Gasmet business exam case UMB School Of Business and Economics 2013

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Exam Case - Gasmet - mini scope: …

Exam Case - Gasmet - mini scope:
The top management of Gasmet is performing a process with both Risk Management and review of existing corporate strategy on quarterly basis. To assist the management in reviewing existing strategy we will answer the following corporate strategic questions from the CEO of Gasmet:

1. decide whether he can still argue that
Gasmet has a sustainable competitive advantage, (1.2) and that Gasmet can mitigate (Reduce) the possible risks related to its core business, and

2. answer the Big Question: Should Gasmet maintain its current strategy or should it diversify?

A mashup of business analysis tools are used within the case:

PESTEL
Porters Five Forces
Value Chain
VRIN
TOWS/SWOT

More in: Business , Technology
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  • 1. Case exam BUS305 30.8.2013 We, members of this group, hereby declare that this assignment is written by us and - is a result of our own work - has not been used for another exam at another department/ university/ university college in Norway or another country. - does not refer to/quote works of others without stating it both in the text and in the reference list - does not refer to/quote previous writings of our own without stating it both in the text and in the reference list - mentions explicitly all sources of information in the reference list. We are aware of the fact that violation of these clauses is regarded as cheating and can result in annulment of the examination or paper. Cheating or attempted cheating can result in the expulsion of the examinee, in accordance with the University and College Act Chapter 14-1. We have read and understand UMB’s guidelines as to plagiarism and other dishonest behavior in exams: http://www.umb.no/statisk/sit/forskrifter/norske/forskrifter_internerutiner_regelverk_fusk.pdf Insert here candidate number of the group numbers for the exam (can be found from the Studentweb) 69 80 21 64 Insert here student number of the group members 980722 981963 980725 980724
  • 2. Exam  Candidates:  21,  64,  69  &  80     1   Candidate Number Student Number 69 980722 80 981963 21 980725 64 980724 S c h o o l   o f   B u s i n e s s ,   N o r w e g i a n   U n i v e r s i t y   o f   L i f e   S c i e n c e s   GASMET  EXAM  CASE  –  BUS305   August  30,  2013                         August  Block   13  
  • 3. Exam  Candidates:  21,  64,  69  &  80     2   Table of Contents 1.0 Methodology 3 External Analyzes – Key findings 2.0 PESTEL Analysis - Key findings 3 3.0 The Methanol Industry: Competitive Environment 4 Internal Analyzes – Key findings 4.0 Value Chain Analysis – Key findings 4 5.0 VRIN Analysis – Key findings 5 Analyze Sum-Up 6.0 TOWS Analysis 6 7.0 Conclusion 6 8.0 References 8 Appendix 1: PESTEL Analysis (Full version) 9 Appendix 2: Five Forces of Competition in The Methanol Industry (Full Version) 11 Appendix 3: Gasmet Value Chain Analysis (Full Version) 13 Appendix 4: VRIN Analysis (Full Version) 16
  • 4. Exam  Candidates:  21,  64,  69  &  80     3   1.0 Methodology The top management of Gasmet is performing a process with both risk management and review of existing corporate strategy on quarterly basis. To assist the management in reviewing existing strategy, we´ve chosen the following methodology: In order to analyze the business strategy, we´ve chosen to start analyzing the company and its surroundings broadly, and narrow our perspective as the strategy analysis proceed. Initially, we perform a PESTEL analysis, to get a broad overview of the company´s surroundings. Then we proceed with an analysis of the Five Forces of Competition (Porter, 1980) in order to create a picture of the competitive environment within the methanol industry. After analyzing external factors, we focus on the internal factors, and how Gasmet currently adapts to its environments. We analyze the internal factors through a value chain analysis and a VRIN- analysis. Finally we sum up all the previous mentioned analyzes with a TOWS analysis to define all Threats, Opportunities, Weaknesses and Strengths, both internally and externally. The TOWS analysis will capture the key findings that will help us decide upon whether or not Gasmet has sustainable competitive advantages and are able to mitigate risks. The TOWS analysis will also be helpful in the work of deciding whether or not strategic changes are necessary. All information regarding Gasmet and it surroundings are taken from case text. External Analyzes – Key Findings In the sections below, we will present the key findings of our external analyzes. Full version of the external analyzes can be found in the appendix section. 2.0 PESTEL Analysis - Key Findings The key findings in the PESTEL analysis give us an understanding of the overall picture of Gasmet´s surroundings. There are for instant several political aspects one needs to be aware of in Gasmets position. Different governments control over access to natural gas reservoirs, political instability in existing and in emerging markets, and regulations and restriction within the industry are key political aspects. In Egypt, for instant, Gasmet met immediate obstacles because of the political landscape and an unstable scenario. In Chile, the company was forced to shut down three of its production facilities because of natural gas supply shortages. In New Zealand Gasmet was forced to shut down two of three plants for a period of two and three years, and today still one plant is not operational.
  • 5. Exam  Candidates:  21,  64,  69  &  80     4   There are also economical factors, which is important to address. There is a global recession, especially threatening the production in facilities in Egypt and Chile. Methanol prices are highly fluctuant and prices are controlled by the amount of accepted climate spillage. New technology trends have open up for new high growth markets within; fuel blending, biodiesel, MTO and DME. These technologies could also support existing market diffusion, and/or open up new markets for Gasmet. 3.0 The Methanol Industry: Competitive Environment The lack of cost-effective substitutes to methanol makes the bargaining power of the methanol buyers relatively low. The industry demand will remain close to unaffected by changes in spot prices. The industry buyers are though not locked to certain suppliers, and can choose freely their suppliers based on the supplier´s ability to deliver on time, to offer the lowest price. As the industry of methanol is very dependent on natural gas supplies in order to offer on-time delivery to its customers, and there are, at times, limited availability of natural gas supplies increase the bargaining power of the methanol industry suppliers. The different actors in the methanol industry compete primarily on two factors: 1) Price. 2) Ability to deliver on demand. The industry price level is based on average contract prices from several suppliers. Being the market leader, Gasmet´s price level are regarded at industry standard, but the price levels are at times fluctuating because of political and technological issues. Another aspect of the rivalry among industry actors is positioning of their production plants. As access to natural gas can be limited, actors in the industry can achieve competitive advantages by positioning production plants close to reliable natural gas extraction fields. Internal Analyzes – Key findings In the sections below, we will present the key findings of our internal analyzes. Full version of the internal analyzes can be found in the appendix section. 4.0 Value Chain Analysis – Key findings A significant success factor of Gasmet´s inbound logistics, are the company´s ability to negotiate long-term contracts with natural gas suppliers, to secure continuous access to raw materials. Gasmet has though little, or no control of inbounds logistics. Various circumstances (E.g. political or technological) have led to significant shortage of natural gas supplies –
  • 6. Exam  Candidates:  21,  64,  69  &  80     5   followed by production downtime. As they operate on long-term contracts with their suppliers, their options to acquire raw materials from other suppliers are limited. Gasmet, due to their storage facilities, also purchase already produced methanol from other producers in favorable times, store it, and then sell it when the market price are favorable. Gasmet conduct all production activities in-house. This allows full control over the production, continuously improvement of production efficiency, and keeps the transaction cost related to production actives low. Gasmet are in full control of outbound logistics of methanol, through their stand-alone business Shipfront Shipping Company. This, combined with storage hubs located around the world, allows them to be very flexible in the delivery of their product. Gasmet´s worldwide establishment of marketing offices enables market proximity. This also gives the company the opportunity to obtain close relationships with their customers in order to provide satisfying service. The company operates with different price levels in different geographical markets. 5.0 VRIN Analysis – Key findings In the following we will discuss some of the more important findings of the conducted VRIN analysis. We refer to Appendix 4: VRIN Analysis (Full Version), where a matrix summing up the analysis is presented. There are several reasons why Gasmet is one of the leading methanol manufacturers in the world. Their distribution network, with several major distribution hubs around the world, makes them agile, and can deliver their product all over the world. This also ties up with their logistical network with their own fleet of trucks, trains and ships, which allows them not to be depended on outsourcing this part of their value chain. Their own storage facilities makes them also unique, in that sense that they can stock up when the prices are low, giving a competitive edge to their competitors. But although they have all of these advantages against their competitors, we also found evidence of a declining trend within Gasmet and their competitive advantage. What we found in the analysis was that Gasmet in fact does not have any significant long- term sustainable competitive advantage. As the matrix in appendix 4 shows, none of the resources or capabilities measured fulfilled all the criteria to be considered as long-term
  • 7. Exam  Candidates:  21,  64,  69  &  80     6   sustainable competitive advantages. All the major resources/capabilities are all categorized as a temporary competitive advantage, hence being short-term advantages. Analyze Sum-Up 6.0 TOWS Analysis Below, a TOWS Matrix shows a sum-up of how the strengths and weaknesses of Gasmet affect the company´s ability to handle both opportunities and threats. +: Affects opportunity/threat positively, -: Affects opportunity/threat negatively, 0: No affect on opportunity/threat. Figure 1: Gasmet TOWS Matrix The TOWS-matrix forms the basis for taking a stand on whether or not Gasmet possess sustainable competitive advantages, are able to mitigate risks, and whether or not strategic adjustments are necessary in order to remain a robust competitive company. 7.0 Conclusion Do Gasmet Possess Sustainable Competitive Advantages? In a short-term perspective we believe, after assessing our business analyzes, that Gasmet will continue to keep their existing strong market leader position in the methanol industry. But in a long-term perspective, we conclude that Gasmet do not have a sustainable competitive advantage without making strategic moves with long-term perspective. We believe that the current competitive advantages will be neutralized within few years, because of their modest grade of sustainability presented in the VRIN analysis matrix. Gasmet are in need of continuous strategic entrepreneurship in order to keep their market position and create favorable conditions for growth (Hitt et al., 2003). McGrath (2013) and Osterwalder & Pigneur (2010) support our point of view and argue that it is no longer possible to create sustainable competitive advantage for longer periods (i.e. decades). Industry life cycles
  • 8. Exam  Candidates:  21,  64,  69  &  80     7   shrink, while markets and technology change very rapidly. To counteract these trends, businesses are in need of high-pace innovation. Rather than to be a victim of other companies disruptive strategies and tactics, we recommend that Gasmet itself speed up their R&D, creating their own new innovative disruptive; internal processes, production technologies, products and market. Are Gasmet Able to Mitigate Risks Related to Core Business? We conclude that Gasmet are able to mitigate risks related to their core business. As presented in the TOWS matrix, Gasmet possess a set of strengths that reduce risks related to the threats presented in the matrix. In general, we want to highlight Gasmet´s, market- technology- and logistics leader position and it´s worldwide presence as significant factors making the company able to mitigate risks related to the core business of methanol. These strengths enable market knowledge to handle political risks and access natural gas, technology and logistics to handle fluctuations in natural gas costs and supply as well as financial power to monitor and follow up-and-coming market trends. Maintain Current Strategy, or diversify? As implicated earlier in this conclusion, Gasmet are in need of continuous renewal in order to maintain competitive advantage. As a part of a long-term strategy, we see it necessary to diversify and expand into new businesses and markets in order to stimulate future company growth and reduce risks. The Southeast Asian market offer great opportunities: Diversification of business in a joint venture with XinAn (develop DME), and entering into the market of MTO. As Gasmet´s knowledge of the Chinese market is limited, we suggest diversifying to DME in partnership with XinAo as a first step of expanding the business. We see this as a natural first step because: -­‐ The XinAo Group knows the industry and market à Reduce risk of failure. -­‐ The DME market is already an established market. -­‐ Entering the Chinese market of DME shortens the path to the Chinese MTO market Performing such diversification enables Gasmet to mitigate risk, no longer be reliant on the success of one single product – methanol. A strategic option to enable entering new markets, is to sell in-effective production plants in unfavorable geographic areas, and open new production facilities to achieve sustainable production. This will most likely also increase the valuation of Gasmet, that right now are valued to only two-thirds of its asset value.
  • 9. Exam  Candidates:  21,  64,  69  &  80     8   References Barney, Jay (1991), Firm Resources and Sustained Competitive Advantage, Journal of Management, ProQuest Health Management Grundy, Tony (2006). Rethinking and reinventing Michael Porter’s five forces model, Wiley InterScience. Hitt, Michael A., Ireland, R. Duane, Sirmon, David G. and Trahms, Cheryl A. (2012), Strategic Entrepreneurship: Creating Value for Individuals, Organizations, and Society, Mays Business School Research Paper No. 2012-19. McGrath, R.G (2013). Transient Advantage. Harvard Business Review. Osterwald, Alexander & Pigneur, Yves (2010), Business Model Generation – A Handbook for Visionaries, Game Changers, and Challengers. US: John Wiley & Son Inc. Porter, M.E (1985), Competitive Advantage, Free Press, New York Porter, M.E (1996). What is strategy?, Harvard Business Review. All information regarding Gasmet and the market surrounding the company are taken from: Exam Case BUS305 (Autumn 2013), GASMET: DEVELOPING STRATEGY IN A COMMODITY INDUSTRY.
  • 10. Exam  Candidates:  21,  64,  69  &  80     9   Appendix 1: PESTEL Analysis (Full version) Introduction to our PESTEL analysis We have chosen to start our status quo business analysis with a PESTEL audit and assessment. The definition of the PESTEL model is; Political, Economic, Social, Technological, Environmental and Legal (Grundy 2006.). PESTEL analysis is a simple and effective tool used in status quo analysis to identify the key external (the macro environment level) forces that create impacts for a company. These forces can create both opportunities and threats for an organization. Therefore, the aim of performing PESTEL analysis is to find out the current factors affecting a company, what changes are going to happen in the external environment and to exploit those changes or defend (Risk Management) against them to be able to keep or create sustainable competitive advantage (Porter, 1985) (Barney, 1991). The result of our PESTEL analysis is an understanding of the overall picture surrounding Gasmet. Political Factors Negative political aspects: • The different governments politics control the access to natural gas • Political instability in emerging markets could lead to lower production, and therefor damage the distribution as well (Unstable countries: i.e.: Chile, Egypt) • Many new regulations and restrictions around formaldehyde and MTBE Positive political aspects: • Environmental, renewable and sustainable energy focused alternative fuel sources • Non-profit organizations works actively against companies that not work on renewable energy sources Economic Factors Negative economic aspects: • Global recession, especially threatened production facilities in Egypt and Chile. • Methanol prices highly fluctuant. Low price level does not increase demand significantly. • Prices controlled by the amount of accepted climate spillage
  • 11. Exam  Candidates:  21,  64,  69  &  80     10   Positive economic aspects: • Prices on methanol decided on by industry Social Factors • The world is moving towards green energy politics, policy, ethics and consumer awareness • Societies wants and anticipate that the gas and methanol industry gives back to local communities Technological Factors • The methanol industry is highly technology driven; smartest technology inventions and innovations gives better margins • Efficient plants (Less people used per plant than the industry norm) • Continual investment in production technology • High level of computerization – reducing the amount of needed people per production plant • High level of mechanization per production plant • New technology trends; MTO (Methanol-To-Olefin), new plastic production, can contribute to increase the usage and market demand for methanol Environmental Factors • Poor infrastructure in emerging markets • Methanol production is accepted as a non-pollution industry • Production is linked to available natural gas fields Legal Factors • Production and the industry are regulated both by national authorities and global political interests • Long-term and short-term contracts for production, big operational costs • New products within i.e.: Fuel blending, Biodiesel, DME and MTO should open for new patents (IPR strategies)
  • 12. Exam  Candidates:  21,  64,  69  &  80     11   Appendix 2: Five Forces of Competition in The Methanol Industry (Full Version) 1.0 Porters Five Forces Model – an introduction We will in this section analyze the different factors that create the competitive surroundings of Gasmet. Our framework for doing this is the well-known Five Forces Model, by Michael Porter (1980). The purpose of this model is to analyze how five different forces of competition impact the competitive environment in an industry. The model is presented in figure 1 below. By inserting available relevant information from the Gasmet case into this framework, we´ll be able to create a picture of how the competitive landscape, which Gasmet has to strategically navigate through, looks like. As we consider that the Five Forces Model as common knowledge to the reader of this report, there will be no further description of the Five Forces Model, and we´ll proceed to the analysis. 2.0 The Bargaining Power of The Buyers The bargaining power of the buyers in the methanol industry is relatively low. As there are no cost-effective substitutes to the traditional use, the demand for methanol will remain unaffected by changes in spot prices. In addition to this, absence of raw material input to the production plants, as well as unforeseen plant outages often reduces the available supplies of methanol – something that will reduce the bargaining power of the buyers further and increase methanol prices. The fact that methanol is a very standardized product will though contribute Figure  1:  Porter´s  Five  Forces  of  Competition  Model  (1980)  
  • 13. Exam  Candidates:  21,  64,  69  &  80     12   to increase the buyer´s bargaining power. They´re not locked to certain suppliers, and can choose their suppliers based on the suppliers ability to deliver on time, to the lowest price. 3.0 The Bargaining Power of The Suppliers The main inputs for producing methanol are energy and natural gas, witch make the methanol industry ability to deliver to customer very dependent on on-time delivery of these raw materials. The fact that there at times are limited availability on natural gas, because of e.g. interruptions to supply lines and international policies and regulations governing imports and exports, increases the bargaining power of the suppliers dramatically. Such shortage of natural gas will drive the price level upwards. 4.0 Substitutes There are few cost-effective substitutes to methanol. Because of this, changes in spot price won´t affect the industry demand. 5.0 Entry Barriers The fact that methanol is a fairly standardized product, reduces the number of customer lock- in situations in the business. This will increase new entrants opportunities to capture market shares from existing actors in the industry – as long as the new entrants can offer equal or lower methanol price than existing industry actors. There are though other barriers for new entries: Entering, and surviving in the industry of methanol production require significant resources invested in e.g. production plants and distribution channels. Even though the industry trend shows increasing demand for methanol, such investments also represent a fairly large amount of risks. What if the effect of new entrants leads to lowered spot prices and reduced profit in the industry? What if the research on more ecofriendly substitutes to methanol reaches a breakthrough? The access to natural gas needed to produce methanol are already limited – what will happen if the number of methanol plants increases further? Finally, the methanol industry is surrounded by international and regional regulations and policies witch can represent barriers of entry to the industry.
  • 14. Exam  Candidates:  21,  64,  69  &  80     13   6.0 Rivalry The different actors in the methanol business compete primarily on two factors: Price, and ability to deliver on demand. The contract price of methanol is driven by commodity spot prices based on average contract prices from several global suppliers. The industry market leader, Gasmet, have great influence on spot price. Gasmet´s price are regarded as industry standard. The prices are though periodically fluctuating, as a consequence of raw material fluctuations, unexpected outages of significant production plants and international and regional policies and regulations. Another aspect of the rivalry among the competitors in the methanol industry is the aspect of geographical positioning of production plants. The production of methanol is largely dependent on the supply of natural gas, and the actors in the industry can increase their access to raw materials by locating their production plants close to reliable natural gas extraction fields. Appendix 3: Gasmet Value Chain Analysis (Full Version) 1.0 Introduction This section will present a value chain analysis of Gasmet, conducted in order to identify the strengths and weaknesses of the different parts of Gasmet´s value chain. Such analysis will be helpful in the work of identifying possible competitive advantages, as well as areas that can be subject of improvement. Our analysis is based on Michael Porters (1985) Value Chain Model, presented in his book Competitive Advantage: Creating and Sustaining Superior Performance. Assuming the reader of this report are familiar with this model, we won´t describe the details around Porter´s Value Chain Model in this report. 2.0 Primary Activities Inbound Logistics Analyzing inbound logistics, we´ve chosen to focus on the supply of natural gas, witch represents 80 % of the product of methanol, as the Gasmet Exam Case Text do not focus on the remaining 20% content of the product. We are also assuming that the production plants grade of flexibility in geographical location are low, as the natural gas has to be transported from the natural gas production fields through gas pipes.
  • 15. Exam  Candidates:  21,  64,  69  &  80     14   A significant success factor of Gasmet´s inbound logistics, are the company´s ability to negotiate long-term contracts with natural gas suppliers, in order to secure continuous access to raw materials. Despite this, various circumstances (E.g. political or technological) have led to significant shortage of natural gas supplies – followed by production downtime. This led to a situation where Gasmet has little, or no control of inbounds logistics. As they operate on long-term contracts with their suppliers, their options to acquire raw materials from other suppliers are limited. When Gasmet receive supplies of natural gas, the raw material goes straight into the process of producing methanol. This leads to low, or none significant costs related to inventory. Gasmet also purchase already produced methanol from competing actors in the industry that, due to regional and international regulations or lack of storage possibilities are forced to get rid of their supplies of finished goods to favorable prices for Gasmet. As Gasmet storage facilities, the company can resell the methanol when market price level are high, in order to make a profit. Operations Gasmet are performing all activities necessary to perform the process of turning raw materials into methanol in-house. By not outsourcing any part of their production, Gasmet possess full control over their production, and the company are able to continuous improve production efficiency. Keeping the processes in-house, also leads to low transaction costs related to production activities. Outbound logistics Gasmet are in full control of their outbound logistics of methanol, through their stand-alone business Shipfront Shipping Company. This company was created to manage a fleet of 20 (2007) ocean-going vessels, which in addition to transporting methanol to Gasmet´s customers also generated revenue through transportation services on a contract basis to other companies when the vessels were not being used to transport methanol. Because of this horizontal integration, Gasmet´s control over outbound logistics is considered high. Some of the Gasmet production plant output is stored in storage facilities in The Netherlands, China, Canada and in the US, in order to be able to absorb market fluctuations, and to be able to deliver on demand.
  • 16. Exam  Candidates:  21,  64,  69  &  80     15   Marketing and Sales Gasmet has established marketing offices located in the Asia-Pacific region, North America, South America and Europe. This worldwide establishing of marketing offices enables market proximity. Only 10% of Gasmet´s revenues can be traced long-term contract customers. Having 90% of the company´s revenues represents significant transaction costs, but it will also contribute to selling methanol at a price level that have accordance to general level in the industry. Service The worldwide locations of Gasmet´s marketing offices gives the company the opportunity to obtain close relationships with their customers in order to provide satisfying service. The company also publishes reference price lists on a monthly basis, to keep their customers updated. The company operates with different price levels in different geographical markets. 3.0 Support Activities Firm Infrastructure As mentioned earlier, Gasmet has established regional offices worldwide. The case text do not explicit explain how these offices interact with each other, but it is natural to assume that each regional office holds capacity to run support activities related to handling to e.g. financial, legal, managerial and administrative issues on a regional level. Gasmet has their head quarters located in Vancouver, Canada. It is naturally to assume that support activities related to worldwide issues are run out from this location, where 200 of the company´s 1000 employees are located. Human Resource Management Gasmet are recruiting personnel from the regions close to the production plants, in order to create employment in local surroundings. The production workers are trained at production facilities, where they learn how to run high tech processes. The use of high technology enables Gasmet to use a significant lower amount of human resources in their operations, compared to other actors in the industry. Technological Development As mentioned in the previous section, Gasmet has developed high-tech production plants in order to reduce the need of human resources in production processes. The company is also involved in research of future use of methanol, in order to open new markets.
  • 17. Exam  Candidates:  21,  64,  69  &  80     16   Purchase The Gasmet case text gives implications that each production plants (or production plants geographically closely located to each other), has to negotiate with regional suppliers of natural gas individually. The contracts that are negotiated are long-term Appendix 4: VRIN Analysis (Full Version) Valuable Rear In- imitable Non- substituta ble Competitive advantage offered Distribution network Yes Yes No Yes Temporary advantage Logistic network Yes Yes No No Temporary advantage Long term contracts Yes No No No Potential advantage Locations Yes Yes No No Temporary advantage Technology based production Yes Yes No Yes Temporary advantage Storage Yes Yes No Yes Temporary advantage Human capital Yes No No Yes Minor advantage Partners Yes No No No No lasting advantage Figure  1:  VRIN  Matrix  showing  Gasmet´s  competitive  advantages In addition to the previous analysis discussed, we also include an analysis based on the VRIN- framework. This analysis aims to investigate company´s resources and capabilities, with the goal of creating an understanding of how these resources and capabilities help the company establish a sustainable competitive advantage. There are four characteristics within the VRIN- framework one could measure a specific resource; valuable; rare; inimitable; and non- substitutable, and all of these measures are important when it comes to creating a sustainable competitive edge. In the following we will discuss some of the more important findings, and reefer to appendix # for the whole analysis. There are several reasons why Gasmet is one of the leading Methanol manufacturers in the world. Their distribution network, with several major distribution hubs around the world, makes them agile, and can deliver their product all over the world. This also ties up with their logistical network with their own fleet of trucks, trains and ships, which allows them not to be depended on outsourcing this part of the value chain. Owning storage facilities makes them
  • 18. Exam  Candidates:  21,  64,  69  &  80     17   also unique, in that sense that they can stock up when the prices are low, giving a competitive edge to their competitors. But although they have all of these advantages to their competitors we also found evidence of a declining trend within Gasmet and their competitive advantage. What we found in the analysis was that Gasmet in fact does not have any significant long- term sustainable competitive advantage. As the matrix in appendix # shows, none of the resources or capabilities measured fulfilled all the criteria needed to be seen as a factor for sustainable competitive advantage. All the major resources/capabilities are all categorized as a temporary competitive advantage, hence being short-term advantages.