Case Study:â??Chemical Leasingâ?(Adapted fromEnviron SciPollut Res (2014) 21:12445â??12456) Intro C

Case Study:“Chemical Leasing”(Adapted
fromEnviron SciPollut Res (2014) 21:12445–12456)
Intro
Company A producesparts
forfilling systems (e.g., caps for fuel or oil tanks). Its main clients are global
car manufacturers. Once formed, some of these parts need to be degreased before
the next step in the production process. The degreasing of the parts is but one
of many steps in the overall production process. Thus, Company A considers its distinctive
competence to be in the forming of the metal parts, not in degreasing them.
Company B is a
global business unit of The Dow Chemical Company. Since its founding, Company B
has been focusing on providing sustainable solutions for industrial surface
cleaning with solvents. It follows the “cradle to cradle” philosophy. It has
the capability to provide solvents and stabilizers that are adapted for
specific cleaning situations.
Company C isa
manufacturer of high-performance equipment for solvent-cleaning processes. Company
C provides a “Chemical Leasing” service which includes the cleaning machine along
with the peripheral devices necessary for the supply, reconditioning, and recovery
of chemicals. It also provides maintenance services, including the provision of
spare parts and service. Company C has
the “know-how” to custom engineer and to operate equipment such that chemical
consumption can be minimized.
Before “Chemical
Leasing.”
Before the
introduction of “Chemical Leasing,”Company A was entirely responsible for
degreasing its metal parts. Since the degreasing process is not a distinctive competence
of the company, and given that the degreasing step is but one of many steps in
the overall production process, optimizing the use of solvent and installing
betterperforming equipment was not considered a high priority for the company. Thus,
the degreasing process before the implementation of “Chemical Leasing”at Company
Awas undertaken in a semi-open process (second generation degreasing machinery)
which resulted in a considerable risk of worker exposure to the solvents.
Company Bâ€s
pricing scheme for its solvents was based upon a euro/liter of solvent used.
Thus, it was interested in maximizing revenues (maximizing use of its solvent
products). Company B had little interest in the recycling of solvents as it would
have meant a lower consumption of solvents.
After “Chemical
Leasing”
With the
introduction of “Chemical Leasing,” the unit of payment for Company Bâ€s product
was changed from euros per liter of solvent purchased to euros per cleaned
metal part. Company B now acts as the chemical product and know-how supplier, providing
the cleaning solvent in the closed loop system, the technology and know-how to
monitor and readjust the solvent quality, and the training of partners in safe
waste take-back and waste management. Company Chas provided the latest
technology cleaning machine, a closed loop system from its fifth generation of
degreasing machines, which reduced the risks of workers being exposed to the
chemicals of concern by a factor of over 10. Company Cis running the cleaning
process for the client and has the know-how to operate the equipment in an
optimal way. It operates the equipment based upon the combined know-how of
Company B and Company C.
After 4 years
“Chemical
Leasing” has demonstrated considerable environmental benefits – solvent
emissions have been reduced over 90 %. In addition, solvent consumption was
reduced by 72 % and the need for stabilizers by over 55 %. A reduction in
energy consumption of 50 % has also been achieved. These high reduction rates
were possible because latest technology equipment is provided to the lessee,
and because the process is fully run by a lessor partner.
Questions:
1. List the relevant resources thatCompanies A, B,
and C possess. you should see mutual interdependence(both sides rely on each for certain
activities/resources) which could lead to value created for both sides).
2. strategic actions”
such as
-Offensive moves
-Defensive moves
-Mergers & acquisitions
-Vertical integration
-Outsourcing
-Strategic alliances
can strengthen a companyâ€s competitive
position. Are any of these “strategic actions” present in this case? If so, explain
your answer with evidence from the case.

 

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