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Chemical market analysis

Navigating Complexity for Specialty Chemical Companies: 8 Major Roadblocks and How to Over Them

With plummeting profitability and increasing market competition, specialty chemical companies are undergoing several unique challenges. They must identify strategies to pull through such roadblocks in order to survive in the long run.

The global specialty chemicals market continues to expand at a rapid pace. This growth has been underpinned by factors including increased productivity, sound business models, and portfolio restructuring. However, market growth isn’t exactly good news for the existing companies in the specialty chemicals industry. The flourishing market means that it would draw in more players and add on to the competitive pressure in the industry. Therefore, survival for specialty chemical companies greatly depends on understanding the most pressing challenges and leveraging insightful strategic planning to overcome them.

Key challenges facing specialty chemical companies 2019

specialty chemical companiesChanging business portfolios

Specialty chemical companies are increasingly being transformed through increasing product diversification and rapid merger and acquisition activities. Business portfolios of specialty chemical companies are constantly changing as producers add and dispossess divisions, engage in new market entries, and participate in mergers. Moreover, globalization has increased the business portfolio complexity of specialty chemical companies.

Dynamic demand patterns

One of the key challenges faced by specialty chemical manufacturers is uncertain and unpredictable demand patterns. They also have only limited visibility into future customer orders. The growing customer portfolios spanning over several end-use markets and visibility into demand variability represents significant challenges for specialty chemicals manufacturers.

Specialty chemical companies are currently facing several unique challenges. Fortunately, there are some strategies that specialty chemicals producers can take to support success. RFP for more insights.

Expanding product portfolios

In order to increase differentiation, strategize new market entry, and maximize customer loyalty, specialty chemical companies are continuously experimenting with new product innovations. New product introductions coupled with frequent adaptation of existing products have caused a significant rise in the number of products produced, consequently, leading to greater operational complexity.

Regulation and compliance

Specialty chemicals manufacturers are increasingly facing issues in documentation and certification of product quality and procedural compliance. These issues are largely driven by government regulations, end-use market requirements, or specific customer requirements. Furthermore, batch and lot level traceability requirements are becoming common in several segments and add to the complexity of operations.

Increasing customer intimacy

Specialty chemical companies are increasingly adopting the trend of moving closer to their customers by offering them tailored products and customer-specific service arrangements. Although moving closer to the customers has been a source of differentiation for specialty chemical companies, it has resulted in increased complexity of other business operations.

Get in touch with an analyst to know how we help clients in the chemical industry to keep track of market challenges and learn how our tailor-made solutions can help overcome major roadblocks in the market.

Industry price changes

The raw materials used by specialty chemical manufacturers are often priced on the higher side. The market fluctuations between countries often leave manufacturers vulnerable to the associated price drops. For instance, the 2014 shale gas price drop in the US resulted in heightened competition in Europe. This placed additional pressure on manufacturers in an already high-pressure market.

Growing demand for multi-stage manufacturing

Customers are increasingly seeking specialty chemicals that can only be produced through complex, multi-stage, multi-product processes that require more time to complete and an extensive list of components. Both of these can largely cut into the profit margin of specialty chemical companies.

Technology upgrade requirements

Most of the digital technology available today can be both a boon and a bane for specialty chemicals companies. While tools like IoT, artificial intelligence, and blockchain provide several advantages, implementing and integrating them into existing processes can be a time consuming and labor-intensive process.

Learn more about Infiniti’s tailor-made solutions for specialty chemical companies

Global-Meetings-and-Events-Market_CMST31

Infiniti’s Marketing Strategy Helps A Renowned Organic Chemicals Manufacturer Analyze their Business Performance

Amid declining production and inventory rightsizing, the chemical industry witnessed an increased sales growth of 2.1% in 2016

The organic chemicals space is witnessing considerable growth with the rising industrialization and rapid urbanization. With the growing demand for organic chemicals among the end-user segments such as food and beverages, pharmaceuticals, and pesticides, the chemical industry at large is focusing on innovations to improve their production capabilities and enhance their overall marketing return on investment.  Additional factors such as the growing financial prosperity coupled with the rising disposable income levels are expected to have a positive impact on the growth of the organic chemicals manufacturing space. Stringent regulations and growing awareness regarding the adverse effect of organic chemicals on health and environment may hinder the growth of the chemical industry. Our experts at Infiniti provide strategic insights that help in gaining a better understanding of the chemical industry trends and the drivers influencing the demand for organic chemicals.

Here are some of the challenges faced by the companies in the organic chemicals space:

  • Increasing competition: Staying ahead of the competition becomes a challenge for the organic chemicals manufacturers with new players coming from non-traditional sectors such as energy, utilities, and mining. Moreover, companies operating in the chemical industry are reinventing themselves to become more agile and retain their market share in the industry.
  • Keep pace with the rapid regulatory changes: Today, the organic chemicals manufacturers have to meet regulations in terms of labeling, handling, and storage of the products. So, organizations need to invest extensively in research and development to ensure that they are compliant with the set regulatory standards.

For players looking to establish themselves as major organic chemicals manufacturers, marketing strategy helps outline a business plan to achieve the desired business goals. Companies in the organic chemicals space can leverage the use of marketing strategy to understand the current chemical industry trends and identify the competitors to improve the overall business performance.IR_RFP

The Business Challenge

  • The client- A renowned organic chemicals manufacturer

The client, a renowned organic chemicals manufacturer, wanted to better understand the chemical industry trends and the unique selling proposition to differentiate their products from the other suppliers of organic chemicals. The organic chemicals manufacturer also wanted to understand the 5Ps of the marketing mix regarding the product, price, place, promotion, and the people. Through a robust marketing strategy, the manufacturer wanted to keep the brand in mind to develop, assess, and devise an effective marketing plan.

Want to learn more about how our marketing strategy helped the client identify the chemical industry trends?

Ask an analyst


Our Journey

To devise a robust marketing plan for the organic chemicals manufacturer, Infiniti’s marketing strategy experts carried out extensive research comprising interviews and discussions with prominent stakeholders in the chemical industry. Moreover, to identify the latest chemical industry trends, our experts compiled information from a wide array of reliable sources such as trade shows, company presentations, and industry forums.

The Solution Benefits and the Business Impact

The marketing strategy solution offered by Infiniti offered insights to help the client create a flexible strategy to respond to changes in the customer perception and demand. Moreover, the organic chemicals manufacturer was able to develop a SWOT analysis to understand the strengths and weakness of the companies operating in the organic chemicals space. Moreover, the client was able to target and position their products to the right target audience through the right channel.

The Future

In the near future, the chemical industry will witness considerable growth with the relentless growth in innovations. Moreover, due to technological advances, the industry at large will also witness a growing demand for organic chemicals in areas such as biotech and fuel cells.


A must-read case study for strategy specialists and decision makers looking to develop a better understanding of the applications of the chemical industry.

IR_RFP


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