Introduction

Dow Comingis a chemical silicone company founded in 1943 as a joint venture of Dow Company and Corning Glass. The company offers silicones for commercial operations in the market. Since its inception, the companygainedsubstantialmarket share of 40% in the market, flowed by GE silicones,which covered 25% of the market share.

During the initial period, the company grew rapidly, covering the majormarkets. Itinaugurated its supplyin 80 different markets, managing a strong value proposition and thus, charging premium pricing.Over the period of time, however, the increasedimitation ofthemodel and low cost siliconedeterioratedDow Coming’s markets, leading to lowsales.

Perhaps, the complacentsituation of the companymade it lose the market share graduallyand eventually. In such sit-upon, the company has come up with a dual brand strategy, developing Xiameter as a secondlow cost brand in the market to compete with the costeffectiveimitators.

Doing so, the company developed a different branding strategy and image, inorder to avoid confusionandbrandambiguityin themarket, leading to brand cannibalization.Also to strengthensuchstrategy, it developed and targeted differentmarkets, other than the one Dow Coming has been targeting with different targeting factors.

Though till now, the strategy hasoffered the companysubstantialprofits, yet the question oflong termssustainability and maintenance of value proposition through newbrandstill remains.

Xiameter Harvard Case Solution & Analysis

Analysis

In considering the marketing environment discussed in the case, what internal and/or external factors were responsible for Down Corning's poor performance between 1995 and 2001...as also illustrated in the case Exhibit 3?

Internal factors

Under the internal factors, duringthe initial period till the endof 2001, the companyremained ina complacentsituation, it is due to the fact that the company ignored the increasingmarketing trend of availing the cost effectivetechniques in themarket.

It can also be said thatduetosuch complacency, the management remainreluctant to accept the change occurring in the market.

Moreover, it only invested 4 to 8percent oftotalsales on Research and Development which onlyoffereda limited span of findings to the company, making it inadequately sufficientto deal withthemarket change.

In addition to this, the company failed to plan the next move and remain complacent with the current success, leading to no future planning and inception of the growth strategy.

External factors

Under the external factors, the company remainedunaware of the changing market trends.In doing so, it failed to plan for the future growth trends.Such canbe seen from its complacentpositioning the market, over the period of timeand the inability or reluctance to pursue product development.

Moreover, it also failed to pursue a growth strategy and also remain at back foot in developing competitivestrategyagainst theother competitors in the market. Apart from this, the company also failed to analyze the risingcompetition in the market, making it lag behind in thecompetition.

Lastly, since thecompany remained in a complacentsit-upon, it did not pursue any strategy to sustain its positioning in the market. Moreover, it also failed to develop a sustainablecompetitive edge in the market, leading to the dilution of brand image in the market.

All these factors and inability to move forward in the market, made companyremain in a stagnant state, leading to continuous and gradual losses and also the entry of new entrantseasilyin the market, deteriorating the value proposition of the company..............

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