Chemical companies can explore new ways of working—and build the resilience needed in a changing world.

 In chemical industry

Chemical companies can explore new ways of working—and build the resilience needed in a changing world.

Build More Resilient Business Models Technology and connectivity are making new business models possible—and the changing reality reflected in the five megatrends is making them necessary. To meet the growing demand for innovation, efficiency, and delivering outcomes, chemical companies can explore new ways of working—and build the resilience needed in a changing world.

Today, activist investors already are pressuring chemical companies to re-think their business models—witness the moves made by Dow, DuPont, Ashland and Air Products. But as they weigh those pressures, executives should look farther ahead.

With shareholder activism a reality in the industry, companies can build on that energy to propel more strategic change—to allocate cash to new business capabilities, new technologies and new ways of serving customers. Taking a longer view of the business-model question can help companies develop models that build on their core strengths, rather than trying to be “all things to all people” through various businesses. And it can help companies focus their acquisition efforts on the right targets, defend against activist investors and boards, and achieve strong market positions.

To support new business models, chemical companies can broaden acquisition strategies to include peripheral and niche companies that have unique technologies, services or sales channels. This will mean having to assimilate and integrate unfamiliar business model frameworks into the company.

In addition, by forming partnerships with companies outside of the industry, chemical companies will be better equipped to compete by bringing stronger marketing and customer-relationship expertise to the table. With such partnerships, companies can work with a broad ecosystem of partners to deliver outcomes to customers.

More and more companies are leveraging information technology to enable new business models. With the emergence of industry technology platforms, partners can easily create connections with one another. These platforms are already having an impact.

In Lacreme’s cross-industry research, 39 percent of surveyed executives said they are using industry platforms to integrate data and applications with digital business partners; 35 percent said they are experimenting with such platforms. In addition, eight out of 10 executives believe that such platforms will dramatically blur traditional industry boundaries in the coming years

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