Success and Failures of Dow Chemical Company – Term Paper

Some of the success of Dow chemical Company includes its collaboration to accelerate the performance progress (Form 10-K, 2015). Dow’s chain management operations are supported by its effective technological integration in the expertise center that works across all the company’s segments. Though the use of 3-D modeling and simulation programs Dow chemical company has been able to determine the production locations and facilities (Form 10-K, 2015).

Its effective expertise application is another success that Dow has managed to achieve in the past decade. Minimizing the cost of production is one of the ways that can help the business organization improve its profitability. Dow has also adopted the same strategy focusing on reducing the cost of production and improving its operations to be able to not only apply the expertise effectively but also improve its performance through increased profitability (Form 10-K, 2015).

Among the failures of Dow includes its production level; the company’s aim includes becoming one of the top world plastic and chemical manufacturing company and yet it still operates in almost 25% of plastic products. The current plastic manufacturing and production level remain at 25% with the majority of the products designed for automotive and construction sectors.

Current Dow organizational strategy

Apart from examining their environmental factors that affect the business operations, Dow has also put into consideration the external analysis of the company’s performance. Some of the ways that Dow has put in place to ensure proper organizational analysis include identifying the strategic business opportunities and threats in the operating environment. Globalization has significantly influenced the operations of various business organizations. With the emergence of different businesses dealing with the same product, competition has become a common and daily challenge that every business considers to be a threat to their operations (Tullo, 2015). Dow has also considered the potential competitors in the market as one of the potential threats to the business through its external analysis. Supply and buyer power is another important factor that Dow identifies as a significant factor that needs to be determined when carrying out the external analysis in the business environment. Dow has tried to manage the external forces affecting the business through an analysis. The company has chosen to focus on its niche and divest investment in unrelated businesses to be able to create and determine a unique operational position that is uniquely identified with Dow and not any other business competitor in the market (Form 10-K, 2015). Dow currently operates under two main strategies; business level and global level strategies (Form 10-K, 2015). Although it focuses on the two main levels of strategies, Dow also puts into consideration other available and beneficial strategies such as stakeholders profit levels. The business level strategy is determined by its position and placement in the marketplace through an extraction of some elements of other strategies such as differentiation and cost leadership strategy in order to obtain the dynamic competitive market advantage. The integration of few of the elements from various strategies has ensured that the company continues to access and increase its market share. Through the differentiation strategy element, Dow is able to establish a more competitive advantage platform through the creation of new innovative products that not only meets the dynamic customer behavior and desire but also uniquely differentiates other competitors in the market with Dow chemical company (Form 10-K, 2015). However, the differentiation element in the business level strategy ensures that the company maintains its simple organizational structure but also meets customers’ needs through good quality products that are uniquely identified with Dow chemical company.

Current Dow functional strategies

Human resource strategy

Human resource department is one of the most crucial departments in the organization that greatly determines the success of the organization. Dow has tried to adopt the right and perfect human resource strategy that would ensure that the company continues to increase its profitability and also reduce the employee compensation costs. However, to be able to achieve this Dow has integrated some of the elements from cost-leadership strategy (Form 10-K, 2015); for example, the company has adopted the decentralized form of human resource management which focuses more on the day-to-day functions of the company’s niche and minimizing the employee compensation costs. This element is advantageous to Dow as it opens the corporate communication means and also enhances the employee engagement in the organization through the incorporation of the organizational mission and objectives (Form 10-K, 2015). This strategy has helped Dow reduce over 30% of its workforce and layers of management without affecting the production level and profitability of the business (Form 10-K, 2010). The current Dow’s human resource department only contains five people that range from the most junior employee to the chief executive officer.

Marketing strategy

Dow chemical company seems to be developing well with effective marketing strategy. The past successful performance of Dow has been based on the company’s ability to integrate the basic marketing strategy with the mission and vision of the company (Form 10-K, 2015). The company tries to work with the integrated mission of becoming a top world plastic and chemical manufacturing company with the marketing performing by identifying and creating new market opportunities and technologies that allow the company expands its operations to other continents across the globe. Dow aims to achieve this mission through the creation and developing competitive marketing strategies in the selected markets. As a result, Dow focuses on the macro-environmental forces that provide it with the opportunity to consider the current economy interest rates (Form 10-K, 2015). Again, Dow focuses on meeting the consumer needs and desires by developing new and unique products and services that are uniquely identified with the company and is also able to meet customers’ needs.

Production and purchasing strategies

Dow chemical company believes in the integrity and ethical values that have enabled the company advance in the past decade becoming one of the fastest growing and developing companies in America (Form 10-K, 2015). The company upholds the integrity of producing quality products that are harmless to the customers and meets their needs. Therefore, the company focuses on the quality performance by adopting the production and purchasing ways through the six sigma initiative strategy (Form 10-K, 2015). The six sigma initiative strategy focuses on the improvement and maintenance of good quality products for the welfare of the customers. Achieving the quality that the customer desires depends on the level of commitment and excellence by every stakeholder in the organization. Teamwork is one of the means to achieve the good quality production that meets the customers’ needs. As Mr. Harris explained in the interview session, the management has a significant role to play in the production process. The management assures the rest of the stakeholders especially the customers the company has the ability to produce quality products that can compel them to buy the products. However, this can only be achieved through proper and coordinated teamwork protocol.