.1.3 Financial Performance 140
11.2 One Hundred Years of Success: the Winning Ingredients 141
11.3 Fit for the Future: Ready to Meet the Challenges 143
11.3.1 Continued Operational Efficiency Improvements 143
11.3.2 Managing Capital Investments 144
11.3.3 Maintaining Growth 145
11.4 Summary 148
12 Perspectives of Chemical Distributors as Partners of Industry 149 Klaus Engel and Gabriele Roolfs–Broihan
12.1 From Wholesaling to Supply Chain Management: the Evolution of Chemical Distribution 150
12.2 An Industry on the Move the Major Trends 152
12.3 Perspectives Within Changing Environments 153
12.3.1 Partners on a Global Scale 154
12.3.2 Partners Ensuring Compliance with Rising QSHE Standards 155
12.3.3 Partners along the Value Chain 156
12.4 The Future Outlook 157
12.5 Summary 158
13 Systematically Revitalizing Innovation in the Chemical Industry 159 Birgit K nig, Gary Farha, and Thomas Weskamp
13.1 Drivers of Innovation 160
13.1.1 Knowledge 161
13.1.2 Creativity 165
13.1.3 Perseverance 168
13.2 How to Organize for Innovation 170
13.3 Summary 172
14 Innovation for Growth 173 Thomas M. Connelly
14.1 The Ever–Present Challenges for the Innovation Process 173
14.2 Three Lessons Guide Us 177
14.2.1 Lesson 1 Collaborate with both External and Internal Partners 177
14.2.2 Lesson 2 Draw upon Many Sciences 181
14.2.3 Lesson 3 Technologies Can Find Applications in Many Other Markets 183
14.3 What Will the Future Bring? 183
14.4 Summary 184
15 The Four Pillars of Sustainable Purchasing Transformations 185 Helge Jordan, Nicolas Reinecke, and Khosro Ezaz–Nikpay
15.1 Designing a Performance Transformation Program 186
15.2 Initiate and Anchor Behavioral Change in the Organization 188
15.3 Generate Impact through a Proven Value Creation Process 191
15.4 Create a Tailor–made Performance Measurement and Management System 196
15.5 Summary 199
16 Feedstock Price Volatility and How to Deal with It 201 Scott Andre and Sunil Sanghvi
16.1 What is Driving Feedstock Price Increases and Volatility? 201
16.1.1 Crude Oil Surprises 202
16.1.2 Natural Gas Price Contrasts 203
16.1.3 Petrochemicals Layers of Volatility 205
16.2 A Brave New World of Feedstock 206
16.2.1 Step on the Gas 207
16.2.2 Coal Gets a New Look 208
16.2.3 Bio–based Feedstock 208
16.3 Meeting the Challenge of Feedstock Volatility 209
16.3.1 Optimizing Contracts 210
16.3.2 Hedging Financial and Physical 210
16.3.3 Fleximizing 211
16.3.4 Looking for Advantage 212
16.3.5 Restructuring Assets and Taking the Offensive 212
16.4 Conclusion 213
16.5 Summary 213
17 Taking a Leap in Purchasing 215 Gregory Nelson
17.1 Maximizing Value Creation 215
17.1.1 Using Purchasing Power 216
17.1.2 Making Aggressive Input Changes 217
17.1.3 Scrutinizing Processes to Cut out Costs 218
17.1.4 Getting the Most out of Negotiations 218
17.2 Creating Sustainable Value for the Business 219
17.2.1 Carrying Out an Improvement Program 220
17.2.2 Building Capabilities 221
17.2.3 Tracking Performance 222
17.2.4 Putting a New Organization in Place 222
17.3 The Next Horizon 224
17.4 Summary 225
18 Excellence in Operations the Never–ending Journey Continues 227 Leonhard Birnbaum
18.1 Operational Improvement the Bar Is Rising 227
18.2 Making Lean Operations Happen in Chemicals 230
18.2.1 Defining Relevant Aspects of Successful and Sustainable Operational Transformations 231
18.2.2 Making Transformation Happen Front–end Loading with Content 233
18.2.3 Making Transformation Happen the Soft Side of Change 235
18.3 Summary 239
19 State–of–the–art Production Concepts in the Chemical Industry 241 Uwe Nickel
19.1 Operating in a Transformed Environment 242
19.1.1 Decelerating Innovation 242
19.1.2 Chemicals Have Become More Global than Ever 244
19.1.3 Competition from Low–cost Labor Countries Is Changing the Industry Landscape 244
19.2 Challenges and Responses 246
19.2.1 Structural Cost Optimization 247
19.2.2 Operational Cost Optimization 249
19.2.3 Managing Complexity 253
19.3 Outlook 256
19.4 Summary 256
20 The Role of Site Services and Infrastructure for Productivity Management 257 Alejandro Alcalde Rasch
20.1 Site Services and Infrastructure: an Important Driver of Manufacturing Productivity 257
20.2 Transition: Site Services and Infrastructure s Coming of Age 258
20.3 Going Forward: Increasing Site Services and Infrastructure s Competitiveness 262
20.3.1 To Divest or Not to Divest Site Services and Infrastructure? 262
20.3.2 Improving Performance and Growing Selectively 264
20.4 Summary 267
21 Creating a Revenue Advantage through Sales and Marketing Excellence 269 John Warner, Jo)l Claret, Ralph Marquardt, and Eric Roegner
21.1 Defining World Class 270
21.1.1 Developing a Winning Go–to–market Strategy 270
21.1.2 Value Chain Insights/Customer Segmentation 271
21.1.3 Target Customer Identification and Value Proposition Design 272
21.1.4 Defining the Customer Interface Model 273
21.1.5 Pricing Excellence 274
21.1.6 Performance Management 275
21.2 Building World Class Revenue Capability 275
21.2.1 Performance Expectations 277
21.2.2 Program Design 277
21.2.3 Commercial Toolkit 277
21.2.4 Capability Building Agenda 278
21.2.5 Mindsets and Behaviors 278
21.3 Summary 279
22 Achieving Top Performance in Supply Chain Management 281 Andrea Cappello, Martin L sch, and Christoph Schmitz
22.1 Supply Chain Management as a Strategic Lever for the Chemical Industry 281
22.2 Key Supply Chain Management Elements and Opportunities for the Chemical Industry 283
22.2.1 Service Level Management 284
22.2.2 Order and Demand Management 286
22.2.3 Production Management 287
22.2.4 Supply Management 288
22.2.5 Distribution Management 288
22.2.6 Integrated SCM Planning and Execution 289
22.3 Delivering on the Opportunities the Key Success Factors for Achieving Top Performance 290
22.3.1 Designing Top–performing SCM 290
22.3.2 Managing an Improvement Program 294
22.4 Conclusion 295
22.5 Summary 295
23 Right Second Time Unlocking Value with IT 297 Peter Peters and Detlev Ruland
23.1 Breaking the Barrier 297
23.2 World Class IT Infrastructure Management 299
23.3 ERP Harmonization as the Basis for Global Process Architectures 302
23.4 Making CRM Work to Create Profitable Growth 305
23.5 Key Success Factors for the Journey 308
23.6 Summary 309
24 Managing Organizational Performance 311 Karsten Hofmann and Heiner Frankem lle
24.1 Supporting Strategy by Structure 312
24.2 Understanding the Performance Challenge 315
24.3 Making Organizational Change Happen 318
24.3.1 Diagnosing the Status Quo 319
24.3.2 Designing the Program Architecture 321
24.3.3 Ensuring Effective Implementation 324
24.4 Summary 325
25 Post–Merger Management: it s All in the Design 327 Eric Bartels, Tomas Koch, and Philip Eykerman
25.1 Phases of an Integration 328
25.2 Defining and Communicating the Aspirations 330
25.3 Fully Identifying Value Creation Potential 330
25.3.1 Determining the Synergy Potentials that are Directly Business–related 332
25.3.2 Securing the Business and Uncovering Additional Potential 334
25.3.3 Determining the Potential from New Strategic Opportunities 334
25.4 Determining the Cornerstones of an Effective Organization 335
25.4.1 Aligning Management Behind a Common Goal 336
25.4.2 Rapidly Determining New Organizational Structures 336
25.4.3 Building a Shared Performance Culture 337
25.4.4 Managing Top Talent 338
25.5 Tailoring the Integration Approach 338
25.5.1 Setting up a Powerful Project Organization 338
25.5.2 Selecting Project Management Tools 340
25.5.3 Communicating Permanently 340
25.6 Summary 341
26 M&A the UCB Case 343 Georges Jacobs
26.1 A Brief History of UCB Eight Decades of Mergers, Acquisitions, and Divestments 344
26.2 The Formation of Surface Specialties A Three–way Integration 346
26.2.1 Phase 1: Plan and Get Going (Dec. 2002 Jan. 2003) 347
26.2.2 Phase 2: Design and Implement the Organization (February May 2003) 349
26.2.3 Phase 3: Define Improvement Initiatives (May September 2003) 351
26.2.4 Phase 4: Implement and Follow Up on Results (October 2003 December 2004) 352
26.3 The Integration of UCB Pharma and Celltech 353
26.4 Key Learnings 356
26.5 Summary 357
27 The Chemical Industry and Public Perception 359 Wilfried Sahm
27.1 Public Perception of the Chemical Industry its Structure and Significance 359
27.1.1 What Does the Public Associate with the Chemical Industry ? 360
27.1.2 What Is the Value of a Good Image for the Chemical Industry? 361
27.1.3 How is the Image of the Chemical Industry Formed? 361
27.2 Image and Acceptance in Germany 362
27.2.1 Credibility in Public Debate 363
27.2.2 The Chemical Industry Viewed as an Economic Factor 364
27.2.3 Value and Responsibility Criteria 365
27.2.4 Acceptance: Yes But With Strict Controls 366
27.2.5 Insights from the Long–term Trend 367
27.3 Creating Awareness and Acceptance through Communication 369
27.3.1 Joint Advertising and Political Campaigns 369
27.3.2 Dialog Programs and Events 371
27.4 Current Challenges 371
27.4.1 The Industry s Image in an International Comparison 372
27.4.2 Shaping the Future with New Technologies 373
27.5 Summary 373
28 Industrial Biotech: From Promise to Profit 375 Rolf Bachmann and Jens Riese
28.1 Time to Exploit the Potential 375
28.1.1 Better Technology, Faster Results 377
28.1.2 Environmentally and Balance–sheet Friendly 377
28.1.3 Rekindling Innovation 377
28.1.4 Increasing Corporate Action in all Segments 378
28.2 Waste Biomass a Feedstock with Mass Appeal 379
28.2.1 How Waste Biomass Works 379
28.2.2 Economic Benefits and Regulation 379
28.2.3 Further Management Action Needed 380
28.3 Turning the Promise into Profit 381
28.3.1 Ascending the Staircase inside the Company 382
28.3.2 Handling External Pressures 382
28.4 Capturing the Value How it is Done in Practice 383
28.5 Finding the Right Answer 387
28.6 Summary 388
29 Industrial Biotech at DSM: From Concept to Customer 389 Colja Laane and Feike Sijbesma
29.1 From Petro to Bio 389
29.2 From Principle to Product 390
29.2.1 Food, Feed, and Nutritional Ingredients 392
29.2.2 Pharmaceuticals and Fine Chemicals 395
29.3 From Specialties to Commodities 398
29.4 From Innovation to Impact 399
29.5 Summary 401
30 Leveraged Buyout Transactions Challenges and Learnings 403 Achim Berg, Florian Budde, and Bernd Heinemann
30.1 Chemical Sector LBOs Show No Sign of Abating 403
30.2 Understanding Value Generation in Chemical Buyouts 407
30.2.1 Timing: Three Phases of a Buyout 408
30.2.2 Value Generation Mechanisms 409
30.2.3 Sources of Value Generation 409
30.3 Learnings for the Chemical Industry 410
30.4 Learnings for Buyout Firms 411
30.4.1 Good Deals Are Getting Harder to Find 411
30.4.2 Exiting Through the Right Door 412
30.4.3 Time to Stand Out From the Crowd 414
30.5 Summary 415
31 What Attracts Private Equity Firms to the Chemical Industry? 417 Thomas Jetter
31.1 Chemical Industry Restructuring 418
31.2 Private Equity Transactions in Chemicals Success Stories, Mostly 419
31.3 The Value Drivers of Private Equity Investments 420
31.3.1 Business Strategy and Operations 420
31.3.2 Financial Market Conditions 423
31.3.3 Aligned Interest of Management Teams and Financial Sponsors 424
31.4 Summary 425
32 Facing China 427 Sönke Bästlein, Ralf Dingeldein, Tomas Koch, and Karsten Neuffer
32.1 China Is No Longer HOptional 428
32.2 Most Chemical Companies Are Not up to Speed 430
32.3 The Lessons of Confucius 433
32.3.1 A Good Strategy at Home Wins the Battle a Thousand Miles Away 433
32.3.2 He Who is Close to Water is First to See Reflections 435
32.3.3 When Away from Home, Seek Help from Friends 436
32.3.4 The Sharper Saw Does the Better Job 437
32.4 Summary 440
33 China Key for Success in Asia 441 Jürgen Hambrecht
33.1 Why China? 441
33.2 BASF and its Long Relationship with China 442
33.2.1 BASF s First Steps in China 442
33.2.2 The Post–Second World War Era 442
33.2.3 Toward the Future 444
33.3 Sustainable Development in China 447
33.4 Outlook 448
33.5 Summary 449
Index 451