The Dow Chemical Company 2012

Abstract

Since its founding as a maker of bleaching agents in 1897, the Dow Chemical Company (hereafter Dow Chemical) has pursued global expansion centered on its commodity chemical business. Making great use of its economy of scale, the company has been successful in transferring the higher cost of crude oil into the cost of basic chemical products, maintaining its favorable profitability. Nonetheless, because it has primarily focused on commodity chemicals, it is also true that it lags behind other global chemical companies in terms of profitability. In recent years Middle Eastern countries, China, and the members of ASEAN have moved into the business of ethylene plants, which are the foundation of the petrochemical industry, and the environment surrounding the petrochemical industry is beginning change greatly. Therefore at start of the 21st century, Dow Chemical decided to rebuild its business portfolio and moved towards expanding its specialty chemical business. The Japanese subsidiary has made strengthening of the business of adhesives for use in impact-resistant construction in automobiles a primary goal, establishing the Dow Japan Development Center in Kawasaki. This case follows how Hiroyuki Kashiwagi, the Vice President of Dow Automotive Systems, Dow Chemical Japan’s automotive market business, is exploring various possibilities for future business expansion and growth, primarily from the perspective of technological management.

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