a value chain goes from raw materials to vision, goals and systems. Quality products and services and engaged employees for the value chain analysis. You analyze 3 areas. Products should be pulled through the chain by the consumers-Identify how well information flows as the second part of the analysis. The third looks at relationships- trust is the fundamental enabler. The analysis helps to identify the challenge areas and helps to add to the patient as well. If you can identify customers that are wiling to pay more for the product we can then add to that chain. Material---product---- user. A value chain can push savings down or pull money into the value chain.
Differentiation – stand out in the markets. Whether it’s packaging or different style to the products or make up. First the buying centre starts of with an indicator then influencer, decider, buyer, user and Gatekeeper. Consumer buying decision process:1) Problem recognition – Lack of differentiation, hence the launch of Makrolon2) Information search – Huge market for polycarbonate, decided to gain value in that market3) Evaluation alternatives – more than brand awareness, integrated branding required – build a name4) Purchase decision - 5) Post-purchase evaluation – made up to 75% of the market with GE
GE was experiencing more competition within the U.S markets because firms that were ignoring the Engineering plastics were now trying to get into that market segment due to high margins. Both Bayer’s and GE were experiencing definite issues economically through the U.S.
+MidtermComparativeAnalysis1.Marketing Plastics Resins2.Automotive Headlamps3.Makrolon: The High-TechBy: Leah Torres
+Overview- Bayer‘s Makrolon polycarbonate is designed for ‗flawless quality‘- Transfer tpositive image to the end product with the help of brandname. Unique selling proposition encourages end customer togive preference to products with Makrolon logo- Uses ingredient branding – brand awareness isn‘t enough- One of the global leading enterprises with core competitencies inthe fields of health care, nutrition, and high-tech materials.- There are 3 subgroups and 3 service companies (business,technology, industry) They are led by the management holdingcompany.- 75% of the polycarbonate market is Bayer and GE Plastics
+5 Forces Analysis Threat of New Entrants: High Risk- Bayer chose China with Shanghai as location to strengthen it‘scompetitor advantage.- BW and GE experiencing new entrants due to U.S and foreignfirms entering into Engineering Plastics. Of those newentrants, most are sold through brokers and independentregional resellers- BW and Miles had to integrate GE‘s FMD method to staycompetitive and giving GE more competition.- Engineering material suppliers soon found sales efforts atmolders to be difficult
+5 Forces Analysis Bargaining Power of Buyers: High Risk- Headlamps demanded a different altercations regarding size orshape- A very price sensitive market- Environmental changes creating market stress for not onlysuppliers but manufacturers and end users- Specifiers developed new strategies – lack of flexibility led Fordand GM to develop internal standards in order to alleviatesupply problem
+5 Forces Analysis Threat of Substitutes: Moderate Risk- Innovative products replacing the headlamp materials or thecombination- Safety regulations brought to attention – no use for product- Substitutes for commodity plastics – banning all together due toenvironmental issues- Banning of all lighting products recently produced – shifting theway companies work- Polycarbonate no longer of use to our world due to innovativesubstitute that is eco-friendly
+5 Forces Analysis Bargaining Power of Suppliers: High Risk- Facing competition due to GE‘s FMD implications- Changing market environment- Sales channels and field marketing where a huge impact onthe way companies chose to provide products/services tocustomers- Some independent suppliers that made glass headlamps thatmade glass headlamps had investments and vested interests inconventional glass sealed- beam lamp manufacturing. Notreceptive to change.
+5 Forces Analysis Rivalry Among Existing Competitors: High Risk- Other engineering suppliers adopted GE‘s FMD method tostay competitive - Bw and Miles- Bayer‘s existing competition is consisting of 9 differentcompanies: SABIC, DOW, Teijin, Mitsubishi Chemical Group,Idemitsu, Sam Yang, Chi Mei, Formosa, and polycarbonatos doBrasil. SABIC owns 75% of the marketplace- There was some objections that plastic headlamps would work
+Value Chain Analysis Logistics-Bayer‘s started integrated branding campaign to inform buyers about Makrolon.Both partners are advertising together which essentially creates added-valuewithout Sharing costs R&D- Copious amounts of R&D for product standards and safety regulations- Extensive research for PC and rise into new intermediates Product- Use of Polycarbonates is continuous- Countless producers rely on this ingredient for their products to which they sellor manufacture- Within a price sensitive market segment. Consumer faith in core product- Brand usage agreements- Thermosets and Thermoplastics – product differentiation
+Value Chain Analysis Marketing Competition- Unique integrated branding strategy- Brand in it‘s own right and uses Bayer‘s cross- Sensitive use of brand in order to maintain ‗flawless quality‘ seenby customers- Intercity locomotives for advertising space Sales/Delivery- Business to business model – through the purchase of rawmaterials (pellets) and manufacturers->suppliers->buyers Service- Not involved in ‗price wars‘ with the constant use of Bayer‘s cross- Interdependence
+Value Chain Analysis Firm Infrastructure- Manufacturing and production- Environmental, energy and power – Bayer MaterialScience Human Resources- Promotes training and opportunity development Technology- Bayer Technology Services – backbone – plant engineering Operations- Raw materials manufactured then to suppliers
+Product Life Cycle Polycarbonate Makrolon is nearing the end of their growthstage and will start to ―milk sales‖- Managing demand at this point and focusing on theirpenetration method – if demand is too high then they shouldfocus on skimming Bayer is at the early stages of the cycle – establishing a high-tech plastics Makrolon as a brand with the user- Relationships are very important to Bayer at this stage of theirproduct life cycle – innovation should be pushed- Making their customers feel as though they are irreplaceable
+Brand AnalysisBrand Promise:To maintain their ―flawless quality‖ andgive their customers the best theypossibly can achieveBrand Personality:Very Strict, passionate, concerning, tedious,classy and genuinely optimistic brandBrandImpression:Customers recognize their brand asvery trust worthy and consistentlybringing results
+Channel Relationship Analysis Economic Utility- Provides the best quality polycarbonate to customers within it‘smarket and covers a huge market share. Advertising:- Advertising campaigns, brochures, flyers, websites andexhibitions Physical Distributions- China has a growth market and Bayer has partnered with them Integration- Backward Vertical integration
+The Buying Centre Analysis Bayer provides Good service – fast- not cheap Suppliers of Engineering plastics were not backward integrated in thesupply chain for chemicals The Buying Centre:- Indicator: Financial advisors, managers indicating a problem area- Influencer: Corporate, Bayer HealthCare, CorpScience, andMaterialScience- Decider: GE and the FMD method for Commodity plastics- Buyer: General Motors, Ford buying the end product from their OEMS- User: Consumer buying the end products, General Motors, and Ford- Gatekeeper: Bayer Group
+TOWS Analysis? External Opportunities- Crude oil crisis in the past as well as shifting market environment- Increase in demand for U.S market External Threats- Increasing costs for material/raw goods/chemicals- Competition is rising within the polycarbonate market Internal Strengths- Unique marketing method – integrated branding- Maintaining healthy supplier partnerships- Brand strength - Bayer Cross – flawless quality maintained Internal weaknesses- Deterioration arising in the future
+TOWS Strategy Maxy-maxy (SO)- Bayer‘s has control of the market and must maximize strenghs and maximize it‘s opportunities Maxy-mini- Think about acquisition partners or expand to meet market demand. Skimming or penetration methods- CRM Analysis Sales Promotions: Allowed to require foreign affiliates due to military government pushing Allied law Public Relations: Build up familiarity of brand – partners explain advantages of their polycarbonate and why itdifferentiates it‘self.- Uses Ad campaigns in order to initiate pull factor from buyers and find potential buyers as well.- Advertising campaigns, flyers, web sites and exhibitions- Intercity locomotives Personal Selling:- Dealing directly face-to-face with it‘s end users and suppliers to develop relationships
+PESTLE Analysis Political:- The Department of Transportation (DOT) and NHTSA were responsible formaintaining safety standards for the industry; regulating lighting (lamp division).Issues with plastic headlamps for cars – lifetime, durability.- License contracts for pre-product tests to secure quality for not only Bayer‘s butalso contractual agreements amongst BW and GE. FMD, providing Goodwillprovided specifiers with up to date product developments- Increased competition due to ignorance of the Engineering Plastics. U.Scompanies and foreign companies entering U.S market- 1990s faced globalization barriers. The radical political changes that occurredin Germany and Europe- Gross cash flows decreasing in 2006 impacting overall performance for allcompanies dealing with plastics. – suppliers, OEMS, and manufacturers- The plastic and halogen bulb combi-nation would reduce the risk of fire in arear-end collision— since the Lexan was virtually unbreakable and even ifbroken, the bulb fila-ment was separately encapsulated.
+PESTLE Analysis Economical/Financial- Crude oil, energy crisis of 1970 had a major impact of plastics industry whichnot only affected Bayer‘s Makrolon due to cutbacks in crude oil meant plasticsmanufacturers were not able to meet demand from molders materials orsuppliers.- BW implemented PSC‘s in order to serve a new demand/approach. Bayer‘sunderwent many modifications before it became extremely successful.- Many firms were competing within the U.S markets regarding the plasticsindustry and Makrolon polycarbonate was lagging within this industry. GE wasexperiencing more competition within the U.S markets.- General Electirc Plastics and General Electric Lamp Divisions were undergoinginnovation issues. All 3 cases dealt with some sort of innovation issue due tothe changing market and cometition.- 75% of the polycarbonate market is held between Bayer‘s and GE Plastics- Mild recession earlier in business life
+PESTLE Analysis Social/Cultural- Borg Warner had the skills and the culture to assemble the kindof service packaging for LTL customers. Bayer‘s, GE, Ford andGEL were all dealing with the competition of new entrants –Changes in distribution- Change in demographics due to the distribution changes ofnew entrants leading to greater competition or even losses- Switching from glass to plastics for BW was a very difficultbarrier it needed to endure in order to maintain it‘s culture.- Objections that plastic headlamps wouldn‘t work – unable tokeep seal, lens failure, engineering not approved by regulators
+PESTLE Analysis Technological- Bayer‘s Medical Technology is one of their successfulsegments which has gone under extensive R&D andundergone many practices in order to avoid failure- GE and BW with the functionality through their headlampstransfer to vehicles of Ford, General Motors, etc. Engineershave given the opportunity to focus on R&D and how to buildthe innovative products from glass to plastic or combination ofmaterials.
+PESTLE Analysis Environment- -Risk of fire in the rear-end collision- The plastic material‘s impact on the environment and the damagesit could cause from poor disposal or overuse Legal- U.S DOT (Department of Transportation) and NHTSA wereresponsible for maintaining safety standards for the industry andthe final product (lighting, headlamps) as well as regulatoryprecautions- There are numerous patents for all companies dealing with theplastics as well as BW and GE in order to maintain sequences orproducts.