DuPont's Titatium Dioxide Business - Should DuPont increase capacity

DuPont faced two distinct strategic options in TiO2 cranch business - whether to adopt a ?growth? schema wasteweir forward and committing itself to higher(prenominal) investments or to embrace a ? jock? scheme which required lesser investments and would still lead to an metamorphose magnitude mart share. The task force set up by the Pigments Department at DuPont made certain assumptions composition conducting exact economic analyses of its competitors, which included the possibility of competing sulfate producers excerpt NL, exiting the market due(p) to an already marginal economics and large reinvestment, discretion environmental shocks. Although reinvestment for enforcing environmental standards would besides be required to be made by the chloride producers, it is mistaken that there would be no reduction in rutile chloride capacity. The assumptions related to the response of DuPont?s competitors to its detonation strategy, external shocks on supply and demand, an d sustainability of its competitive advantages are likewise implicit in the market forecasts. DuPont?s pigment parting appears to assume that its competitors would not respond aggressively to any of the strategy choices it makes. It is risky to assume that competitors like Cabot, American Cyanamid and Kerr-McGee, which make up 29%, 55% and 26% of their sales (Exhibit 4) from their respective chemicals divisions, would not respond aggressively to DuPont?s growth strategy.

Exhibit 7 indicates that the demand (size of market) would continue to expand at 3% all year and the customers give not be price sensitive. Forecasted prices were assumed to be lower ! infra growth strategy until 1979 and higher thereafter. These assumptions would aim to be discussed in a meeting with pigments department. down the stairs a ?maintain? strategy choice by DuPont, it is assumed that prices will increase in a greater account than under ?growth? strategy in the initial years. It could be due to a relatively lower investment in newer... If you insufficiency to get a full essay, order it on our website: OrderCustomPaper.com

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