Degussa Stabilizers: Accessing the Chinese Market

Degussa, one of the top 10 chemical companies and the largest specialty chemical company in the world, started operations in China in January 2003. According to one of the key tenets of the Degussa 2008 Program (“Make China Happen”), the company would need to significantly increase sales in China by 2008, with a focus on Degussa Stabilizers (a division of Degussa that began 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 decided to minimize the production costs and improve customer services. This case challenges students to analyze and evaluate the company’s position. Based on their findings from the case, students are required to make recommendations that will help the company adapt to the rapid market changes and increased competition.