Internal Entrepreneurship at the Dow Chemical

The Dow Chemical Company was a leader company in science and technology, offering plastic and agriculture products in 2002. However, from 1995, Dow Chemical Company had ever lost its profit for several years especially in 1998. Dow Chemical Company tried to stop the decreasing so that it launched an initiative ‘E-epoxy. com venture’ in 2000. The purpose of this project was earning more small customers and spot market customers to increase the market shares. STRENGTH 1. Epoxy was a specialty, high margin business. The top 20% of its global customers have generated 80% of its revenue.
Dow Chemical Company can take this advantage to expand the business oversea. 2. Epoxy was a creative online channel in the market. It was very convince for not only local customers but also global customers to purchase products online without calling or faxing. 3. Dow Chemical Company would be the first mover using online system to process the orders. Moreover, the cost of launching this online system was not expensive. Using this system could lead Dow Chemical Company to the head position in electronic marketplace and ahead of other traditional competitors. . It was more flexible for managers to use online system to attract more customers. For example, Telford can provide promotion code to some particular customers via E-mail. Some customers might feel interesting and order products on E-epoxy. com because of special price. 5. Telford is an experienced employee who has worked in Dow Chemical Company for many years. He has exceptional ability to understand stakeholders’ thought and was aggressive to operate Epoxy project. WEAKNESS 1.
Although customers can order products online, Dow Chemical Company still needed to contact with customers to clarify and confirm the order sometimes. It would increase the labor cost and decrease the order process efficiency. 2. Capacity utilization was a problem as well. The capacities of epoxy were in the range of 30 ktpa to over 100 ktpa. Dow Chemical Company has not enough capacities to fit the needs of new customers in the future. 3. The product price should be clear on the website. However, it might be inappropriate because Dow Chemical Company always changes the price according to different customers.

Price transparency would potentially limit sales’ negotiating ability. 4. Telford wanted to charge distributors higher price because of other service such as a wide product palette and technical assistance. It might make Dow Chemical Company lose some distributor customers. 5. The E-epoxy. com was available everywhere. However, the language problem and currency problems were still need to be solved. For instance, Brazil didn’t allow Dow Chemical Company using US dollars as currency on the website. OPPORTUNITY 1. With new sales tool–E-epoxy. om, Dow Chemical Company has opportunity to expand its business globally. Dow Chemical Company could earn more market shares by this low-cost and efficiency online tool. 2. In order to fit increasing demand in the future, Dow Chemical Company needs to build its capacity utilization. It might be a chance for Dow Chemical Company to be the top huge company because of abundant production ability. 3. Smaller customers had less ability to negotiate the price with distributor. Distributors might charge them much price than ordering products from Dow Chemical Company directly.
Smaller customers might love to order products online due to cost down. THREAT 1. The regulations of foreign government might change in the future. As the problems Dow Chemical Company faced in Brazil, Brazil didn’t allow Dow Chemical Company to use US dollars on the website. Other countries’ government might also change the policy like tax increasing or currency change and it might threaten Dow Chemical Company a lot. 2. In order to do something dramatic to push home the importance of his venture, Telford started a rumor via E-mail in the market.
Although no one really condemned this event, that didn’t mean nobody would argue on day. Telford created a potential bomb for company. 3. Dow Chemical Company has less experience to manage website. Dow Chemical Company might waste money in a wrong way to operate E-epoxy. com. However, other competitors can learn Dow Chemical Company’s experience and avoid failure in the market. RECOMMEDATION 1. Dow Chemical Company needs to improve its website day by day to fit customers’ new needs. Moreover, Dow Chemical Company can build up other service at the same time.
For example, Dow Chemical Company can mimic what it did on EpiCenter. Dow Chemical Company can create a specific contact phone number for customers to contact with sales immediately. Customers can get information from website or phone service. 2. Dow Chemical Company could offer more discounts on the website to inspire the sales. If Dow Chemical Company want to higher the price for distributors, Dow Chemical Company should offer something new and only available for distributors to attract them make orders. .
Dow Chemical Company needs a well-organized strategy group for incoming international business. Because of the cultural difference, local currency, different language, and different consumer behavior, Dow Chemical Company should have a professional team to deal with country differences. For instance, the team members should have rich foreign working experience and ability to speak in foreign language. It would be helpful for Dow Chemical Company to enter global market.