Case Study Description of Bluestar's Acquisition of Adisseo (B)
This case describes the post-M&A integration of Adisseo of France in 2006 by Bluestar Group, the largest subsidiary of ChemChina (a Fortune 500 company) until 2013. Adisseo was mainly engaged in production of methionine, a feed additive, while China had no methionine production and had relied on its import for a long time. After acquiring Adisseo, Bluestar started to integrate Adisseo, change its executives and sent executives and technical staff to study at Adisseo, expanded Adisseo's production capacity in France and Spain, supported Adisseo in its M&A of the upstream businesses in France, and so on. More importantly, Bluestar and Adisseo jointly started a new methionine project in Nanjing, China, in 2010. In the construction of the Nanjing project, Bluestar reached a successful integration with Adisseo through project team establishment, organization structure replication, management system and institution transplantation and improvement, communication with the trade union, and fusion of organizational cultures. Additionally, in the years of the post-M&A integration, Bluestar and its parent company ChemChina realized remarkable upgrading and development. While Chinese methionine market maintained growth momentum, Adisseo was facing overcapacity of the whole industry and needed to consider the road of future development.
Authors :: F. Warren McFarlan, Donghong Li, Lei Li
Swot Analysis of "Bluestar's Acquisition of Adisseo (B)" written by F. Warren McFarlan, Donghong Li, Lei Li includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Adisseo Bluestar facing as an external strategic factors. Some of the topics covered in Bluestar's Acquisition of Adisseo (B) case study are - Strategic Management Strategies, and Global Business.
Some of the macro environment factors that can be used to understand the Bluestar's Acquisition of Adisseo (B) casestudy better are - – increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation,
increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Bluestar's Acquisition of Adisseo (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Bluestar's Acquisition of Adisseo (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Adisseo Bluestar, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Adisseo Bluestar operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Bluestar's Acquisition of Adisseo (B) can be done for the following purposes –
1. Strategic planning using facts provided in Bluestar's Acquisition of Adisseo (B) case study
2. Improving business portfolio management of Adisseo Bluestar
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Adisseo Bluestar
Strengths Bluestar's Acquisition of Adisseo (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Adisseo Bluestar in Bluestar's Acquisition of Adisseo (B) Harvard Business Review case study are -
Highly skilled collaborators
– Adisseo Bluestar has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Bluestar's Acquisition of Adisseo (B) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Adisseo Bluestar is present in almost all the verticals within the industry. This has provided firm in Bluestar's Acquisition of Adisseo (B) case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Low bargaining power of suppliers
– Suppliers of Adisseo Bluestar in the sector have low bargaining power. Bluestar's Acquisition of Adisseo (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Adisseo Bluestar to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Global Business field
– Adisseo Bluestar is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Adisseo Bluestar in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Adisseo Bluestar is one of the leading recruiters in the industry. Managers in the Bluestar's Acquisition of Adisseo (B) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management
– Adisseo Bluestar is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Adisseo Bluestar is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by F. Warren McFarlan, Donghong Li, Lei Li can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Operational resilience
– The operational resilience strategy in the Bluestar's Acquisition of Adisseo (B) Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Innovation driven organization
– Adisseo Bluestar is one of the most innovative firm in sector. Manager in Bluestar's Acquisition of Adisseo (B) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Adisseo Bluestar has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Bluestar's Acquisition of Adisseo (B) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Sustainable margins compare to other players in Global Business industry
– Bluestar's Acquisition of Adisseo (B) firm has clearly differentiated products in the market place. This has enabled Adisseo Bluestar to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Adisseo Bluestar to invest into research and development (R&D) and innovation.
Learning organization
- Adisseo Bluestar is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Adisseo Bluestar is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Bluestar's Acquisition of Adisseo (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Bluestar's Acquisition of Adisseo (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Bluestar's Acquisition of Adisseo (B) are -
High operating costs
– Compare to the competitors, firm in the HBR case study Bluestar's Acquisition of Adisseo (B) has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Adisseo Bluestar 's lucrative customers.
Low market penetration in new markets
– Outside its home market of Adisseo Bluestar, firm in the HBR case study Bluestar's Acquisition of Adisseo (B) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Bluestar's Acquisition of Adisseo (B) HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Adisseo Bluestar has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Adisseo Bluestar has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High bargaining power of channel partners
– Because of the regulatory requirements, F. Warren McFarlan, Donghong Li, Lei Li suggests that, Adisseo Bluestar is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Aligning sales with marketing
– It come across in the case study Bluestar's Acquisition of Adisseo (B) that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Bluestar's Acquisition of Adisseo (B) can leverage the sales team experience to cultivate customer relationships as Adisseo Bluestar is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Adisseo Bluestar has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
No frontier risks strategy
– After analyzing the HBR case study Bluestar's Acquisition of Adisseo (B), it seems that company is thinking about the frontier risks that can impact Global Business strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High cash cycle compare to competitors
Adisseo Bluestar has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Products dominated business model
– Even though Adisseo Bluestar has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Bluestar's Acquisition of Adisseo (B) should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Adisseo Bluestar products
– To increase the profitability and margins on the products, Adisseo Bluestar needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Bluestar's Acquisition of Adisseo (B) | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Bluestar's Acquisition of Adisseo (B) are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Adisseo Bluestar can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Bluestar's Acquisition of Adisseo (B), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Adisseo Bluestar can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Bluestar's Acquisition of Adisseo (B) suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Learning at scale
– Online learning technologies has now opened space for Adisseo Bluestar to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Adisseo Bluestar to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Creating value in data economy
– The success of analytics program of Adisseo Bluestar has opened avenues for new revenue streams for the organization in the industry. This can help Adisseo Bluestar to build a more holistic ecosystem as suggested in the Bluestar's Acquisition of Adisseo (B) case study. Adisseo Bluestar can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Adisseo Bluestar to increase its market reach. Adisseo Bluestar will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Adisseo Bluestar can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Adisseo Bluestar in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Building a culture of innovation
– managers at Adisseo Bluestar can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Global Business segment.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Adisseo Bluestar can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Adisseo Bluestar can use these opportunities to build new business models that can help the communities that Adisseo Bluestar operates in. Secondly it can use opportunities from government spending in Global Business sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Adisseo Bluestar is facing challenges because of the dominance of functional experts in the organization. Bluestar's Acquisition of Adisseo (B) case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Adisseo Bluestar can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Bluestar's Acquisition of Adisseo (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Bluestar's Acquisition of Adisseo (B) are -
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Adisseo Bluestar with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Adisseo Bluestar is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Adisseo Bluestar can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Bluestar's Acquisition of Adisseo (B) .
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Adisseo Bluestar in the Global Business sector and impact the bottomline of the organization.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Adisseo Bluestar needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Adisseo Bluestar business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Adisseo Bluestar high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Consumer confidence and its impact on Adisseo Bluestar demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Adisseo Bluestar will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Technology acceleration in Forth Industrial Revolution
– Adisseo Bluestar has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Adisseo Bluestar needs to keep up with the evolution of technology in the Global Business sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Adisseo Bluestar can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Bluestar's Acquisition of Adisseo (B) Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Bluestar's Acquisition of Adisseo (B) needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Bluestar's Acquisition of Adisseo (B) is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Bluestar's Acquisition of Adisseo (B) is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Bluestar's Acquisition of Adisseo (B) is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Adisseo Bluestar needs to make to build a sustainable competitive advantage.
