Growth offensive at ChemCorp

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Problem Definition

I am the business manager of the Performance Chemicals division ($500million) of a Speciality Chemicals Company ($14billion). Our CEO wants us to become the fastest growing (moving from 4-5% growth to 10-15% growth) speciality chemicals company and has therefore asked all the divisions to present growth strategies to him. I would like you to advice us as we do not believe that there is significant untapped potential in the markets served by our division.


The case is designed to be presented to the candidate by an interviewer, who plays the role of the business manager of the Performance Chemicals division of a Speciality Chemicals Company.

Short Solution (Expand)

Detailed Solution

Paragraphs highlighted in blue can be verbally communicated to the interviewee.

Paragraphs highlighted in orange indicate hints for you how to guide the interviewee through the case.

The interviewee should perform a back-of-envelope analysis which answers the key question - 'Whether or not the Performance Chemicals division can grow at a 10%+ per annum rate'; and recommend potential growth strategies for the business unit.

I. Background

Wait for the interviewee to ask questions regarding the background of the case. A few sample questions are shown below. You could use them to help the interviewee with information, if he's stuck.

1. Understanding the market: At what rate do we expect the business unit to grow?

Interviewer’s answer: We have been growing at 4-5% for the last 4 years. The average growth rate of the market served is also the same.

2. What kind of products are sold by the division?

Flourine compounds, sodium chemicals and conditioning solutions

3. Understanding the competition: How is the competitive environment?

All products are being threatened by competition as the intellectual property protection is limited. We will have to look for new product strategies as commoditization and pricing pressures are constraining our growth. Moreover we are exposed to trends such outsourcing, solutions vs products, product-service bundles, etc.

4. Understanding feasibility: Are there any cultural hindrances to growth?

We have always focused on selling products and never seeked for new growth ideas. The business thinking can be described from our quote, "We make it by the ton and sell it by the carload”.

II. Solution

Key question: What kind of growth strategies could help the division grow at a faster rate?

It is clear that the company has to look beyond traditional product strategy to generate the demanded growth.

The company should look at

  • Product enhancements or product-service bundling
  • Outsource services which are non-core to the firm
  • Look for new markets for the existing technological capabilities
  • New distribution channels

Alternatively, the following strategies could also be considered:

  • Sell a solution not a product (Example product-service bundling)
  • Become indispensable to strategic customers
  • Consider developing new products in order to become a one-stop shop for specialty chemicals
  • Provide extra services to the customers such as a vendor managed inventory system

III. Concluding Observations

The company should look at strategies such as product enhancements or product-service bundling, outsourcing non-core activities and new markets for the existing technological capabilities.

Difficult Questions

  • What could be a pragmatic roadmap to develop such a growth strategy?
  • How would you quantify each strategy measure?
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Someone gave the best answer on Jun 24, 2016 - 4 answers

Two frameworks here: 4 Ps (= price, place, product, promotion), or the Ansoff Matrix (grow with existing or new products in existing or new markets). Both are quite MECE. Word of caution however --... (more)

Vlad gave the best answer on Feb 16, 2018 - 4 answers
McKinsey / Accenture / Got all BIG3 offers / More than 300 real MBB cases / Harvard Business School

Hi! It depends very much on the industry. In some cases (Growth strategy) I will use a broad structure, in others (e.g. “how to increase the excessive luggage revenues for an Airline”) I will use P... (more)

Francesco updated the best answer on Mar 27, 2018 - 1 answer
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Hi Elisey, I would personally not recommend to use a single framework for all the so-called business situations (M&A, Entry, New product, Operations etc). Although this would help to more easil... (more)

Sidi gave the best answer on Jul 04, 2018 - 2 answers
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Hi Anonymous, let me illustrate how I would approach the low-profits scenario that you are describing. You should start to clarify the profit expectations and how much the company is actually underpe... (more)

updated the best answer on May 12, 2019 - 3 answers
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Hi, this is a very open-ended question. If you mean "profit growth", you could achieve "growth" by investigating both revenues and costs. If, however, you mean "revenue growth" then you would obvio... (more)

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