Celanese

Table of Content

1. Introduction

2. Task A - Analysis Celanese AG (CE)

Competitive Force Model вЂ" Porters Five Forces

Value Chain Model

Celanese centralised enterprise system to its business strategy

Business Value

3. Task B - Systems Development Methodologies

4. Task C

5. Bibliography

1. Introduction

Celanese AG is a global producer of value-added industrial chemicals. They are one of the leaders in their product areas; Celanese has the leading position in producing acetyl products and engineered polymers. Their products are manufactured in North America, Europe and Asia. In 2006 Celanese’s net sales went up from 1,471 million USD to 1,573 million USD while their operating profit decreased by 15 percent from 172 million USD to 147 million USD which is due to an overall increase in many other charges and also a loss in sales which is related to AT Plastics Films Business.

2. Task A - Analysis Celanese AG (CE)

Competitive Forces Model вЂ" Porters Five Forces

I. Rivalry

Celanese’s traditional competitors include BASF, Methanax, Lanxess and other companies in the chemical industry. All of the competitors offer a similar range of products and services in the almost identical market. The �older’ competitors mostly have an excellent intuition for the market and have a good customer base.

In this situation the rivalry is very intense, because the companies are driven by the industry conditions in terms of price cuts and also raising the prices. For example: The Vice president of Celanese Emulsion announced on 21st of November that they are going to raise the prices on Emulsion Products in North America by 5 cent per wet pound which is due to an increase of the prices of raw materials, feedstock’s, transportation and energy costs.

The exit barriers are very high вЂ" they are still the primary barriers to make profit. The companies who want to shut down and write off there assets can’t, because of ecological issues.

II. Threat of Substitutes

The threat of substitute’s products is most powerful where there are alternatives for a company’s product. The demand of special products can be changed by different factors, e.g. environmental, costs, licensing. The competition within this market is limited as there are not very many players with high quality products. There are important threats coming from the Middle Eastern and Pacific region which is going to amplify the rivalry.

III. Bargaining Power of Suppliers

Suppliers could be a danger for the industry if they threaten the companies to increase the prices for products and services. Therefore suppliers could reduce the profitability of an industry, because the increase of the prices couldn’t be moved over to the markets. The bargaining of the supplier in the chemical industry and therefore for Celanese give the impressions to be moderate because they are concentrated.

IV. Bargaining Power of Customers

The Customers have the power to cut the prices or request better quality or force better services which all has a loss in profitability of the industry as a result. The power of the customer base depends on the criteria of the market situation and the importance of the business in comparison to the complete situation. The bargaining power of the customers seems to be low. The movement of the industry is uneven which reduces the shared bargaining power. More capacity is coming from the Middle Eastern countries вЂ" it is possible that the bargaining power of the customers might recover to a higher amount.

V. Barriers to Entry

The barriers of entry for new competitors are very high as the rules and regulations that they have to fulfil are very extensive. For example: in the European Union exist a law since the end of 2006 called REACH (registration, evaluation and authorisation of chemicals). The capital requirements are high; therefore it needs a lot of investment to open a new business in the chemical industry. High barriers of entry make markets not challengeable and protect current firms from possible new entrants.

Celanese has to develop new strategies to overcome new competitors in the chemical industry. The new entrants will try to battle in the areas where the barriers of entry are very low.

The chemical industry is getting more and more instable. The different technological developments and political and environmental differences as well as globalization and fulfilments open up and are a threat at the same time.

Value Chain Model

With help of the following value chain I analysed the activities of the company. It connects the company analyses and the strategy development вЂ" we can also see the strengths and weaknesses of the company which we can use to moderate a corporative strategy for the company profile.

I. Firm Infrastructure

Celanese’s values are productivity, efficiency and being result orientated. To achieve those goals Celanese is not doing much routine adminstrative work anymore вЂ" they did outsource those tasks to support the strategic work of the employees. This also increases the motivation of the employees and helps them being more efficient.

II. HRM

Celanese provides different career opportunities; the offer challenging tasks, trainings, global outreach and individual career opportunities. They also do regular performance interviews to keep track of the development of the employee. In these interviews the strengths and weaknesses