Apex Chemical Company Case

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Apex Chemical Company Case Apex has to decide which of the two new compounds (electrolysis agent A-115 or plastic oxidizer B-227) the company should market. Based on the information gathered during a confidential discussion with the President of Apex and during a conversation which took place among Apex’ Executive Committee, I recommend the launching of B-227. This decision takes into account the results of analysis of market size and trend, market knowledge and share, value proposition, communication cost and forecasted revenue for each of the two compounds. Market size and trends The electrolysis agent market is $10 million a year, with at least 95% occupied by Hamfield (in blue in the graph below) and the rest (in pink) occupied by other small competitors. The market is stable and the customers are satisfied with Hamfield product; consequently it is expected that the next year market share will look the same as this year. It will be difficult for Apex, which has no previous experience in this market, to gain shares from Hamfield. The best they can expect, if entering the electrolysis agent market, will be to gain the 5% of the market which doesn’t belong to Hamfield. On the other side, there is a lot of potential in the $40 million a year plastic oxidizer market, which is split into 2 segments: the beta-prednigones and the stigones. This market is expanding1 and, in the same time, clients are switching from stigones (which declines with 10% annually) to betas. As can be seen from the table below, betas market is expected to increase with $3.6 million next year. Compound B-227 is part of the beta group. There is a lot more room on the betas oxidizer market ($3.6 M only in new market) compared with the electrolysis agent market (potential of $0.5 M), therefore Apex should market B-227. 1 for calculations, I considered a growth rate of 5% annually for the
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