Case 11: Great Lakes: Great Decisions Report
Mr. Bill Loelius
Bus. 499 (Senior Seminar)
October 20, 2010
Great Lakes’ Immediate, impending, and Invisible Competitors and How G.L. Measure’s Up
Great Lake’s bad public relations image is its only immediate, impending and invisible competitor. The industry environment that Great Lakes is situated in is one that is characterized by global market shifts and pressures. At the moment, Great Lakes does not have any competition from possible competitors such as Ethyl Corporation, or Dow Chemical. However, they are beginning to receive criticism from the press on a global scale that is affecting their company’s image. If their corporate image is affected, then they are bound to see those affects trickle down into their profits in the near future.
As division manager, it should not be difficult for Ellie Shannon to interpret those external conditions, but what she is experiencing is an inability to provide a solution that would be an acceptable “coping mechanism” for her company’s board of directors. As long as Great Lakes remain in the lead additives arena, their public perception is only going to get worse. Pressure from the environmentalists will eventually be aided by strict government regulations on their lead usage, which will cause them more damage in the future than they can anticipate at the moment. Great Lakes does not appear to measure up well against their growing negative image in the media. In their past experiences, Great Lakes was able to maintain a low profile in their market because they were still growing. Currently, the media portrays Great Lakes as appearing to be driven by greed because they appear to be unmoved by the environmental and public health risks to producing and distributing this unhealthy additive. In fact, it makes them look as if they are taking advantage of undeveloped countries because this chemical has already been banned by the developed world. Great Lakes’ Main Capabilities
Great Lakes began as an oil and gas company. However, after expanding into the area of natural resources, they began to focus on chemicals such as bromine. Great Lakes quickly rose from brining in 50 million in revenues, to an estimated billion in a matter of 30 years. Great Lakes’ began focusing the bulk of their production on producing tetraethyl lead, (TEL). As a result of that change, Great Lakes became dominate in the domestic and global market. However, their company’s dependency on this area is slowly beginning to become a huge problem for the multinational company.
The Lead additive, chemically known as (TEL) or tetraethyl lead was widely used in the domestic and international markets until the turn of the twentieth century due to the public health concerns it raises. As a result, this chemical has been banned in usage of producing gasoline in the Western world, and other developing companies. However, third world and other undeveloped countries have not made the transition to unleaded gasoline because their automotive markets have become solely dependent on this form of gasoline. The Lead Additives Industry and the Five Forces of Competition Model
The lead additive industry is actually still being spearheaded by one of the companies that is mentioned in the book as Octel. The company’s real name, Associated Octel was changed from that to Innospec in 2006 in an attempt to rebrand themselves. Therefore, when the five forces of competition model is applied, one of the more noticeable forces that are relevant to this industry is the threat of substitute products. Associated Octel, which is now known as Innospec revamped their image due to the health hazards that lead, (TEL) based products was causing around the world. As a result, there were real bans on it in the U.S. and also in the UK in around 1986, (All Business, 2008). Government regulations forced both Innospect and its competitors to look for alternative sources of...
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