Development of a strategy for expanding Plastexpert-dmcc's presence in the global raw materials market
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Statement on the substantive character of the diploma thesis preparation 2
Table of contents 3
Introduction 5
Chapter 1. Company description and external markets analysis 7
1.1 Description of the company 7
1.2 Description of the company’s project, it’s financial restructuring, problem identification and statement 8
1.3 Market selection 12
1.4 General PESTEL analysis 12
1.41 Political factors 14
1.42 Economic factors 15
1.43 Social factors 16
1.44 Technological factors 16
1.45 Environmental factors 17
1.46 Legal factors 18
1.5 China 19
1.51 PESTEL analysis 19
1.52 PORTER analysis 24
1.53 Stakeholders analysis 26
1.54 Competitive positioning 27
1.55 EFE 29
1.56 Conclusion 29
1.6 India 30
1.61 PESTEL analysis 30
1.62 PORTER analysis 34
1.63 Stakeholders analysis 35
1.64 Competitive positioning 37
1.65 EFE 38
1.66 Conclusion 38
1.7 Malaysia 39
1.71 PESTEL analysis 39
1.72 PORTER analysis 42
1.73 Stakeholders analysis 44
1.74 Competitive positioning 45
1.75 EFE 46
1.76 Conclusion 47
Chapter 2. Internal analysis 47
2.1 VRIO analysis 47
2.2 Benchmarking 49
2.3 IFE matrix 50
Chapter 3. Proposed strategy 51
3.1 Matching SWOT-analysis 51
3.11 S1S2S3S4S5O13W2 52
3.12 S1S4W3W4O21O23T21T23 52
3.13 S1S2S4S5W2O35O34T32 52
3.2 Strategy choice, chosen strategy details and financial indicators 53
3.21 Choice of a strategy 53
3.22 Chosen strategy details and financial indicators 54
Conclusion 55
References 56
Appendix 59
Table of contents 3
Introduction 5
Chapter 1. Company description and external markets analysis 7
1.1 Description of the company 7
1.2 Description of the company’s project, it’s financial restructuring, problem identification and statement 8
1.3 Market selection 12
1.4 General PESTEL analysis 12
1.41 Political factors 14
1.42 Economic factors 15
1.43 Social factors 16
1.44 Technological factors 16
1.45 Environmental factors 17
1.46 Legal factors 18
1.5 China 19
1.51 PESTEL analysis 19
1.52 PORTER analysis 24
1.53 Stakeholders analysis 26
1.54 Competitive positioning 27
1.55 EFE 29
1.56 Conclusion 29
1.6 India 30
1.61 PESTEL analysis 30
1.62 PORTER analysis 34
1.63 Stakeholders analysis 35
1.64 Competitive positioning 37
1.65 EFE 38
1.66 Conclusion 38
1.7 Malaysia 39
1.71 PESTEL analysis 39
1.72 PORTER analysis 42
1.73 Stakeholders analysis 44
1.74 Competitive positioning 45
1.75 EFE 46
1.76 Conclusion 47
Chapter 2. Internal analysis 47
2.1 VRIO analysis 47
2.2 Benchmarking 49
2.3 IFE matrix 50
Chapter 3. Proposed strategy 51
3.1 Matching SWOT-analysis 51
3.11 S1S2S3S4S5O13W2 52
3.12 S1S4W3W4O21O23T21T23 52
3.13 S1S2S4S5W2O35O34T32 52
3.2 Strategy choice, chosen strategy details and financial indicators 53
3.21 Choice of a strategy 53
3.22 Chosen strategy details and financial indicators 54
Conclusion 55
References 56
Appendix 59
In modern day, developing international business may be an extreme challenge due to various trade restrictions, evolving international markets for raw materials and unstable political relations between the countries.
In the ever-evolving global business landscape, companies face the challenge of expanding their operations into international markets to capitalize on new opportunities and achieve sustainable growth.
International commodities trading is a large multi-million dollar industry, involving intermediates (traders), producers (manufacturers), users (processors), freight-forwarders (logistics experts) and banks (issuing LC’s, completing transactions).
Global market for raw materials represents a fundamental part of the global economy, providing resources for various industries such as energy, metallurgy, agriculture and chemical industry. Generally, all industries involving manufacturing of any kind at some point have to enter the market of raw materials and participate in raw materials trade.
Commodity prices are often subject to significant fluctuations due to a variety of factors, including global supply and demand, political instability in producing regions, natural disasters, and changes in the economic policies of exporting and importing countries. Geopolitical influences on the market are also significant as raw materials are often concentrated in a limited number of regions, making their extraction and trade dependent on political stability and international relations. Economic cycles play an important role in shaping demand for raw materials: during periods of economic upturn, there is an increase in demand for materials for manufacturing and construction, whereas during periods of recession, demand decreases.
This market is generally characterized by high price volatility, dependence on the geopolitical situation and global economic conditions, and significant influence from technological innovations and environmental regulations.Today, global raw materials markets face a number of significant changes and challenges. Developing countries such as China and India continue to show high demand for raw materials to sustain their economic growth and development. Infrastructure rehabilitation and development in various regions of the world is increasing the demand for construction materials and metals and an increase in global population drives demand for commodities in agricultural sector.
In addition to its core focus on raw materials trade, Plastexpert wants to introduce multiple new directions of business, including financial consulting and AI research. With the help of multinational and highly-qualified staff current geopolitical situation does not put a stop on organization’s activity, however, some legal restrictions in funds transfers between companies are present. These topics will be further researched in master’s thesis.
Goal:Development of strategy for expanding Plastexpert-dmcc's presence in the global raw materials market.
Object: International commodities trading company “Plastexpert-DMCC”.
Subject: Strategy for expanding Plastexpert-dmcc’s presence in the raw materials market.
Objectives:
1) To provide information about the company
2) To provide information about current project in sulfur granular
3) In collaboration with Plastexpert-dmcc’s management restructure the budget of the company allocating resources for new strategy creation
4) To identify and state the managerial problem
5) To conduct external market analysis for China, India and Malaysia, implementing PESTEL, Porters 5 forces, stakeholders analysis, as well as competitive positioning and EFE matrix and state the results.
6) To conduct internal analysis utilizing VRIO analysis, benchmarking, IFE matrix, and state the results.
7) To conduct matching SWOT analysis.
8) To formulate possible strategies for expanding Plastexpert-dmcc's presence in the global raw materials market.
9) To choose a strategy for expanding Plastexpert-dmcc's presence in the global raw materials market and formulate recommendations on its implementation.
10) Show financial indicators of the strategy.
Both primary and secondary data sources will be utilized for this research. Primary data will be gathered through interviews and interactions with key figures within Plastexpert-dmcc, it’s rivals within the industry of international raw materials trade, suppliers and customers, both active and potential, while secondary data will include industry reports, market research studies, and relevant statistical data.During the writing of this paper, the help of a professional online translator “DeepL” was utilized. All relevant contacts, links and resources from which the data was gathered will be provided below in the “References” section.
Information about the organization, about the products, as well as markets were assembled via multiple personal meetings and phone calls with company’s logistics expert Artyom, and COO Grigory. By the end of the preparation period the time spent in the company, gaining information about markets, products, competitors and providing solutions for the following case rounded up to around 250hours, not including phone calls. Their contact information will be provided at the “references” section, as well as contacts from other companies contacted within this research.
This paper aims to provide valuable insights and practical recommendations for Plastexpert-dmcc to expand it’s presence on the global raw materials market. Through the analysis and recommendations presented, it is anticipated that this paper will contribute to organization’s growth and development. This diploma thesis is utilizing the research, data and conclusions from 3d year course work on the topic of “Entrance of Chinese market by “Polymer SM”.
In the ever-evolving global business landscape, companies face the challenge of expanding their operations into international markets to capitalize on new opportunities and achieve sustainable growth.
International commodities trading is a large multi-million dollar industry, involving intermediates (traders), producers (manufacturers), users (processors), freight-forwarders (logistics experts) and banks (issuing LC’s, completing transactions).
Global market for raw materials represents a fundamental part of the global economy, providing resources for various industries such as energy, metallurgy, agriculture and chemical industry. Generally, all industries involving manufacturing of any kind at some point have to enter the market of raw materials and participate in raw materials trade.
Commodity prices are often subject to significant fluctuations due to a variety of factors, including global supply and demand, political instability in producing regions, natural disasters, and changes in the economic policies of exporting and importing countries. Geopolitical influences on the market are also significant as raw materials are often concentrated in a limited number of regions, making their extraction and trade dependent on political stability and international relations. Economic cycles play an important role in shaping demand for raw materials: during periods of economic upturn, there is an increase in demand for materials for manufacturing and construction, whereas during periods of recession, demand decreases.
This market is generally characterized by high price volatility, dependence on the geopolitical situation and global economic conditions, and significant influence from technological innovations and environmental regulations.Today, global raw materials markets face a number of significant changes and challenges. Developing countries such as China and India continue to show high demand for raw materials to sustain their economic growth and development. Infrastructure rehabilitation and development in various regions of the world is increasing the demand for construction materials and metals and an increase in global population drives demand for commodities in agricultural sector.
In addition to its core focus on raw materials trade, Plastexpert wants to introduce multiple new directions of business, including financial consulting and AI research. With the help of multinational and highly-qualified staff current geopolitical situation does not put a stop on organization’s activity, however, some legal restrictions in funds transfers between companies are present. These topics will be further researched in master’s thesis.
Goal:Development of strategy for expanding Plastexpert-dmcc's presence in the global raw materials market.
Object: International commodities trading company “Plastexpert-DMCC”.
Subject: Strategy for expanding Plastexpert-dmcc’s presence in the raw materials market.
Objectives:
1) To provide information about the company
2) To provide information about current project in sulfur granular
3) In collaboration with Plastexpert-dmcc’s management restructure the budget of the company allocating resources for new strategy creation
4) To identify and state the managerial problem
5) To conduct external market analysis for China, India and Malaysia, implementing PESTEL, Porters 5 forces, stakeholders analysis, as well as competitive positioning and EFE matrix and state the results.
6) To conduct internal analysis utilizing VRIO analysis, benchmarking, IFE matrix, and state the results.
7) To conduct matching SWOT analysis.
8) To formulate possible strategies for expanding Plastexpert-dmcc's presence in the global raw materials market.
9) To choose a strategy for expanding Plastexpert-dmcc's presence in the global raw materials market and formulate recommendations on its implementation.
10) Show financial indicators of the strategy.
Both primary and secondary data sources will be utilized for this research. Primary data will be gathered through interviews and interactions with key figures within Plastexpert-dmcc, it’s rivals within the industry of international raw materials trade, suppliers and customers, both active and potential, while secondary data will include industry reports, market research studies, and relevant statistical data.During the writing of this paper, the help of a professional online translator “DeepL” was utilized. All relevant contacts, links and resources from which the data was gathered will be provided below in the “References” section.
Information about the organization, about the products, as well as markets were assembled via multiple personal meetings and phone calls with company’s logistics expert Artyom, and COO Grigory. By the end of the preparation period the time spent in the company, gaining information about markets, products, competitors and providing solutions for the following case rounded up to around 250hours, not including phone calls. Their contact information will be provided at the “references” section, as well as contacts from other companies contacted within this research.
This paper aims to provide valuable insights and practical recommendations for Plastexpert-dmcc to expand it’s presence on the global raw materials market. Through the analysis and recommendations presented, it is anticipated that this paper will contribute to organization’s growth and development. This diploma thesis is utilizing the research, data and conclusions from 3d year course work on the topic of “Entrance of Chinese market by “Polymer SM”.
Having studied international commodities trading market, both secondary and primary data, quantitative and qualitative information we managed to conduct an in-depth research of the industry within the limitations set by Plastexpert-dmcc’s management. After in-depth analysis of external environment of Plastexpert-dmcc – markets of China, India and Malaysia, utilizing such tools as PESTEL analysis, Porter’s five forces analysis, Stakeholders analysis, competitive positioning and EFE,internal environment analysis utilizing VRIO analysis, benchmarking and IFE compiling 3 possible strategies involving all 3 markets and comparing them we have successfully provided practical recommendations, a strategy for expanding Plastexpert-dmcc's presence in the global raw materials market and calculated financial indicators of it.
In Chapter 1 we have described the company, it’s project in sulfur granular and have restructured it in order to allocate a budget for a new strategy for expanding company’s presence in the global raw materials market. External analysis has also been conducted in this chapter, showcasing external factors affecting commodities trade, advantages and disadvantages of each market, their unique aspects. All three markets were considered when further formulating strategies as all of them had presented some opportunities, however, at this point already Chinese market for commodities stood out as the most appealing for Plastexpert-dmcc.
Chapter 2 focused on analyzing factors within Plastexpert using VRIO analysis, assessing them and comparing to company’s competitors in the markets of China, India and Malaysia via benchmarking and subsequently evaluating them via IFE.
Chapter 3 combined the results of previous internal and external environment analysis beginning with a matching SWOT analysis that highlighted strengths and weaknesses that came from chapter 2 and opportunities and threats that were results of chapter 1. Next – three possible strategies were developed and assessed, resulting in a strategy for expanding Plastexpert-dmcc's presence in the global raw materials market. It’s possible and real financial indicators were calculated and presented afterwards.
As a result of this paper, a strategy for expanding Plastexpert-dmcc's presence in the global raw materials market was successfully developed, approved and is currently in progress. This strategy involves direct exporting of urea granular, purchased at TCE to the final consumer of it in China, shipped on CFR terms to port Ningbo and allows short-term profitability for Plastexpert-dmcc.
In Chapter 1 we have described the company, it’s project in sulfur granular and have restructured it in order to allocate a budget for a new strategy for expanding company’s presence in the global raw materials market. External analysis has also been conducted in this chapter, showcasing external factors affecting commodities trade, advantages and disadvantages of each market, their unique aspects. All three markets were considered when further formulating strategies as all of them had presented some opportunities, however, at this point already Chinese market for commodities stood out as the most appealing for Plastexpert-dmcc.
Chapter 2 focused on analyzing factors within Plastexpert using VRIO analysis, assessing them and comparing to company’s competitors in the markets of China, India and Malaysia via benchmarking and subsequently evaluating them via IFE.
Chapter 3 combined the results of previous internal and external environment analysis beginning with a matching SWOT analysis that highlighted strengths and weaknesses that came from chapter 2 and opportunities and threats that were results of chapter 1. Next – three possible strategies were developed and assessed, resulting in a strategy for expanding Plastexpert-dmcc's presence in the global raw materials market. It’s possible and real financial indicators were calculated and presented afterwards.
As a result of this paper, a strategy for expanding Plastexpert-dmcc's presence in the global raw materials market was successfully developed, approved and is currently in progress. This strategy involves direct exporting of urea granular, purchased at TCE to the final consumer of it in China, shipped on CFR terms to port Ningbo and allows short-term profitability for Plastexpert-dmcc.
