Degussa Stabilizers: Accessing the Chinese Market

This case was developed by Professor Per V. Jenster and Cissy Chen of the China Europe International Business School with the helpful collaboration of Degussa (China), Co., Ltd. and the CEIBS MBA Group Consulting Team of Ben Liu, Cindy Sun, Daisy Xu, Herwin Bintoroe, Thomas Yu, and William Xu. Degussa, one of the top 10 chemical companies and the largest specialty chemical company in the world, started its operations in China in January 2003. According to one of the key tenets of the Degussa 2008 Program — Make China Happen — the company will significantly need to increase its sales in China by 2008, with focus on Degussa Stabilizers (a division of Degussa which began its operations in China in 2004). In 2005, Degussa Stabilizers held a market share of about 10 percent (in terms of value). Despite positive results, it could not meet the required growth rate and market share projected by the company. Therefore, in order to strengthen its position in the market, the management team of Degussa Stabilizers decided to minimize the production cost and improve customer services. This case challenges students to analyze and evaluate the company's position. Based on the findings from the case study, the students are required to make recommendations that will help Degussa China to adapt to the rapid market changes and increased competition.