Analysis Of Basf Chemical Company Commerce Essay Example

factors at play, including certain laws and regulations in the European Union regarding genetically modified products and specific types of molecules. In addition to this, the company is facing increased competition. Nonetheless, it should be acknowledged that BASF continues to be a leading company with numerous strengths and opportunities.

There are external threats that impact the company, but by leveraging its strengths and mitigating external negative factors, the company can grow its market share and predict a successful future. The following recommendations are suggested. Firstly, the company must prioritize innovation.

This offers BASF the opportunity to surpass its competitors. The company can enhance its growth by focusing on emerging markets such as Asia and the Middle East. Additionally, implementing more standardized and strict regulations for employees across all departments will improve the internal environment of BASF. Moreover, maintaining effective communication between different sections is crucial for the company.

Finally, with further research, the company will have a better understanding of the clients' needs and demands. In conclusion, BASF must do everything possible to create products for a sustainable future. This report was written within the framework of the PLA1-Project Organisation of Business. As part of this project, we worked in a group of students with the aim of analyzing BASF, a chemical company based in Dusseldorf, Germany.

This is how we approached our investigation, worldwide. We explored concepts of primary and secondary research in discussions, which proved helpful in analyzing a company. We then conducted secondary research on BASF's internal structure. Additionally, we interviewed Mrs.

Sengel, a member of the company's Executive Board, prepared a group file containing all of this information. The gathered information was then analyzed, and based

on this analysis, a single study was written. This study is now presented to the following audience, primarily focusing on M.Sc. students.

M.Hajjoubi, who will be graduating from my study, is my primary audience. My secondary audience consists of individuals who work in BASF Company and are interested in reading it. I would like to express my gratitude to the following people. Firstly, I would like to thank my group members - Simon Braun, Muzzeyen Gundoghu, Anna Wolter, Ivet Mladenova, Mo Vania, and Radu. Working together with you as a team was a pleasant and truly valuable experience.

I am deeply grateful to M.Sc. M. Hajjoubi, our PLA1, for his invaluable guidance and patience throughout this project. I sincerely appreciate his support from start to finish. Additionally, I would like to extend a special thank you to Miss C. Jacobs for her dedication and guidance in enhancing our language skills.

Finally, I would like to express my sincere gratitude to Mrs. Sengel for her collaboration during our interview. Without their contribution, this analysis would not have been possible.

Glossary

• Plague Analysis - Political, Economical, Social, and Technological factors that are analyzed
• SWOT Analysis - Strengths, Weaknesses, Opportunities, and Threats analysis
• R&D - Research and Development section

Introduction

To begin with, let's take a macro view of BASF Chemical Company. BASF is a prominent global chemical company that is influenced by various political and economic factors. The production of the company is determined by different laws and regulations.

Moreover, in this nation involved in chemical production, where inventions are gaining momentum, the technological factor has minimal impact. Additionally, the primary objective of the company is to advance chemical science for

a sustainable future. As a result, BASF Company employs various strategic approaches to achieve its goals. This report presents several objectives.

To analyze BASF Company and evaluate its strengths and future opportunities, the main objective of this study is to provide recommendations for the company's success. Additionally, the report also highlights the company's weaknesses and threats, along with advice on improving both its internal and external situations. The following information was gathered for this study.

The collection of information for this report utilized two main research methodologies. The first method was secondary research, which involved conducting an analysis of the micro and macro environment of BASF Company using internet sources. The second method was primary research, which involved conducting an interview with Mrs. Sengel, a member of the Executive Board. The report is organized into chapters, with chapter two providing an overview of BASF Company and its product line.

The text provides an overview of the chapters in the project report. Chapter three explains the description and purpose of the project. In chapter four, the Theoretical Framework is discussed, including McKinsey's seven S model, PEST analysis, and SWOT analysis. Chapters five and six attach PEST analysis and McKinsey's seven S model to the collected information. Specifically, PEST analysis is used to analyze BASF's external environment, while McKinsey's model is used to analyze BASF's internal organization. Finally, chapter seven presents a SWOT analysis based on the collected information.

In chapter eight, decisions are made based on the analyses. In chapter nine, recommendations are provided for the improvement of the company. Chapter 10 critically evaluates this study.

Company description

General Company Information

Here is general information about BASF Company.

BASF is a leading chemical company

that provides chemicals for various industries. The company's production is divided into six sections: Chemicals, Plastics, Performance Products, Functional Solutions, Agricultural Solutions, and Oil & Gas. As an international company, BASF has 70 global and regional business units worldwide. The German section of the company focuses on the production of Performance Products. BASF strives to achieve economic success while fulfilling its social responsibility and promoting environmental protection.

The main objective of BASF is to promote chemical science for a sustainable future. The company's 111,141 employees around the world contribute to achieving these goals. BASF focuses on four main regions: Europe, North America, South America, and Asia. In 2011, the highest sales were achieved in Europe, resulting in an annual turnover of ˆ73.5 billion.

Product Description

BASF in Germany offers a diverse range of products primarily through its Performance Products division. This division encompasses various product lines including Dispersions and Pigments, Care Chemicals, Nutrition and Health, Paper Chemicals, and Performance Chemicals.

The company's product portfolio in this section consists of vitamins and nutrient additives, ingredients for pharmaceuticals and hygiene products, as well as personal care items. Examples include products for hair care, sun and cosmetic care, body care, facial care, and oral care. The company does not directly sell products to the end consumers. Instead, BASF develops and sells molecules, catalysts, and ingredients to other companies that use these items to create products for the final consumers. These items are not the end products themselves; they are intermediate products that are used in other stages of the production process.

Project Description

This section will provide a description of the project.

The text below is aand unified

version of the original text, while keeping the and their contents:

The chapter will be divided into three main sections, which will cover undertaking description, undertaking purpose, and research attack.

Project description

This particular section will explain the details of the project. To begin with, BASF is a prominent player in the global chemical industry. Given the intense competition in this market, the company's future opportunity lies in developing new products.

Secondly, another important aspect in this section is to explore new market opportunities. Furthermore, innovation is crucial in this division. Overall, in order to achieve their goals, BASF must have a comprehensive understanding of their strengths and weaknesses.

Objective of the Project

The main objective of this subsection is to clarify the project's purpose. To accomplish this, information regarding both the external and internal environment of BASF Company was gathered. The aim of this project is to comprehend the company's current situation through McKinsey 7S analysis, PEST and SWOT analysis, and subsequently provide recommendations for BASF's future development based on these findings.

Furthermore, the following text describes the key factors that assess the current state and future opportunities of one organization - BASF, including its strengths, weaknesses, opportunities, and threats.

Research approach: To analyze BASF Company's current situation, two research methods were utilized. The primary research involved conducting an interview with Mrs.

The company's internal analysis involves examining Sengel, a member of the Executive Board. Additionally, the external environment is assessed through secondary research methods, including the McKinsey 7S analysis and PEST analysis. Furthermore, the company's strengths, weaknesses, opportunities, and threats are identified using SWOT analysis.

In conclusion, the gathered information is utilized to provide

the company with recommendations for its future development. Additionally, this chapter aims to present the theoretical model for internal and external analysis.

Theoretical model

Chapter four intends to showcase the theoretical model of internal and external analysis. Therefore, it will illustrate the current situation of the company. Subsequently, sub-chapter 4.1 will delve into the internal analysis, specifically focusing on the McKinsey 7S model.

The text discusses the theoretical model known as McKinsey 7S, which consists of seven elements. These elements are divided into difficult S`s such as Scheme, Structure, and Systems, and soft S`s such as Shared Values, Skills, Staff, and Style. Additionally, the text mentions that in section 4.2 the external PEST analysis will be discussed. This analysis includes Political, Economic, Socio-cultural, and Technological factors that impact the company. Lastly, section 4.3 will provide a SWOT overview of the company.


Internal Analysis

This section focuses on the difficult S`s of McKinsey 7S, which include Strategy - defining the actions and plans of an organization to achieve specific goals.

The company's strategy is influenced by the external environment, leading to the need for adaptation and finding a competitive position among customers and rivals. Additionally, the structure of the organization is depicted by the hierarchy, illustrating the relationships among its employees. This can be observed on the organization chart.

Depending on the business scheme, the globalization of the business, its size, and diversity, the third "S" in the so-called difficult S's refers to Systems. Systems encompass all the procedures that a company utilizes on a daily basis, both internally and externally. Systems are directly linked to the Structure and Strategy of the organization as they outline the primary practices of the company

to achieve its goals (Cuypers 2010, 3-9). The soft "S" in the McKinsey 7S model discussed in this paragraph includes Shared Values, Skills, Staff, and Style.

According to Peters and Waterman (1984), in the 7S analysis, shared Values are the core guiding principles of a company. These Values represent the beliefs and principles that an organization holds. Understanding these shared Values is the simplest way to identify the main ideas and goals of the company. Skills, on the other hand, are the distinctive abilities of the company. They define the capacity and quality of the company in comparison to its competitors.

The erudite capability of staff in the company is crucial, specifically regarding the quality of products and services. These aspects are tied to both the staff and style of the company. Staff pertains to the quantity and type of employees, while it also encompasses the methods employed to manage their careers.

Style is directly dependent on the human resource system that manages how staff is encouraged, wages, and motivated. It represents the main way senior directors run the organization and influences the procedures within the company.

The primary focus of management style is the allocation of time, beliefs, and leadership skills by managers. The size and structure of the organization also play a significant role in determining how various departments are managed (Spencer, 2011).

External analysis

First and foremost, every organization relies on political factors, such as government regulations and legal issues.

The company's construction and regulations are influenced by political factors, which vary based on location. These factors include trade limitations, duties, revenue enhancement policy, and employment laws (Oxford University Press, 2004). Another important factor for all companies is the

economic environment. This includes factors such as income and income distribution, current and projected economic growth, inflation, and interest rates. The economic environment can present both opportunities and threats to a company. Understanding this environment is crucial for the company's development (Oxford University Press, 2004).

Thirdly, societal factors have an influence on the company. These include lifestyle trends and demographic changes, which in turn shape consumer behavior. The primary objective for any company is to comprehend the desires and demands of consumers. When social and cultural changes are apparent, the company can more easily devise strategies and approaches to achieve its objectives (Oxford University Press, 2004). Lastly, in the present day, one of the most crucial factors affecting companies is the technological environment.

This is the most dramatic and the fastest development factor. These are forces that create new engineerings, merchandises and market chances. In the universe of engineering, the company has to be unfastened and fix for new chances ( Oxford University Press, 2004 ) .

SWOT

Harmonizing to Berry, the SWOT analysis is an highly utile tool for understanding and decision-making for all kinds of state of affairss in concern and organisations. SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats ( Berry, 2012 ) .

Strengths refer to the internal capabilities that can help a company achieve its objectives, while weaknesses can hinder its progress. These factors are related to the company's products, pricing, quality, staff, and procedures. Understanding these factors allows the company to identify its unique selling proposition and improve upon it. This knowledge pertains to the internal environment or situation within the company or organization. These determinants

of the company's strengths and weaknesses are relevant in the present (Berry, 2012).

Opportunities and threats are connected to the external environment, which represents the conditions outside of the company or organization. These factors are future-oriented and pertain to market opportunities, trends, seasonality, politics, society, competitors, and other external influences on the company. By understanding these opportunities, the company can exploit external factors to its benefit. Threats, on the other hand, are negative factors that may challenge the company's performance (Berry, 2012).

External analysis

The following chapter provides an explanation of the external environment analysis - Plague. It is divided into four main sections. The first section, sub chapter 5.1, focuses on Political factors that influence the BASF Company. The second section, 5.2, provides an illustration of Economic factors.

Thirdly, chapter 5.3 discusses Social factors. Finally, sub chapter 5.4 examines Technological factors that impact the company.

Political factors

BASF Chemical Company is influenced by various political factors. One such factor is the establishment of a sustainable chemicals industry initiative by the European Union in 2005. This factor has a beneficial impact on BASF as their mission is to create chemicals for a sustainable future. This political factor provides opportunities for the company to collaborate further with the European Union in order to drive innovation.

The company faces a negative political factor in the form of an unfavorable political environment. In the European Union, there are various laws and regulations regarding genetically modified products and certain chemical products. Therefore, the USA is a more favorable market for these types of products (Thomas, 2005).

Economic factors:

One consequence of the ongoing credit crisis is that it has led to a

decrease in customer spending. This is a significant factor that influences BASF Company.

Increased competition and rising energy prices are negatively impacting BASF's stability in the market. Only the top companies with superior products can maintain their position. The chemicals industry is at risk due to the potential damage caused by higher energy costs. Additionally, new economic powers like China pose a further challenge to BASF's competitiveness.

To reduce the impact of these negative factors, BASF Company has the option to target alternative markets including Africa and the Middle East (Thomas, 2005).

Social factors

It is challenging to find new well-educated individuals in the chemical industry. This is due to the fact that young people often opt for other professions in different fields. In order to attract highly educated talents in the chemical sector, it is necessary to offer competitive salaries and favorable working conditions. BASF Company is actively working towards improving these aspects.

Flexible on the job clip is an important determinant of a job and can attract qualified labor (Thomas, 2005).

Technological factors are crucial for BASF Company. Technological inventions allow the company to improve its products and add new ones to its portfolio. The company focuses on solutions for a sustainable future, and inventions play a key role in this. Additionally, global technology platforms are partners in product development (Thomas, 2005).

Internal analysis

McKinsey seven S model

The primary goal for BASF, as the world's leading chemical science company, is to strengthen its position in the market. To achieve this, the company must focus on meeting the needs and demands of its customers. In the chemical industry, where BASF does not directly

sell products to consumers, innovation is crucial. This involves creating new products and functionalized materials, as well as finding new solutions for a more sustainable future. These initiatives are also important for the company's secondary goal of increasing annual profit by an average of four percent and growing two percent faster than global chemical production (Interview, Appendix 1) (BASF, 2012). BASF operates with a Matrix organizational structure, which divides authority by both functional and project areas.

The Board of Executive Directors at BASF is made up of eight members who are responsible for guiding the company. They regularly report to the Supervisory Board, which consists of 12 members. The Supervisory Board is composed of six stockholders' representatives elected at the Annual Meeting and six members appointed by the representative employee structure. Each country and department within BASF has its own head, who is overseen by Kurt Bock, the Chairman of the management board (Interview, Appendix 1) (BASF, 2012).

The company's systems are crucial for the business and for achieving high-quality work. BASF has its own marketing department in each country where the company operates. Additionally, they have external marketing agencies that support them in developing the strategies and the way BASF wants to present itself to customers. As a chemicals company, BASF exclusively utilizes specialized media for advertising, such as home care magazines or euro-decorative magazine, which cater specifically to the cosmetic market.

To be successful, a large company like BASF requires fixed regulations and good communication between different sections. Manager's meetings are the primary method used within the company to discuss the challenges and market developments. Due to the complex structure of the company, daily meetings with

the leaders are necessary, even more than in other companies (Interview, Appendix 1) (BASF, 2012). One of BASF's goals is to make regulations and systems more standardized across different countries.

The leader's manner within the company allows employees to share their thoughts on inventions. Every thought on an issue that is placed by some of the employees is considered, but the final decision is always taken by The Supervisory Board. At the same time, the management style is people oriented. One of the most important things for the company is to understand consumer demands and create value for them (Interview, Appendix 1) (BASF, 2012). BASF is a company with approximately 200,000 employees.

BASF in Germany employs 54,000 workers who work in various departments. Each department has its own director responsible for monitoring the work. There are shared models and guidelines provided by the central section that apply to all employees. Compliance with these rules is mandatory. The Human Resource Department determines salaries and issues warnings within the company.

Within the company, there is nothing special; they follow the legal system. Each employee has a set of goals called "employee dialogue." This allows for open communication in the company, with employees sharing their achievements and new ideas. The company's incentive system is connected to rewards, such as monetary bonuses for a job well done (Interview, Appendix 1) (BASF, 2012).

BASF Company recognizes the significance of enhancing its products to be superior, healthier, and safer compared to its competitors. This is crucial because the ultimate consumer is not able to physically perceive or comprehend the superiority of BASF Company in contrast to its rivals. The company prioritizes innovations as they are

the sole means through which the company can stand out and distinguish itself from competitors. Each year, the company invests a substantial amount of money in research to uncover new opportunities for development. Meanwhile, the company also strives to ensure that its already developed products are successful in the market.

The primary concern for BASF is to gain a better understanding of consumer demand compared to competitors and be prepared to meet these demands promptly (Interview, Appendix 1) (BASF, 2012). BASF's core value is to develop chemistry for a sustainable future. In order to achieve its objectives, BASF aims to be an innovative company with cutting-edge products, intelligent problem-solving solutions, and excellent service departments. The company aims to become the leading global supplier in the chemical industry and generate high returns on its assets.

The Interconnection of the Seven S is a goal of BASF, as stated in the Interview and Appendix 1 (BASF, 2012). BASF, as a leading global chemical company, prioritizes strengthening its market position. To achieve this, it focuses on improving its products and providing high-quality services compared to its competitors. The Matrix organizational structure and people-oriented management style of BASF play a significant role in understanding customer needs and meeting them efficiently.

The company is focused on innovation and all decisions regarding new ideas are made by The Supervisory Board. Good communication between different departments and adherence to established rules are crucial for the company's success. BASF achieves this through regular meetings of The Board of Executive Directors. The company aims to become the leading supplier in the chemical industry worldwide and maximize its asset returns. Achieving these goals requires hiring highly qualified employees.

Moreover,

the company places great emphasis on its leadership system in order to encourage employees to share their innovative ideas. To achieve this, the company utilizes a process known as "Employee dialogue". Additionally, the company invests resources into research. The Research and Development (R) department is responsible for identifying new market opportunities for BASF.

The main objective of BASF is to produce chemicals for a sustainable future. To achieve this goal, a good administrative structure and cooperation between departments are crucial. Additionally, the management of employees and fostering innovation are also important factors for the company. All of these elements determine the current situation of the company and its future position and development in the market.

SWOT overview

Firstly, BASF Company is one of the leading chemical companies in the world.

BASF, being a large and international company, has the advantage of dominating a significant portion of the market and exerting influence over smaller chemical companies. Its extensive global presence enables it to have numerous production sites. One notable strength of the company is its Verbund sites, which have excellent resources for production. This integration allows for the efficient utilization of all products created within the company. Raw materials produced in one division can be utilized in another, allowing BASF to produce its own materials for its production.

In addition, this enables the company to produce a variety of materials and products, innovate in this industry, and provide more value to customers compared to competitors (YouSigma 2011). Secondly, BASF Company achieved significant profits last year. However, in recent years, decreasing profits have been observed in various business segments, which is considered one of the company's weaknesses. There are multiple reasons behind

this situation.

One of the main challenges faced by companies in the European Union is the economic lag caused by a recognition crisis. This crisis affects both small and large companies such as BASF. Additionally, the European Union offers consumers a wide variety of products, leading to strong competition in the market and a highly developed market in Europe.

One opportunity for the company is to expand its presence in the emerging chemical markets of Africa, Asia Pacific, and the Middle East. These regions are experiencing rapid growth in various industries, as the future profit potential in European countries is not as high. Another opportunity for the company is to continually innovate and develop new products and ideas (YouSigma 2011).

Decision

BASF is a globally recognized leader in the chemical market.

The company's production is divided into six sections and its market is focused on four main parts. The German section of the company specializes in producing Performance goods, specifically products for personal care. Additionally, the company's main goal is to maintain its position in the market and create sustainable products for the future. To assess the current situation of the company, information was gathered and an analysis of both the internal and external environment of BASF Company was conducted.

This study examined BASF Company using the McKinsey 7 S theoretical model to analyze the internal environment. The strengths, weaknesses, opportunities, and threats of BASF were assessed through a SWOT analysis. The analysis revealed that BASF has a well-implemented Matrix Structure and effective management style. However, managing a global company like BASF is challenging and requires strict rules and frameworks for employees.

On the other hand, BASF also manufactures intermediates that are

utilized by other companies in various industries to produce final products. Consequently, the ultimate consumers are not always aware of the quality of BASF's products. This is primarily because the company prioritizes innovation, which is one of its most crucial objectives. Undeniably, innovation and development constitute the main mission of the company.

Quality R and the selling section assist in this mission. The conglobation of the differ.