A road map for the future
1. Refashion your business model and operations
A close scrutiny of the operational parameters, technology and processes in use, the products in the market, and more is crucial for a company’s success in Europe. Further, vertical and horizontal integration across the value chain and functions, respectively, needs to be an integral part of the business model.
2. Identify the optimum feedstock blend
While a base petrochemicals player may focus on acquiring low-cost feedstock, a specialty chemicals player will need to evaluate its cost structure and identify a collaboration strategy to acquire raw materials from commodity and diversified chemicals companies. A diversified company, on the other hand, can invest in an integrated facility to achieve cost savings with a sustainable supply of raw material.
3. Enhance supply chain flexibility
Facing perennial volatility, chemicals in Europe need to identify how best to develop an agile and adaptable supply chain that fulfills safety requirements. A supply chain challenge such as the bull-whip effect is magnified in case of the chemicals industry, as the excess inventory not only increases shelf space but also deteriorates in value.
4. Ascertain the suitable business portfolio
You need to identify the emerging megatrends in different regions and how they will drive the demand for their products. Growth will primarily come from technology breakthroughs in the medical, IT, electronics, automotive and energy sectors. An eye for the megatrends will help differentiate the products with high-margin, high-growth potential.
5. Differentiate your innovation investment strategy according to your customers
For instance, a commodity chemicals company that is energy- and feedstock-intensive should invest in raw-material innovation that reduces costs and facilitates sustainable products. Further, you need to develop innovation road maps with specific R&D targets in each (feedstock, processes and products and solutions), helping to apportion limited resources.
6. Attract the right skill set
You need three integrated elements in your talent pool:
- Scientists who develop innovative products
- Industry experts who identify the emerging needs of the dynamic end-user industry
- Technology experts who help consistently upgrade technology to optimize costs
Companies need to modify their compensation, HR and employee safety policies to facilitate a better working environment.