Dow Corning: Managing a Product’s Life Cycle Helps Businesses Capture More Value
12 Dicembre 2011 - 4:00PM
Business Wire
When the first commercial cell phone call was placed on October
13, 1983, to the grandson of Alexander Graham Bell in Germany from
the president of Ameritech Mobile Communications in Chicago, IL,
who would have predicted that a generation later, not only would
there be more than five billion cell phones in use around the
world, but many of the devices would enable users take pictures,
pull up maps, and watch movies and TV?
“In a fast-paced global marketplace, there is no time to rest on
laurels because today’s innovation will become tomorrow’s
commodity,” said Jeroen Bloemhard, business vice president and
executive director of Dow Corning’s XIAMETER® brand. “This is a
business reality that leaves manufacturers looking for ways to
capture more value throughout a product’s life cycle in order to
recoup R&D and marketing costs to the fullest extent
possible.”
When a product is new, its novelty enables a producer to capture
a premium in the marketplace. However, it doesn’t take long for
competitors to step in and disrupt the market with equal or better
quality at lower prices. The product can soon become a commodity or
what many industries also refer to as a standard product.
To stay ahead of the competition, innovative companies invest in
research and development to regularly refresh their portfolios with
newer, specialty products while they continue to find ways to
capture as much value as they can for their standard products. For
example, when the iPhone 4S was introduced in October at $199 (for
16GB), Apple announced that they would offer the iPhone 3GS for
free and the iPhone 4 for $99, both with service contracts.
The chemical industry is faced with the same business reality.
For example, Dow Corning Corporation, a global leader in
silicones and silicon-based technology and innovation, offers more
than 7,000 products to its customers around the world, serving
virtually every industry from automotive and personal care to
renewable energy. Many of those products are at the start of their
life cycle being unique, differentiated, innovative, and
specialized to meet the needs of customers. However, some of them
have been around since the company was founded in 1943, and while
still critical and valuable for specific applications, they are
mature, and competitive alternatives are readily available.
“Customers who purchase differentiated products pay a premium to
take advantage of those unique technologies in silicon-based
chemistry, and generally need access to comprehensive technical and
customer support,” said Bloemhard. “On the other hand, customers
buying standard silicones are interested in securing products most
efficiently and cost effectively.”
In Dow Corning’s case, the solution was to adopt a two-brand
strategy. The Dow Corning® brand focuses on full service and
solutions offerings for customers who want innovation,
customization and solutions beyond products. Its no-frills
XIAMETER® business model and brand introduced in 2002 and expanded
in 2009 offers standard silicone products through a web-enabled
order platform.
Customers purchasing via www.xiameter.com follow strict business
rules that include minimum- and multiple-order quantities, lead
times, and standardized services, which enables increased
efficiency and results in the brand’s ability to offer competitive,
market-based prices. Today, it is the world's largest web-enabled
portal for high-quality, standard silicon-based materials.
“Having two brands with very different value propositions makes
it possible for companies like ours to fully capture the value of
products throughout their life cycle,” Bloemhard said. “By
standardizing and automating processes, we can redirect resources
to discovering, commercializing and selling higher-value specialty
products and solutions through the Dow Corning® brand.”
The key to successfully executing a dual-brand strategy is to
organize one company to deliver two very distinct business models
with very distinct value propositions. For Dow Corning, it
works. It’s about understanding market dynamics and competitive
landscapes, and matching those with customers’ buying needs. By
focusing on product life cycles, they’ve been able to provide
customers with more of what they want and need.
Want to follow the Dow Corning and XIAMETER brands online? Check
us out on Facebook and Twitter.
About XIAMETER
The XIAMETER® brand of Dow Corning Corporation offers
market-based prices for standard silicone products. Introduced in
2002, the brand offers thousands of products including silicone
fluids, sealants, silanes, emulsions and rubber. The XIAMETER brand
is a no-frills model offering cost effective products through
streamlined services and a web-enabled order platform.
The XIAMETER® business model offers customers enhanced
self-service functionality, extended volume quantity options,
transparent pricing, and more credit term choices. In addition, a
broader range of standard silicone products is offered as well as
the ability to purchase through local distribution. Learn more at
www.xiameter.com.
About Dow Corning
Dow Corning (www.dowcorning.com) provides performance-enhancing
solutions to serve the diverse needs of more than 25,000 customers
worldwide. A global leader in silicones, silicon-based technology
and innovation, Dow Corning offers more than 7,000 products and
services via the company’s Dow Corning® and XIAMETER® brands. Dow
Corning is equally owned by The Dow Chemical Company and Corning,
Incorporated. More than half of Dow Corning’s annual sales are
outside the United States.
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