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BASF in China: the marketing of Styropor

Author: Probert, Jocelyn ; Schütte, HellmutINSEAD Area: Asian Business and Comparative ManagementPublisher: Fontainebleau : INSEAD Euro-Asia Centre (EAC) 1999.Language: EnglishDescription: 13 p.Type of document: INSEAD CaseAbstract: BASF is successfully marketing Styropor to moulders of packaging and insulation materials in China. However, their imported chemicals are too expensive and too sophisticated to reach a broader market. Rapid expansion of local production capacity and the rapid technological upgrading of Asian competitors endangers BASF's position. BASF starts to produce locally, too, thereby adding to the already existing oversupply of the marketPedagogical Objectives: The case raises the question of how a large MNC can cope with local or regional competition in an industry characterised by commoditisation and oversupply. BASF must use its company reputation and Styropor's brand name to differentiate, knowing that in terms of product and price it does not have a competitive advantage.
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The case raises the question of how a large MNC can cope with local or regional competition in an industry characterised by commoditisation and oversupply. BASF must use its company reputation and Styropor's brand name to differentiate, knowing that in terms of product and price it does not have a competitive advantage.

BASF is successfully marketing Styropor to moulders of packaging and insulation materials in China. However, their imported chemicals are too expensive and too sophisticated to reach a broader market. Rapid expansion of local production capacity and the rapid technological upgrading of Asian competitors endangers BASF's position. BASF starts to produce locally, too, thereby adding to the already existing oversupply of the market

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