WWRC Shanghai: The Threat to the Middleman

In China, many companies acted as intermediaries or “middlemen” in distributing and promoting products imported from international producers to the geographically dispersed Chinese customers. Worldwide Resins and Chemicals (WWRC) Shanghai was a leading specialty chemicals distributor in East China that connected local customers with producers of specialty chemicals outside China. It performed well between1997 and 2006 due to its prudence in selecting and executing the right business strategies. With changing market dynamics, the company faced challenges in terms of a sluggish market for construction material industries as well as slowdowns in the ink and plastic industries, fierce competition from local producers, and demanding customers. Although the company’s performance in terms of revenue, profit and productivity was strong, Wang Huitao, the key founder of the company, was aware of his company’s limited growth in the current industries, and knew that the company would not sustain its profitability if strategic changes were not introduced. Wang listed four possible options —new business, own brand, new application and new products — to help the company combat changes in the Chinese market. This case challenges students to analyze and evaluate the options that Wang presented. Students are required to make recommendations that will help the company adapt to rapid external changes.