dupont strategic analysis
TRANSCRIPT
DuPont Strategic Analysis
E. I. DuPont de Nemours & CompanyHISTORY
Founded in 1802 by Eleuthere Irenee du Pont, E.I. du Pont de Nemours and Company (DuPont) is an explosives American-based company headquartered in Wilmington, Delaware. Throughout its history of development, growth, merger and acquisition, the company offers variegated products and services in chemicals, agricultural, nutrition, communications, electronics, safety and protection, home and construction, transportation and apparel. DuPont has expanded operations in approximately 90 countries with 60,000 employees worldwide. Total revenues reached $31.5 billion in 2010. The company is known for its strong research and development with more than 75 labs in 12 countries worldwide.
E. I. DuPont de Nemours & CompanyVISION
“Our vision is to be the world’s most dynamic science company, creating sustainable solutions essential to a better, safer and healthier life for people everywhere.”
MISSION, GOALS & OBJECTIVES
DuPont has a mission of sustainable growth, which we define as the creation of shareholder and societal value while we reduce our environmental footprint along the value chains in which we operate.
E. I. DuPont de Nemours & CompanyDIVERSITY
“In DuPont we will have an organization in which people of all backgrounds can contribute and achieve their full potential in pursuit of personal and organizational excellence.” As a global corporation, DuPont has promoted diversity and had racially and ethnically diverse body of employees across various functions and business units. Ellen J. Kullman has been the CEO of DuPont since January 1st, 2009 and the first woman to lead the company in DuPont’s 209 year history.
E. I. DuPont de Nemours & CompanySUSTAINABILITY
“The need for truly sustainable options for 21st century life remains one of the most critical challenges facing the global community. As a science company, DuPont has the experience and expertise to put our science to work in ways that can design in – at the early stages of product development – attributes that can deliver solutions that help protect or enhance human health, safety and the environment. We believe this is a direct route to a successful, profitable business that adds value to our customers, their customers, consumers, and the planet.” DuPont employees are asked to change printing practices, which will save the company $700,000 annually. DuPont also has improved logistics and distribution in a way that helps reduce NOx emissions by 4,000 kilogram and CO2 by 3,500 tons in 2007.
E. I. DuPont de Nemours & CompanyHeadquarters
E. I. DuPont de Nemours & Company’ headquarters is a fourteen-story high-rise building located in Wilmington, Delaware.
Pakistan Head Office
DuPont Pakistan Operations (Pvt) Ltd.2nd Floor, Bahria Complex 1, M.T. Khan Road, Karachi.
E. I. DuPont de Nemours & CompanyOperations & Marketing
DuPont has global operations in about 90 countries, more than 75 R&D labs in 12 countries, and a total of 60,000 employees worldwide. In the increasingly globalized age, DuPont focuses on a larger scale of global operations and markets. The company determines excellence in operations is not optional but crucial to success in the intensely competitive global marketplace. The DuPont Operational Excellence (OE) model has been implemented with the following aspects:
• Asset productivity• Capital effectiveness• Operational risk management
This model is designed to lower costs, to minimize potential incurring injuries and damages, to increase efficiency, to maximize sustainable returns on operating assets, and enhance competitive position in the market.
E. I. DuPont de Nemours & CompanyOperations & Marketing
The following chart illustrates the stages of the model.
E. I. DuPont de Nemours & CompanyOperations & Marketing
E. I. DuPont de Nemours & CompanyOperations & Marketing
E. I. DuPont de Nemours & CompanyOperations & Marketing
E. I. DuPont de Nemours & CompanySales by Markets
US35%
Europe, Middle East, Africa25%
Asia/Pacific22%
Latin America11%
Canada3%
Other4%
DuPont 2010 Sales by Markets - Total $32.7 billion
E. I. DuPont de Nemours & CompanySales by Segments
Agriculture & Nutritrion28%
Performance Chem-icals19%
Performance Materials19%
Performance Coatings12%
Safety & Protection10%
Electronics & Communica-tions9%
Other3%
DuPont 2010 Sales by Segments - Total $32.7 billion
E. I. DuPont de Nemours & CompanyINDUSTRY KEY SUCCESS FACTORS
Access to low-cost material will help DuPont improve operation margins since the company has low operation margins.Innovation Capability is DuPont strength in the industry. The company has thousands of patents and innovation s that have been applied in its plants and used for consulting services. Supply Chain Excellence is the key to the company success because supply chain management creates cost savings and time-to-market reduction. Ability to fund growth investments is very crucial since DuPont is a science-based technology. Available fund is very important to new R&D projects or new plants in new regions or countries.
E. I. DuPont de Nemours & CompanyVALUE CHAIN ANALYSIS
E. I. DuPont de Nemours & Company
Value chain analysis is the strategic model of a set of interrelated value-creating activities common to a wide range of firm. The diagram demonstrates support and primary activity that a firm operates. In addition to the value chain analysis, DuPont has a more complicated model that is discussed in Operations & Marketing part. The complexity is inevitable because the nature of DuPont company. It has operated more than 200 years and in seven industries offering a wide range of products and services. It is the Operating Excellence Model (OEM) that helps DuPont focuses on and manages efficiently the primary aspects of operations.
VALUE CHAIN ANALYSIS
E. I. DuPont de Nemours & CompanySW/OT Matrix Format
Opportunities Emerging market growth Strategic global M&A Growing demand for
environment-friendly products
Alternative energy market
Threats Global economic crisis International market risks Tightening environmental
regulations Volatile energy and raw
materials prices
E. I. DuPont de Nemours & CompanySW/OT Matrix Format
Strengths Strong R&D Diverse range of
products and services Leading position in the
market International operations Strong financial figures M&A
R&D for environmental-friendly products and alternative energy
M&A foreign firms Generate more
revenues from Include new products
and services
Diversify services and products portfolios
Diversify geographic operations
Purchase commodity options
Backward Integration
E. I. DuPont de Nemours & CompanySW/OT Matrix Format
Weaknesses Lawsuits Legal and
environmental charges Declining market share Low operation margin
and liquidity
Action Plan Settle lawsuits Reduce minimum
pollutant wastes M&A to increase
market share Offshore
manufacturing to reduce costs
Action Plan Pay attention to
environmental issues in global operations
Pay attention to legal issues both international and local
Improve operation margin and liquidity
E. I. DuPont de Nemours & CompanyStrategies
CURRENT STRATEGY RECOMMEND STRATEGY
BUSINESS STRATEGY
Differentiation
Focus
Differentiation
Differentiation in products, services, and
brand images
Develop new brand names and intangible
assets
Introduce improved products to extend
industry life cycle
Enhance pricing strategy
CORPORATE STRATEGY
GrowthDiversification
Vertical integration
Related diversification
Unrelated diversification
INTERNATIONAL
STRATEGY
Multi-domestic
Merger and acquisitions
Join ventures
Wholly-owned subsidiaries
Continue current strategies of M&A and joint
ventures
ENTREPRENEURIAL
STRATEGY
Differentiation
Competitive: Strategic
and Tactical
Logistics Innovative products, services, and logistics
Key External Factors Weight Rating Weighted Score
OPPORTUNITIES
1. Emerging market growth 0.15 3 0.45
2. Strategic global M&A 0.12 4 0.48
3. Growing demand for environment-friendly products 0.14 4 0.56
4. Alternative energy market 0.09 3 0.27
THREATS
5. Global economic crisis 0.18 3 0.54
6. International market risks 0.12 2 0.24
7. Tightening environmental regulations 0.15 1 0.15
8. Volatile energy and raw materials prices 0.15 2 0.30
TOTAL 1.00 2.99
Key Internal Factors Weight Rating Weighted Score
STRENGTHS
1.Strong Research & Development 0.15 3 0.45
2. Diverse range of products and services 0.12 4 0.48
3. Leading position in the market 0.09 4 0.36
4. International operations 0.09 3 0.27
5. Strong financial figures 0.10 3 0.30
6. M&A 0.07 3 0.21
7. R&D for environmental-friendly products and alternative energy 0.05 3 0.15
8. M&A foreign firms 0.05 3 0.15
WEAKNESSES
9. Lawsuits 0.08 3 0.24
10. Legal and environmental charges 0.09 2 0.18
11. Declining market share 0.05 3 0.15
12. Low operation margin and liquidity 0.06 1 0.06
TOTAL 1.00 3.00
E. I. DuPont de Nemours & Company
DuPont formulates different strategies for various business segments and units within the organization. The company uses contemporary approach together with its own models that suit the businesses. The above diagram the relationships of formulating, implementing, and controlling strategies. Behavioral control is interactive between strategic control and implementing strategies. Information control is between formulating strategies and strategic control.
IMPLEMENTATION
Formulate Strategies
Strategic Control
Implement strategies
Behavioralcontrol
InformationControl
CONTEMPORARY APPROACH TO STRATEGIC CONTROL
E. I. DuPont de Nemours & Company
DuPont formulates different strategies for various business segments and units within the organization. The company uses contemporary approach together with its own models that suit the businesses. The above diagram the relationships of formulating, implementing, and controlling strategies. Behavioral control is interactive between strategic control and implementing strategies. Information control is between formulating strategies and strategic control.
IMPLEMENTATION
Formulate Strategies
Strategic Control
Implement strategies
Behavioralcontrol
InformationControl
CONTEMPORARY APPROACH TO STRATEGIC CONTROL
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