Internationalisation: the strategic challenge for Western fine chemicals company Bayer Chemicals arising from the growth of China. (PDF)

Seminar paper from the year 2004 in the subject Business economics - Business Management, Corporate Governance, grade: 1,7, University of Bradford (Management School), language: English, abstract: The chemical industry is truly a global industry. It has major strongholds throughout the world, in particular Western Europe and the United States of America. Large chemical sectors have also been created in Saudi Arabia and India, Russia is a major producer in Eastern Europe, whilst in the Far East, China, South Korea and Taiwan are important producers (Business Ratios, 2001). The main focus of the industry is the processing and manufacturing of raw materials and the supply of semi-processed raw materials to other industries. Marketing therefore concentrates on the business-to-business sale of commodity products, with demand being dependent on global economic factors and the level of consumer expenditure - particularly in developed countries (Keynotes, 2000). Due to its vast geographic spread, the industry is relentlessly impacted by the internationalisation of business and its players operate under vastly differing socioeconomic climates. Chemical producers in the West are coming under increasing pressure to match the costs of their global rivals, particularly China, but with substantial differences in environmental protection, government intervention, labour costs and health and safety issues, this is a major challenge. Therefore the objectives of this assignment will be to: 1. Review the trends and developments in the fine chemicals industry. 2. Evaluate the trade and investment theories for the Fine Chemicals Industry in China. 3. Investigate the possible forms of market entry strategies. 4. Consider the strategy and structure of a typical Western company and how it should react. (As Bayer Chemicals (BCH) can be regarded as a major player in the global chemicals business it will be used to illustrate this) 5. Make recommendations, based on the findings of the assignment.