Apex Chemical - Case Study

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APEX CHEMICAL – CASE STUDY Given the limited information in the case, I recommend Apex to commercialize Compound B-227. The recommendation is based on using a business model that would be the framework for making money. By definition from our lesson in week two the business model is the set of activities which a firm performs, how it performs them, and when it performs them so as to create customer value and earn a profit. The 5C Framework also helped identify what the corporate growth strategy boundaries would be, understanding the lifecycle, identifying the unmet needs of the customer, understanding the competitive behavior, and understanding the company capabilities. My recommendation for Apex to commercialize B-227 was made even though Apex is not currently in the beta market but still has a strong presence in the plastic oxidizer market based on stigones sales. Compared to A-115, Apex has no presence in the electrolysis agent market which is primarily dominated by Hamfield. It would be very difficult for Apex to compete in this segment as the customer survey Apex performed confirmed that most of Hamfield’s customers were satisfied with the product they were using. Also, when comparing the plastic oxidizer market versus the electrolysis agent, there is much more potential for market growth in the plastic oxidizer market ($40 million and growing versus $10 million and stable). With Apex already a known player in the stigones market, jumping in the Beta market would be a product line extension for Apex, and would enter the Beta segment with a market advantage. The advantages associated with line-extension innovation include market saturation, marginal increases in cost, and leveraging the present distribution and marketing channels to launch this product. This recommendation would most likely be the lowest cost method to innovate the product line and be
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