5. $4,200,000,000,000
○ 23% of the United States’ Public Debt: $18,152,519,173,098
○ Would be the 4th largest country by GDP, below the US, China, and
Japan
2013 Global Chemical Sales
6. Sales By Region
China $1,391
Rest of Asia $1,014
Europe $836
North America $701
Rest of the World $250
Total $4,192
*All numbers in billions
China $1,391
USA $618
Japan $201
Germany $199
Rest of the World $1,782
Total $4,192
Sales By Country
7. Top 5 Companies by Sales
Company Country Chemical
Sales*
% of Total
Sales
BASF Germany $78.6 80%
China Petroleum & Chemical
Company (Sinopec)
China $60.8 13%
Dow Chemical Company USA $57.1 100%
Saudi Basic Industries
Corporation (SABIC)
Saudi Arabia $43.6 87%
ExxonMobil USA $39.0 9.3%
*All numbers In billions
8. Buyer Power
Players:
o Manufacturers of plastic products,
consumer chemical manufacturers,
water utility companies, etc.
Strengths:
o Medium to Large businesses
o Commoditization of chemicals
Weaknesses:
o Large number of buyers
o Low threat of backward integration
o Contractual obligations
Buyer Threat is Medium
9. Supplier Power
Players:
o Multinational oil and gas
companies
Strengths:
o Oligopoly
o Forward Integration
Weaknesses:
o Reduction in oil prices
o Commoditization of raw materials,
Supplier Threat is Medium
10. Threat of New Entrants
Weaknesses:
● Economies of scale
● High start-up capitals
● Power of existing companies
Threats of New Entrants is Medium
13. Summary of The Five Forces
Buyer Power: Medium
Supplier Power: Medium
Threat of New Entrants: Medium
Threat of Substitutes: Weak
Degree of Rivalry: Strong
14. Impacts on the Industry
Shale Gas
o United States has 2,700 trillion
cubic feet (estimated) of natural
gas
o 40% is from shale deposits
o Reduced the price of natural gas
from $12USD to $2.79USD/ TCF
Meet
o 115 years of demand
15. Impacts on the Industry
Trade
o TAFTA (Trans-Atlantic Free
Trade Agreement)
o TPP (Trans-Pacific Partnership)
o EU-China Summit
16. Impacts on the Industry
Capital investment
• $447.3 b (2014)
• $ 592 billion by 2019
R&D expenditure
• $57.5 b (2014)
• $ 69.8 billion by 2019
17. Most successful
firm
DOW Chemical Company
Vertical integration
o US Shale gas vs Oil-based fuel
o Joint ventures in middle east, Asia Pacific
o Increase profit margin
o Increase in revenue $3 billion annually
18. Most successful firm
Geographical reach
o Customers in 180 countries
o 201 production plants in 36 countries
o Trans Pacific Partnership
▪ Asia Pacific, Latin America & E. Europe
Diversified product portfolios
o 6 business segments
DOW Chemical Company
19. DOW Chemical Company
Game changing product innovations
o Spent $1.6 billion in R&D
o Sales new products composed of 30% of revenue
o R&D in agricultural chemical segment $1b
incremental revenue by 2018
Intellectual properties
o 2014 635 US patents
o 23% of revenue
20. Financial performance
o Positive revenue growth & Profit margin
o Stock Price jumped 90% in 5 years
($27.04 to $51.44)
DOW : Key Financial Ratios
Ratio 2010 2011 2012 2013 2014
Profit margin 4.3% 4.6% 1.9% 8.4% 6.5%
Revenue Growth 19.6% 11.8% -5.3% 0.5% 1.9%
Debt/Asset Ratio 67.5% 66.1% 68.6% 59.8% 67.1%
Return on assets 3.4% 4.0% 1.6% 6.9% 5.5%
DOW Chemical Company
