ENTR6200 - Enterprise Growth & Innovation SEC 06 - Fall
2016
Week 2 Assignment: Case Study- Apex Chemical Case
By Verander Chawdary
ENTR6200 - Enterprise Growth & Innovation SEC
06 - Fall 2016
Week 2 Assignment: Case Study- Apex
Chemical Case
Analysis and Recommendation
Based on the analysis as outlined below using 5C Framework, I would recommend Apex to
commercialize the compound B-227.
Under Step-1, it will be analyzed to understand the Apexs corporate growth strategy- Does it
only involve new products? Does it involve growing an existing platform or business model
innovation? Does it involve market creation or market fulfillment?
It can be seen from the case that Apex does not normally make the products just to bring in a
market to gain popularity rather they follow application innovation. In this instance it can be seen
that market for Stignones (existing product) is declining though market for plastic oxidizers is
growing. So in Apexs best interest it makes sense to adopt this new product (B-227) and
abandon their current growth strategy. It can be seen as growing an existing platform by
introducing a more desirable product.
Under Step-2, it will be analyzed to understand the product lifecycle Is it in the introduction,
growth, maturity or decline stage?
It is clear from the case that the lifecycles of Stignone is in the declining stage though the
market for beta version of the plastic oxidizer is growing with higher margins, and there is more
potential revenue ( $40m at 25% market share = $10 m) . Whereas the compound A-115 market
is stable at $10m (100 % market share). It will be difficult to capture 100% market share for new
product (A-115, a new electrolysis agent) in the new market. Therefore by using platform
innovation, Apex can regain a competitive edge and capture some of the 10% annual decline in
Stignone sales by replacing them with beta sales.
Under Step-3, unmet customer needs including both current and future needs will be identified.
As it can be seen that current technology in case for A-115 does the job and meet the customer
need, and the market is stable. A breakthrough technology is not demanded by consumers,
there is big risk in introducing the new product (A-115) and acceptance by customers may be
questionable as their need is already being met by existing product. Whereas the customer
demand has shifted toward compound B-225, so there is opportunity for Apex to gain market
ENTR6200 - Enterprise Growth & Innovation SEC
06 - Fall 2016
Week 2 Assignment: Case Study- Apex
Chemical Case
share for B-225. Apex also have the reputation for producing a superior product. Whereas Apex
is unknown for product A-115 in the market.
Under Step-4, competitive behavior including competitors strengths and weaknesses; and their
existing competitive strategies will be analyzed. There is a monopolistic market for compound A115, mainly dominated by one reputable provider (Hamfield), holding 95% market share. There
will be strong barrier to enter in this market, and Apex is not well recognized brand in the
electrolysis arena. Whereas the plastic oxidizer market is more of an oligopoly, but Apex has a
strong reputation in the plastic oxidizer market. It will be also easy for Apex to manufacture the
compound B-227 as they already have tools and equipments to make similar type of oxidizer. It
can be guaranteed a better success in with the B-227 compound as Apex has a leg up on its
competition and is a recognized brand leader.
Under Step-5, it will be determined what Apex is great at and also what it could be great at. It
can be seen from the case that Apex is great at manufacturing the Stignone. There is no doubt
why Apex will not be equally successful with the beta version. There is also the fact that there
will be little investment in training the people in producing , how to make the product, and little
training needed in sales & marketing of the product B-227 compare to A-115.
Based on above analysis using the 5C Framework, I would recommend Apex to commercialize
product B-227 which will enhance the bottom line for the Company. There would be substantially
more risk involved in investing in the compound A-115.
References:
1) Meyer, Marc H. The Fast Path to Corporate Growth. Oxford University Press, 2007.
2) Meyer, Marc, and Frederick Crane G. Innovation: The Workbook. Boston, MA: Institute
for Enterprise Growth, 2016. Print.
3) Week 2 Course materials, blackboard
ENTR6200 - Enterprise Growth & Innovation SEC
06 - Fall 2016
Week 2 Assignment: Case Study- Apex
Chemical Case
