Applichem was a specialty chemical manufacturer and the market leader for its main product named Release-ease.

Release-ease was a chemical which was added to plastic molding compound, helping separate molded parts and the mold

in an easier and cleaner manner. There were different requirements for Release-ease over regions. In Europe, customers

preferred packages of 50 kilos and used products within 12-month shelf life. Whereas, in the U.S. and other regions,

customers purchased packages from 0.5 kilo and product shelf life could range from 1 to 3 years.

Applichem had four plants: Gary (the U.S.), Frankfurt, Mexico, Sunchem (Japan). The management team was thinking

that Gary plant was operating ineffectively. Therefore the company conducted a study to compare the performance of the

four plants.

Competitive environment analysis

Applichem was dominant in market share globally and had advantage of the earliest registered patents. However,

competitive environment contained potential threats:

First, market demand for Release-ease was forecasted to be flat in the incoming five years. The slow growth of market

implied that Applichem had to be efficient and competitive to maintain the current market share.

Second, the biggest competitor, a U.S.-based company locating their only plant in Luxembourg, performed very well

in Europe. Meanwhile, the requirement of product quality and specifications in Europe is not homogeneous with other

market. Therefore, it was crucial for Applichem to pay attention on European segment to be competitive. In the U.S., there

was competition with a local manufacturer. Although a manager of Applichem thought that this rival did not have a long

term business, the company should not be complacent. In Japan, Applichem was the only company of which products

were under approval of the