Chemical companies face a choice: grow aggressively or wither away.
The trend is clear. The chemicals market has been underperforming for some time. Shareholders and analysts are growing weary of the lack of results from the sector. The dilemma facing chemical companies is: How do I achieve strong top-line growth at good margins during some of the most grueling economic conditions ever?
In response, Accenture developed the CEO Growth Agenda. It provides insights and actions that can help enable chemical companies to become marketplace leaders once again.
Our exclusive, in-depth study, “Successful Growth Models for the Chemical Industry,” cites three distinct business models among chemical companies that have succeeded in growing shareholder value:
* Operators—distinguished by being physical asset-intensive companies with significant scale and number one or two market share positions;
* Solution Providers—maintaining greater focus and reliance on intangible assets such as brand, knowledge and intellectual property; and
* Hybrid—distinguished by tending to be very large and displaying excellence in corporate governance and portfolio management. Examples of leading Hybrids are scarce.
Researchers concluded that, while growth is critical, successful growth depends on choosing a strategy and supporting tactics that are appropriate for the chosen business model. There is no one-size-fits-all solution. To succeed in promoting growth, individual companies must decide which type of model they are pursuing and whether or not to continue pursuing that model. Execution is key, but companies must align all actions with a corporate growth strategy resulting from a focus on a carefully chosen business model.
