Those industries that mainly deal with chemicals are termed as chemical industries. It is one of the most important industries today. The primary role of this industry is to convert raw materials like oil, natural gas, metals and minerals into different products.
Few industrialists believe that, the main determinant for the success or failure of American and European chemical companies, are three themes: -
- Barriers to entry
- Strategic boundaries
- Limits to growth
Most chemical industries that are successful tend to follow definite "paths of learning." In this methodology, both first movers and close followers create entry barriers to expected competitors by building "integrated learning bases" that enables them to develop, produce, distribute, and sell their products worldwide. These companies also follow a "virtuous strategy" for reinvestment and growth. Any new product is launched in the market through diversification, dynamic scale and scope economies of the product.
Today, chemical is also widely being used for consumer good, agriculture inputs, manufacturing, construction and service industries. Studies reveal that approximately 26% of the inputs are consumed by the chemical industries itself. Rubber and plastic products, textiles, petroleum refining, pulp and paper, are some of the major consumers for chemical products. It is estimated that nearly $3 trillion is the estimated chemical enterprise. The EU and U.S. chemical companies are the world's largest producers for chemical products.
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