Essay on Case Study - Methanex

1058 Words Feb 25th, 2015 5 Pages
Introduction
Methanex market leader position could enable it to absorb minor fluctuation in demand and supply through its global supply chain in an effort to remove volatility and set more consistent long-term supply prices for its consumers seeing a 49% growth increase from 1997 to 2013.

Global recession caused Methanex prices to decline in 2009; however, recovery was seen in 2010 showing moderate growth. Global demand for Methanol had total revenue of $1,967 million in 2010, representing a compound annual growth rate (CAGR) of 4.7% from 1997 to 2010 and an expectant CAGR of 7.3% between 2011 and 2015.

Analyze the competitiveness of the methanol industry using Porter's 5-forces and the PESTEL Model.
Porter's 5-forces

Threat of
…show more content…
Therefore, threat of substitutes is low.
Complements:
There are a lot complementary products which goes with methanol. These include, stoves, gloves, automobiles, paint brushes, gasoline, wood, liquids (plastic bottles), hammers, nails, CD Players, and the list goes on.
Bargaining Power of Buyers:
Due to few competitions, buyers bargaining power is low. Methanol is a valuable, cost-effective product and no direct substitute exists. Buyers (such as the pharmaceutical industry , energy sector) have little choice but to purchase them in order to save.
Degree of Rivalry:
The degree of rivalry is assessed as low seeing the main competitors (especially in China, the Asian Pacific and the Middle East) are state own and their cost structures, core businesses and access to financial resources are different. Methanex has a greater market share and will continue to increase.

PESTEL Model

Political - Methanex faces immediate challenges associated with the political unrest in Egypt, the idling of the company's newest production plant and the shared ownership at the joint venture with an unstable government.
There is also a ban of natural resources from the Argentinean government and the restriction of imports of methanol in China.

Economic - The global recession and

More about Essay on Case Study - Methanex

Open Document