Chemical Labour Grouping Case Analysis
Chemical Labour Grouping, EEIG as described by Renart and Pares (736) is a company with a well established presence in France, Germany, Spain, and the United Kingdom with synergistic business units involved in the production of paints and other similar coatings supplying automobile and other manufacturers. Among the strengths of the company include a strong export presence in other European Union countries, Middle Eastern countries, the United States, and a number of Latin American countries. Strengths enjoyed by the firm also include its well established reputation, a strong if not dominant position among EC suppliers of automobile paints, and very significant synergies between the four strategic partners.
Weaknesses include a lack of established centralized administration linking the four paint manufacturers as well as a partnership agreement that does not provide for centralized decisionmaking or revenue and cost sharing. Threats include competition from groups such as industry leader PPG and other powerful players such as Hoescht and BASF as well as the lack of a universal marketing structure for the group. As what Segil (30-31) characterizes as a strategic partnership, Chemical Labour lacks adequate internal systems and structures to capitalize upon opportunities for growing its market through sales expansion, penetration of new markets, and generating new clients based upon its membership in the European Union.
Whipple and Frankel (21) note that strategic alliances often fail when they are entered into without giving adequate thought to the development of an administrative or partnership structure through which vital functions will be handled. The simple fact of creating a strategic alliance does not necessarily mean that such an alliance will be a success. As described in the case, Joseba Garmendia is aware that all of the manufacturer
...