The Synthetic Rubber Polymer Business Essay

Words: 3973
Pages: 16

Table of Contents

1. Identification... 3
1.1 Background… 3
1.2 Problem Statement... 4
2. Analysis & Evaluation… 7
2.1 Analysis… 7
2.2 Evaluation… 11
3. Recommendations… 15
4. Plan of Action… 19
4.1 Agenda of actions… 19
4.2 Time Line… 23
4.2.1 Short Term… 23
4.2.2 Medium Term… 23
4.2.3 Long Term… 24

Exhibit 1 Nova Corporation’s Five Years Financial Review… 25

Exhibit 2 H-NBR Market Forecast… 26

Exhibit 3 Specialty Component of Rubber Business… 27

Exhibit 4 The Major International Producers of NBR in 1988… 28

Exhibit 5 Polysar Organization… 29

Exhibit 6 H-NBR Market
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Revised forecasts of the H-NBR market demand (see Exhibit 6), suggest a pattern of very slow increase in the U.S. market for the demand of higher quality rubber. Production of H-NBR by the two biggest players (i.e. Nippon Zeon and Polysar) for the U.S. market can approach the 2,950 tons mark in the 90’s (see Exhibit 2). However the demand could also be as low as 200 tons. The question that must be asked in order to satisfy that dilemma is what must be done in case the supply exceeds the demand for H-NBR? In order to answer that question, we will start by studying the competitive environment in which Polysar Limited operated; we will look at the five basic competitive forces as illustrated in the “five-force” model: 1. The threat of new entrants;
2. The bargaining power of buyers;
3. The bargaining power of suppliers;
4. The threat of substitute products and services;
5. The intensity of rivalry among competitors in an industry.

Each of these forces affects a firm’s ability to compete in a given market. Together, they determine the profit potential for a particular industry.

Industry Force High? Medium? Low? Why?
1. Threat of new entrants Low Specialized market dominated by three giants on a global level. 2. Power of buyers Medium Automotive industry. Influencing accordingly. 3. Power of suppliers