E.I. du Pont de Nemours & Co.: Titanium Dioxide Harvard Case Solution & Analysis

INTRODUCTION:

Du Pont started its business in 1802 and since then the company successfully grew and diversified its operations to cope with the risks, which might be faced in the future. However, Du Pont is now one of the leading manufacturing companies and it has diversified its business in fiber, plastics, and industrial chemicals and in other chemical products.

However, the company is recording its growth rapidly and it wants to capture the market share as much as possible. Du Pont proposed and implemented many strategies since 1802, however recently due to the market conditions the company introduced two more strategies and wanted to implement the best strategy for the company’s future growth.

DESCRIPTION OF THE IDENTIFIED PROBLEM:

The problem in the case for the management of Du Pont is that whether it should go for Growth strategy or Maintain strategy. However, both strategies have their own advantages and disadvantages. However,the company is also concerned with other factors, which may affect each strategy.

Du Pont’s strategy is that it wants to identify which project is more attractive in terms of numbers and also in terms of other related factors. Du Pont is also concerned about the expected future depressed market; therefore it decided to implement the strategy, which is more feasible for the company to cover expected future depressed market.

De Pont is also considering capturing the market share as much as possible and therefore,it introduced growth strategy however, the company might face limited resources or financing issues if it goes with the growth strategy. Therefore,De Pont has considered choosing one strategy, which would be more feasible for the company in future.

ANALYSIS

Du Pont’s competitive advantages in the TiO2 market as of 1972

Du Pont is one of the leading manufacturing companies in the U.S. Its primary objective is to compete with other market competitors to brought innovation, technology, efficiency and cost cutting measures in the process as well as in Tio2 process. However, the earnings of the company are $357 million on 3.8 billion sales, which clearly showed that the company is growing. The two different processes to manufacture Tio2 allowed the company to adopt one process, which has low cost and recently the domestic sales of Tio2 cover 90% of domestic supply which increased the profitability of company and also increased the market share of the company. These reasons provided the competitive advantage to Du Pont especially in TiO2 market.

Al though the benefit is that Du Pont’s strategy for its product and future success is always aggressive and the management of Du Pont tried to introduce a strategy and forecasted new strategy and analyzed those strategies,which are more feasible for it.Moreover, recently the management wanted to go with one strategy, which is analyzed in other sheet. This behavior from the management helped the company

to get more market share in the future.
As discussed earlier the management of Du Pont wanted to opt for one strategy from growth strategy and maintain strategy. Therefore,the intentions of management are to adopt some strategies, which helped them in future to increase their market growth as well as sales and net income. These things will help Du Pont in future to retain its competitive advantage.

The forecasted evaluation for expected incremental cash flows is attached with the file and it is associated with Du Pont’s growth and maintains strategy for TiO2. However,the cash inflows figure has increased by 3% growth rate and the working capital has increased by 20% of the forecasted sales. These figures clearly show that the future cash inflows will be better and would helpTiO2 to capture the market share.....................

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