DuPont's Titatium Dioxide Business - Should DuPont increase capacity

DuPont faced two distinct strategic options in TiO2 labor movement business - whether to adopt a ?growth? schema spillway forward and committing itself to higher(prenominal) investments or to embrace a ? indorse? system which required lesser investments and would still lead to an diverseness magnitude mart share. The task force set up by the Pigments Department at DuPont made certain assumptions art object conducting exact economic analyses of its competitors, which included the possibility of competing sulfate producers ask out NL, exiting the market due(p) to an already marginal economics and large reinvestment, ingeniousness environmental shocks. Although reinvestment for enforcing environmental standards would besides be required to be made by the chloride producers, it is assume that there would be no reduction in rutile chloride capacity. The assumptions related to the response of DuPont?s competitors to its expansion strategy, external shocks on supply and d emand, and sustainability of its competitive advantages are in addition implicit in the market forecasts. DuPont?s pigment divider appears to assume that its competitors would non respond aggressively to any of the strategy choices it makes. It is risky to assume that competitors like Cabot, American Cyanamid and Kerr-McGee, which decide 29%, 55% and 26% of their sales (Exhibit 4) from their respective chemicals divisions, would not respond aggressively to DuPont?s growth strategy.

Exhibit 7 indicates that the demand (size of market) would continue to expand at 3% every(prenominal) year and the customers give not be price sensitive. Forecasted prices were mistaken to be lower inf ra growth strategy until 1979 and higher the! reafter. These assumptions would aim to be discussed in a meeting with pigments department. chthonic a ?maintain? strategy choice by DuPont, it is assumed that prices will increase in a greater quantity than under ?growth? strategy in the initial years. It could be due to a relatively lower investment in newer... If you insufficiency to get a full essay, order it on our website: OrderEssay.net

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