BBC Chemical Company Goes Global* Driven by competitive pressures, and the attractiveness of the industry fastest growing market in the world, a U. S. -based chemical manufacturer, BBC Chemical Company (name changed to maintain confidentiality) considered expansion into Asia, specifically, China. William Smith is the International Marketing manager for BBC Chemical Company.
William has been tasked with expanding Abs's manufacturing and distribution to the Asia Pacific region. Many changes in the powder coating industry have forced BBC to reconsider its their global strategy.To date, they have exclusively manufactured and exported from the Americas. Higher costs and tougher competition have forced BBC to look to the Asia Pacific Region to reduce these costs (specifically shipping) and remain competitive.
BBC Chemical Company is a U. S. - based business that manufactures and distributes specialty chemicals to various industries for use in manufacturing finished products. BBC Chemical Company's powder coating division needs to expand into Asia to remain competitive.
Many of the powder coating division's customers are moving their plants to Asia in an attempt to expand their markets and lower their production costs.As well, all of BBC Chemical Company's competitors are opening production facilities in Asia to meet their customer's needs, to expand their markets and lower their costs. For Asian and some European manufactures, powder coatings are a commodity with no specific qualities or competitive advantages to differentiate one from another. BBC Chemical Company believes that in the future, many of these manufacturers will need more specialized products moving away from a commodity. Gaining a foothold in Asia at this time is critical to BBC Chemical Company's future.
As a commodity, powder coatings are purchased strictly based on price.Shipping costs to Asia have raised prices to a point where BBC Chemical Company would tithe 'ere lose money if they met their competitor's price or lose customers if they did not. As an example it costs BBC Chemical Company $1. 50 per pound to manufacture in the U. S. And ship to Asia and only $0.
50 per pound to manufacture in Asia. Following the lead of many of their competitors, BBC has chosen to manufacture in China. Entering China has many benefits including a large relatively untapped market, lower overall costs, lower restrictions on production and a central proximity to the rest of Asia.Many of BBC Chemical Company's direct customers are either moving to or are already located in China.
As well, China and Asia are undeserved markets for BBC Chemical Company and many of their competitors. Moving to China is necessary to maintain market share as well as seek incremental business from new markets. One of BBC Chemical Company's goals is to become a global supplier of specialty powder coatings. To achieve this goal, they must expand into Asia through China.
BBC Chemical Company has chosen to build its own plant in China rather than to form a partnership or acquire an existing company.When seeking partners, BBC Chemical Company encountered a number of issues surrounding business practices in China. These business practices violated BBC Chemical Company's code of conduct and ethical objectives. While these specific business practices are common in China and have Eden accepted Ana opiate Day competitors, BBC chemical company NAS chosen not to follow suit.
Instead, BBC Chemical Company has chosen to build their own facility. While building has a number of advantages, there are a number of disadvantages to consider as well. Advantages include: Full control of the facilityBuilding to exacting standards rather than adapting an existing facility Maintaining quality standards similar to other BBC Chemical Company plants Maintaining company code of conduct and ethical standards Disadvantages include: One to two years to build a facility, slowing speed to market (competitors already producing, include North American and European manufactures who have partnered with local firms as well as thousands of small local competitors) Exporting from US facilities at a loss Lack of local partners and knowledge may impede entry into market While BBCChemical Company builds their factory in China they will continue to supply Asian customers from its North American manufacturing facilities, at a substantial loss due to logistical and transportation costs. Company Overview BBC Chemical Company is one of the world's largest manufacturers of specialty chemicals - technologically sophisticated materials that find their way into applications in a variety of major markets. Consumers never see most of Abs's products; rather, they are used by other industries to produce better-performing, high quality end products and finished goods.
The history of BBC Chemical Company as been a series of innovative technical contributions to science and industry, usually taking place behind the scenes. Markets where extensive use is made of Abs's products include the paint and coatings industry, electronics, household products/detergents/personal care, water treatment, adhesives, plastics and salt. In every corner of the world, BBC products are Quietly Improving the Quality of Life. W In the late sass, BBC acquired two great companies - Ronald (name changed), a maker of electronic chemicals, and Tomorrow International (name changed), a global producer of specialty chemicals and salt.
BBC has sales of approximately $6 billion and more than 17,000 employees. It operates nearly 140 research and manufacturing locations in 27 countries. The company has more than one hundred ISO 9000 and more than twenty-five ISO 14000 AMASS registrations around the world. Worldwide headquarters are located in the United States. BBC is a Delaware corporation whose stock is traded on the New York Stock Exchange under the symbol BBC. BBC is committed to being a good neighbor and responsible corporate citizen.
At various places on their web site there are discussions of a number of initiatives, including Responsible Care@, Community Advisory Committees, and activities centered on the health and safety of employees, customers, the communities where they are located, and the environment. BBC Chemical Company's Code of Conduct BBC Company stresses the importance of its code of conduct to each employee worldwide. The code is strictly embraced and enforced at all levels of the organization: Trot ten c Board AT Directors to can entry-level salaries staff position.In fact, once a year each salaried employee is asked to: 1) sign the Code of Conduct and certify that he/she has not violated any of the ethical provisions notation in it; and 2) certify that he/she is not aware that any other employee has violated the code. Portions of the Purchasing section of the code of conduct are reported below: Relationships between BBC Company and its suppliers should be based on mutual respect and integrity.
These relationships should be maintained at the highest standards of business ethics. Under no circumstance may an BBC employee misrepresent a competitive situation to a supplier.BBC Company does not require nor does it expect any form of entertainment, promotional gifts or holiday cards as a condition for doing business. It is strictly prohibited for an BBC purchasing agent to solicit any gifts or entertainment or accept spontaneous nominal gifts valued in excess of $50; accepting any cash gift; traveling at a supplier's expense or participating in a supplier-sponsored training seminar that is extravagant in nature. Any supplier or employee who suspects that an BBC employee is not operating within the Code of Conduct, should promptly report their suspicion anonymously to the BBC Compliance Hotlist at 1-800-123-4567.The General Code of Business Conduct repeats, in part, the provisions mentioned in the Purchasing Code, ND adds the following: Gifts of cash or property may not be offered or made to any officer or employee of a customer or supplier or any government official or employee unless the gift is legal, nominal in value (less than $50) and approved in advance by a Director or Business Executive (n most countries it is illegal to make gifts to government officials).
Conflicts of interest: any employee who has a financial interest or performs work for a company with which we do business or compete, must disclose such conflict to the respective Director or Business Executive. Securities Transactions: at times, some BBC employees may become aware of confidential information that has not yet been disclosed to the general public. In those cases, the information must be held in strict confidence. Those who became aware of such information may not buy or sell company stock, nor advise others to do so, until the information has been made available to the general public.
Safety, Health and Environmental laws: BBC conducts its worldwide operations and manufactures its products in a way as to not harm the environment and the health and safety of its employees, customers and the public. BBC is also committed to complying with all local applicable laws and regulations. Accounting records: Abs's financial statements and the books of record on which they are based must accurately reflect all corporate transactions. All receipts and disbursements must be accurately reflected on the accounting books, and Abs's records must disclose the nature and purpose of all corporate transactions.
BBC employees are instructed to cooperate fully with both internal as well as external auditors and withhold no information from them. Other accounting and internal control provisions pertinent to the case study are as follows: 1 . Bank accounts: the corporate treasurer must approve the establishment of all bank accounts. 2.
Financial arrangements: the corporate treasurer must approve all financial arrangements with banks such as: loans, sales or purchases of securities; dealing in foreign currency; etc. 3.Cash disbursements: every disbursement (with the exception of petty cash) must be supported by an approved Purchase Order or neck Request. I nee Tulle name AT ten payee must De recorder on ten payment.
C may not be made payable to "cash", "bearer" nor the individual approving the transaction. 4. Employee compensation: all payments to employees must be Justified eased on services rendered. Employees may not be asked to refund a portion of their compensation or spend it in an illegal or unethical manner. 5.
Billing: all shipments must be billed promptly and accurately. 6.
