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The Macro Point of view On Basf Substance Company Commerce Essay

To start, here is the macro point of view on BASF Chemical substance Company. BASF is one of the leading substance companies on the planet, like this BASF is affected by many political and inexpensive factors. Different laws and regulations determine the creation of the company. Moreover, the scientific factor has barely influence in this area of chemical creation, where the innovations are leading pressure. In addition, the main mission of the company is to set-up chemistry for the ecological future. As a result, BASF Company has a whole lot of strategic methods to achieve its goals.

This survey has some objectives. To start, one of the primary objectives of the record is to investigate BASF Company. To show the advantages and opportunities of the company`s future development. On the other hand, this report presents the weaknesses and threats of the company, for which it gives advice to make BASF more successful. Quite simply, this report aims to presents advice to BASF Company how to boost its interior and exterior situation.

The pursuing information was gathered for this report. For collecting of information were used two main research methodologies. First, supplementary research was done on micro and macro environment of BASF Company, for which the primary source was used internet. Second, the primary research was done by performing an interview with Mrs. Sengel, who is member of Professional Board of the company.

The report has the fallowing structure. In section two, BASF Company and its own products are shown. In chapter three, the job`s description and goal are explained. Section four of the survey is the Theoretical Platform of the report, in which the McKinsey`s seven S model, PEST evaluation and SWOT research are theoretically identified. In chapter five and six, Infestation research and McKinsey`s seven S model are mounted on collected information. Infestations analysis can be used to analyze BASF`s eternal environment, while the McKinsey`s model is employed to investigate BASF`s internal business. In chapter seven, is shown SWOT analysis predicated on the collected information. In section eight the conclusions based on the analyses are drawn. In chapter nine, tips for company improvement are given. In chapter ten, this statement is critically appraised.

2. Company description

2. 1 General Company Information

Here is basic information about BASF Company. BASF is the leading chemical company, which chemicals are being used in virtually all industries. The creation of the business is separate in six different segments: Chemicals, Plastics, Performance Products, Functional Solution, Agricultural Solution and Engine oil & Gas. BASF as an International company has 70 global and local business units across the world. The office in Germany is completely focused in produce of Performance Products. BASF incorporate economic success, communal responsibility and environment cover. The main quest of the company is to produce chemistry for a ecological future. BASF's 111, 141 employees, located all around the globe, help the business to attain its goals. BASF is market focused in four main areas: Europe, North America, SOUTH USA and Asia. In 2011, the most sales are created in European countries and company`s gross annual turnover amounted to 73, 5 billion Euros.

2. 2 Product Description

Germany`s office of BSAF has a wide range of products. The primary segment is called Performance Products, which include the fallowing product lines: Dispersions and Pigments, Health care Chemicals, Diet and Health, Newspaper Chemicals and Performance Chemicals. The product portfolio of the business in this section includes vitamins and foods additives, materials for pharmaceuticals and then for cleanliness, home and personal care items. Instances are products for locks care, sun and decorative care and attention, body care, cosmetic and oral care and attention. The company does not offer products to the final customer. BASF develop and sales molecules, catalysts and substances to the other companies which use this things for producers of products for final client. These things aren't end- product; they are really intermediate products which go to other steps of the production process.

3. Project description

This chapter will give project explanation. The section will be independent in tree sub chapters, which will describe project description, project aim and research strategy.

3. 1 Job description

This sub chapter will show the task description. To start out, BASF is one of the leading chemical substance companies on the globe market. In the forex market there is a large competition. Firstly, the future opportunity for the business is to set-up new products. Second, to find new market`s prospects. Finally, one of the main things in this branch is advancement. On the whole, to achieve its goals, BASF have to understand its own advantages and weaknesses.

3. 2. Project aim

The purpose of this sub chapter is to explain the project aim. For this job was collected information about external and inner environment of BASF Company. The purpose of this job is to comprehend the company`s situation based on McKinsey 7S evaluation, Infestation and SWOT analysis and based on it to give tips about BASF`s future development. Furthermore, showing BASF`s advantages, weaknesses, opportunities and dangers. In other words, these are most significant factors which illustrate present situation and future possibilities for one corporation.

3. 3 Research approach

To start, for research of BASF Company`s present situation are being used two research methods. First, the principal research was done by executing an interview with Mrs. Sengel, who's member of Executive Board of the company. This information can be used for internal research of the company. Second, the external environment is analyzed by extra research method. This includes McKinsey 7S research and PEST evaluation. Thirdly, the advantages, weaknesses, opportunities and hazards are described with use of SWOT analysis. In conclusion, all of collected information is utilized to give suggestions of the company, about its future development.

*The world can be seen in the Glossary

4. Theoretical framework

The reason for chapter four is showing the theoretical platform of internal and external evaluation. Hence, the true company's situation will be shown. First, in sub-chapter 4. 1 will be shown the inner evaluation- McKinsey 7S model. The model include seven elements, that happen to be segregated in so called hard S`s - Strategy, Structure and Systems and four so called soft S`s - Shared Values, Skills, Personnel and Style. Second, in 4. 2 will be discusse the exterior PEST analysis. Quite simply, Politics, Economic, Socio-cultural and Technological factors that affect the company will be include. Finally, in 4. 3 SWOT- summary of the business will be given.

4. 1 Internal analysis

Figure 1: McKinsey 7S model

7S. gif

Source: 7S strategy software

In this paragraph will be shown the so called hard S`s of McKinsey 7S model. First of all, Strategy describes actions and programs of a business to accomplish specific goals. The exterior environment influences the business and its strategy. Thus the venture prepares to adapt on changes also to determine the right place among customer and challengers. Secondly, Structure represents the hierarchy of the company. It shows the connections between the people which work in the organization. It could be seen on the organization graph. It always is dependent from the business enterprise strategy, form the business internationalization, size and diversity. The 3rd "S" from so called hard S's is Systems. Systems are all procedures recognise the business uses to use every day. This includes internal and external techniques. Systems are directly related to the Framework and Strategy of the business, because they illustrate the main procedures of the business to accomplish its goals (Cuypers 2010, 3-9).

The tender "S" from McKinsey 7S model, which is given in this paragraph includes - Shared Values, Skills, Staff and Style. Peters and Waterman's (1984) argued that distributed Beliefs in 7S research determine the primary guiding principles of the business. Moreover, it refers to what an organization means and thinks in. Understanding the Shared Values of the business is the simplest way to find the primary ideas and goals of the organization. To accomplish these goals helps Skills. Skills will be the unique abilities of the business. Skills describe the capability and quality of the company on the other hand with the competitors. It refers to the learned capacity for staff within the company. Very important here is quality of the products and services within the organization. These exact things are related to the Personnel and Design of the company. Personnel refers to the number and type of individuals employed by the business. However, staff details the operations used to manage the careers of employees. It really is related to the Style, since it is directly reliant on the individuals resource's system that manage the way personnel is encourage, reward and motivate. Style is the task culture. It really is describe the key way in which senior professionals run the organization. It really is related to the system that affects the steps in the company. The most important things that style describes are how professionals allocated their time, beliefs and their leadership skills. The primary factors will be the size and the structure of the organization which can determine how different departments inside of the company are managed (Spencer, 2011).

4. 2 Exterior analysis

In the first place, every business will depend on the politics factors. Politics factors include federal regulations and legalities. The politics factors establish the framework of the business and the rules under which the company must handled. It depends on the framework, because in the different countries the trade limitations, tariffs, tax policy and employment laws are not the same (Oxford University or college Press, 2004).

The second factor which immediately affects every kind of company or organisation is the financial factor. The economic environment consist different factors, for example income and income circulation, current and project monetary expansion, inflation and interest rate. This environment can offer to the company both opportunities and hazards. Understanding of economical environment determined the company development (Oxford University Press, 2004).

Thirdly, the company is affected by public factors. This lifestyle fads and demographic changes motivated the consumer tendencies. The main purpose of every company is to comprehend which exactly will be the consumer's desires and needs. If social-cultural changes are obvious, it is easier for the business to developing strategies and techniques to accomplish its goals (Oxford University Press, 2004).

Finally, nowadays, one of most important factors which influence the business is scientific environment. This is actually the most remarkable and the most effective development factor. They are forces that create new technologies, products and market opportunities. In the world of technology, the company has to be open and plan new opportunities (Oxford University Press, 2004).

4. 3 SWOT

According to Berry, the SWOT examination is an extremely useful tool for understanding and decision-making for all sorts of situations running a business and organizations. SWOT means for Strengths, Weaknesses, Opportunities, and Dangers (Berry, 2012).

Strengths are inside capabilities that might help the company to reach its objectives; on the other hand weaknesses may interfere for that. This includes understanding of the internal environment or the problem within the company or company. The factors which identified the straightness and weaknesses of the company are tend to be in today's. Factors are associated with products, pricing, quality, staff and techniques within the business. With understanding of these factors the business may understand the initial selling proposition and exactly how to boost it (Berry, 2012).

Opportunities and dangers are related to the external environment which shows the situation beyond the company or organisation. Here, the factors seem need to be in future. Factors here are relating with marketplaces opportunities - fashions, styles, seasonability, politics, society, competitors and every other exterior factor which influence the company. With understanding of opportunities company is able to exploit the exterior factors to its benefit. Hazards are negative factors which may test the company`s performance (Berry, 2012).

5. External analysis

This chapter talks about the exterior environment evaluation - PEST. The section is divided into four sub charters. Firstly, sub section 5. 1 gives the Political factors, which effect the BASF Company. Second, 5. 2 illustrate Economic factors. Finally, 5. 3 show Interpersonal factors. Finally, sub section 5. 4 analyzes Technological factors which impact the company.

5. 1 Political factors

There are some politics factors, which impact BASF Chemical substance Company. Among these factors is a common effort for a sustainable chemicals industry has launched by EU in 2005 time. This factor has a good effect on BASF, because the mission of the company is to build chemicals for sustainable future. This political factor gives possibility to the company to make more innovations with collaboration on European Union. The negative politics factor for the business is unfavorable political environment. In European Union there will vary regulations about Genno- modified products and some molecule products. For these reason USA is more favorable market for these types of products (Thomas, 2005).

5. 2 Cost-effective factors

One of the results from present credit crisis is reduced utilization of customers. This is strong factor, which influence BASF Company. It makes the near future more unstable and precariously. Only the best companies with the best products could keep their market`s place. The next economic factor which influences BASF is increasing energy prices. It is negative because it could affect chemicals industry competitiveness further. On the other hand, there may be increasing competition from new financial forces, such as China. In order to avoid these negative factors, BASF Company could orientate to different markets, such as Africa and Middle East (Thomas, 2005).

5. 3 Community factors

In chemical substance`s industry is very complicated to find new well educated faces. The reason is the actual fact that teenagers choose other employment opportunities in various branch. Young skills in chemical substance`s branch, which are well educated require high remuneration and good working conditions. BASF Company is working to improve matters. Flexible working time is one of decisions of the situation. On this way could be attached competent labour (Thomas, 2005).

5. 4 Technological factors

For BASF Company the technologies are incredibly important. The main reason is that technological innovations gives opportunity to the business to make products better, and add services in company`s collection. The company is emphasis of solutions for ecological future, and definitely inventions are the key point for it. By any means, the global technology programs act as associates in product development (Thomas, 2005).

6. Internal analysis

6. 1 McKinsey seven S framework

To start, for BASF like as world`s leading chemistry company is very important to strengthen its position on the market. To achieve this goal, company must focus their business on customer`s needs and requirements. In chemistry market, as well as for company, which do not produce product for the ultimate consumer must focus on creativity, to create new products and functionalized materials, and also to find new solutions for more sustainable future. These things are very important too, for the other aim of the business, which is to increase year`s profit with average four percent per yr, and to increase two percentage points faster than global substance creation (Interview, Appendix 1) (BASF, 2012).

The composition of BASF Company is a Matrix framework. The Matrix organizational framework divides authority both by functional area and project area. In BASF you can find Board of Professional Directors which comprise eight members. They are really responsible for the management of the company. The Panel of Professional Directors regularly studies towards the Supervisory Table. Supervisory Board consist 12 participants, six shareholders representative elected by the Annual assembly and six associates appointed by the representative body of the employees. Every country and every different division in BASF Company has a main, who are supervise from the Chairman of the management mother board - Kurt Bock (Interview, Appendix 1) (BASF, 2012).

The company systems are incredibly important for the business enterprise and for good done work. BASF comes with an own marketing department atlanta divorce attorneys country where in fact the company is situated. In addition, they may have supporting marketing agency outside the company, which helps them to build up the motives and the way BASF wants to provide itself to the customers. Such as a chemicals company, BASF only use trait media for advertising - home personal health care periodicals or euro- plastic magazine, that happen to be special journals for cosmetic market. To can be found and to achieve success a huge company like BASF is necessary to have set rules and good communication between different departments. Main method within the business to discuss the problems and development in the market are director`s meetings. The complicated structure of the business determined the need from daily meetings of the leader figures in the organization, much that the others (Interview, Appendix 1) (BASF, 2012).

One of BASF`s goals is to make rules and system more prevalent in the different countries. The first choice style in the company allows to employees to talk about their ideas about innovations. Every idea on concern placed by some of employees is consider, but the main decision is often considered by The Supervisory Mother board. In once, the management style is people focused, one of the main things for the company is to comprehend consumer needs, and create values on their behalf (Interview, Appendix 1) (BASF, 2012).

BASF is company with almost 200 000 employees. Every day in Germany for BASF works 54 000 employees. They work in different departments however the responsibility for his or her work is taken by managers of each department. There are a great number of frameworks and courses which are from the central team, and which are normal for every employee. The employees have to respect the rules and framework distributed by the main department. Rewards and warnings in the company depend from Human being Resource Department. There isn't something special within the business, they fallow the legal system. Every employee has a set of target to create "employee dialogue". This makes management style in the company open up for ideas from employees. "Employee dialogue" gives chance to employees to discuss the goals that they are reaching in the year and to reveal new ideas. The incentive system in the business is connected with compensation as money add-ons for done well job (Interview, Appendix 1) (BASF, 2012).

BASF Company, as company which do not produce product for the ultimate customers, it is vital to makes products better, much healthier and safer than challengers. The reason is that the finish consumer never seen and could not understand that BASF Company is better than competitors, and cannot distinction them. The most important thing for the company are innovations, this is the only way that company can be unique and distinctive from opponents. THE BUSINESS spending a lot of money each year to make research, which really helps to find new opportunities for development. In the same time, the business makes everything possible to possess products which already are developed and make sure they are successful on the market. The main question for BASF is to understand better than competitors what are exactly consumer`s needs and also to be ready to meet these needs on time (Interview, Appendix 1) (BASF, 2012).

The central value of BASF is to set-up chemistry for ecological future. To accomplish its goals BASF will try to be always a company with impressive products, clever solution of problems and good service departments. The company aims to be the world most wide-spread dealer in the chemical substance industry and to generate high return of its property. It wants to attain these intentions without harming the environment and nature (Interview, Appendix 1) (BASF, 2012).

6. 2 Interconnection of the seven S

To start, for BASF like as world`s leading chemistry company is very important to bolster its position on the market. For achieve its goal for the Company is necessary to make its products better than competition and to has high quality of its services. Because of this helps The Matrix organisational framework and the management design of BASF, which is people focused - oriented to comprehend customer's needs. The company is concentrate on innovations and every decision for a fresh idea is used by The Supervisory Mother board. For the company`s success is important to get good communication between the different departments also to have fixed guidelines. In BASF this is achieve with regular meetings of The Board of Professional Directors.

The company strives to be the world most widespread provider in the chemical industry and to generate high come back of its assets. For these goals, company must employ highly competent staff. Moreover, the leader system of the company is centers to encourage the employees to share their new ideas. Because of this, the company use so called "Employee dialogue". On the other hand, the company has to invest in researches. The R&D team is sensible to find new market opportunities for BASF.

The main quest of BASF is to produce chemicals for sustainable future. Because of this goal helps the nice organisation structure, co-operation between departments. On the other hand, very important are employees and the way they are managed. Crucial are enhancements and the style of the company. Many of these things determined the current situation of the business and its future position and development of the market.

7. SWOT overview

First, BASF Company is one of the leading chemicals company in the world. This factor offers chance to the business, to manage the top area of the market also to have hard impact on smaller chemicals companies. Additionally, as so international and big company BASF has a whole lot of production sides across the world. Among the company`s talents are production attributes, so called Verbund attributes. These edges have excellent conglomerates of the production. This conglomeration allows, every kind of product produced within the business, to be used in the most effective way. Different materials produced in one team of the company, can be utilized in another one, which means that the BASF Company produce raw materials which use in its own production. Besides, this allows to the business, to produce a whole lot of different materials and products, to make improvements in this sector and create more value for the clients than competition (YouSigma 2011).

Second, BASF Company has an enormous profit within the last year. Nevertheless, within the last couple of years is detected declining earnings in a number of business sections, which is one of the company`s weakness. There are many reasons concerning this fact. The firs reason, is one of the business risks, is the Economic slowdown in europe Region, which arrives of today's credit problems. The credit problems in these days covers and impact, both small and in the same way huge companies like BASF. The other reason is that folks in European Union have possibility to choose between hundred different products. Here your competition is very strong and the marketplace in Europe is developed till maximum. One of company opportunities is to increasing commodity chemicals market in parts like Africa, Asia Pacific and Midsection East. They are the growth regions of the future, for almost every kind of industry, because the expansion rate of revenue in future in Europe would not be so high. The other chance for the company is usually to develop services and new ideas (YouSigma 2011).

Figure 2: SWOT analysis table

Location of factor





Leading substance company

Concept of Verbund

Variety of products


Decrease earning in a few countries



Product innovations

Expand the business enterprise in Africa, Asia and Midsection East


Laws and regulations

Economic slowdown in Western european Union

8. Conclusion

BASF is international company, which is head in chemical substance market. The company production is segregated in six different departments and its own market is oriented in four main parts. The department of the business which is situated in Germany is focused primly in development of Performance products - products for personal health care. Moreover, the main mission of the company is to keep its position on the market and also to create products for lasting future. For understanding the present situation of the company was accumulated information, based on it was made research for interior and external environment of the BASF Company.

In this statement, BASF Company was examined. For this evaluation were used McKinsey 7 S model for inner environment of the company. The weaknesses, advantages, opportunities and risks were analyzed predicated on SWOT research of BASF. Based on these analyses it was found that the company has well conducted Matrix Framework and good working management style. Nevertheless, global company like BASF is difficult to control and demand stringent guidelines and frameworks for the employees. Alternatively, the business produces intermediates, which are being used from other manufacture companies to produce last products. For these reason, the final customer is not always informed for the quality of BASF`s products. That is the main reality, the particular one of the most important things for the business is inventions. Certainly, the enhancements and development are the company`s main quest. For this quest helps quality R & D and marketing team. The conglomeration of the different departments is one of company`s durability.

For understanding of BASF`s external environment was used Infestations analysis. It was found that, there are different political, economical, social-cultural and technological factors which effect the company. One of negative factors differs laws and regulations, which limited the production of Genno- customized products and some molecule products in European Union. In the same way, negatives factors which effect the company are increasing price of the electricity nowadays, and increasing competition from countries such China. But at the same time, the European Union gives chance for inventions, which is positive politics factor for the company. In conclusion, the company is focus to produce products and also to find solutions for ecological future. Understanding of internal and external environment is the key factor for achieve its goal.

9. Recommendation

In this record BASF Chemical Company was analyzed. Based on these examination was determine the opportunities, threats, strength and weaknesses of the company. Moreover, the internal and external environment of the company was analyzed. Based on this information, this report provides advice of BASF how to adopt advantage of its opportunities.

Firstly, BASF Company can be much better than competition if it makes more innovations. That is possible with collaboration of R&D and marketing office. The company has to be wide open for new ideas and also to search for people who are useful for it. In addition, the opportunity for the company is to increasing item chemicals market in locations like Africa, Asia Pacific and Middle East. On this way, BASF will continue to develop the business and to maintain its position on the marketplace.

Secondly, one of BASF`s objective is to make its management systems more common for each and every company`s department in the world. For this objective the company has to create more strictly guidelines and frameworks, which the for every worker. Furthermore, BASF have to keep carefully the good communication within departments.

Finally, BASF Company have to invest more in research about customer`s needs. This is actually the easiest way to reinforce its position on the market. The most important thing for just one company is to learn exactly customer's needs and also to make everything possible to build products better than competitors.

10. Critical appraisal

Firstly, the info gathered for the exterior environment of the business - PEST examination, was very less. There have been not interview questions about Infestation analysis. For this reason, was very hard to look for the current exterior environment of the company and factors which influenced it.

Secondly, BASF Company is huge company for which is easy to find a great deal of information. It is difficult to determine which of the information is actually important. Moreover, the time for writing the record was limited and the interview was conducted late. It is very difficult with so much information to get the right source. To close, it's important to become more prepare with the information for this kind of survey.

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