ReAgent Company’s Strategic Management

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Most strategic solutions which most of the companies implement can be said to lie within the sphere of marketing. The creation of new business, mergers, alliances, taking new market niches, retail policies, expanding of the product line and choosing suppliers and partners, all and many more solutions are implemented within the limits of marketing strategies. One of the aspects of strategy management is driven by the need to explore and exploit new markets. The need of new markets was promoted by several factors such as the effect of globalization in eliminating borders, the rapid growth of technological development, the effect of foreign markets, and changes in infrastructure sectors of economy. In regard of the aforementioned, this paper provides an analysis of ReAgent, a UK based chemical manufacturer, outlining the major areas that should be considered in terms of its strategic management and marketing. Accordingly, the paper presents recommendations based on the analysis and the work experience gained from working for 2 years in the R&D department of the company.

Research Methodology

The main basis for the analysis is the primary sources obtained through the working period in the R&D department of the ReAgent Company. Such sources include personal experience, personal observations and discussions with the company’s managers. Accordingly, the secondary sources are used as a supportive argument in the paper, which are based on the literature review of both theoretical aspects of strategic management and the chemical industry. Additionally, the certain information on ReAgent’s products and background were used from public sources such as the company’s corporate web site.

Organizational Background

Industry Background

The chemical industry is second leading sector of the industry, after electronics, which is the most rapid in providing the implementation of the attainments of scientific and technical progress in all the spheres of the economy, and which promotes the acceleration of the development of productive forces in each state. The main peculiarity of chemical industry is the orientation of the main science intensive productions (e.g. pharmaceutical, polymer materials, reagents and etc), as well as fragrance-cosmetic, household chemistry and etc, on fulfilling of everyday needs of people and their health.

Company Information

The Company: The company is in the chemical industry for about thirty years, being established in 1979 and specializing in a line of products such as “sodium hydroxide, solid chemicals such as copper sulphate and potassium hydroxide, buffer solutions, conductivity standards and solvents such as chloroform, acetone, toluene, isopropyl alcohol and methylated spirits.” Additionally, the company provides products with particular specifications according to customers’ demands through “repacking services, sub contract manufacturing and a bespoke manufacturing facility.”

The Product: The company holds a wide range of products which mainly stock chemical products from their own manufacturing facility. The main area of specialization for the Reagent Company is bespoke chemicals. The niche occupied by ReAgent can be seen reasonable for such industry sector as chemicals, where stock products might not fulfil specific demands, especially for other manufacturing purposes, and thus many customers require “solutions of a particular strength, grade or pack size.”

In that regard, the position of the company can be seen as the result of a certain technological development, combined with a high level of expertise in the chemical field which allowed them to control the main factors of success in the industry, i.e. the technology and the production.

The Market: In relation to competitors, Reagent implements the concept of differentiation, where buyer value is comparable in general, but the related activities differ, so as the prices can be varied between cost efficient and premium. In general, the market for chemical distribution is expected to grow, as of 2008, where the competition might shift due to “outsourcing trends, restructuring of the chemical industry, increased international trade and the market entry of Asian producers.”

Customer and his Needs: As stated previously, the customer oriented approach in ReAgent can be seen through the specialized niche of bespoke products. In that regard companies operating in niches serve sufficiently small segments of the market, where such role is traditionally is assigned to small businesses. Nevertheless, niches can be implemented by large companies, where the key, as seen through ReAgent bespoken products, is specialization. The area of specialization might fulfil the customers need based on several factors, such as end-users, the size of the clients, special clients, geographical principle, and individual orders.

Vision and Mission: The vision of the company can be seen through occupying other specialization niches stated earlier, where the new niches such as price-quality specialization can be used as a competitive advantage. The mission of the company, in that regard, is reaching new customers, through international expansion. In that matter, the achievement of such goals can be seen through marketing approaches, which in the view of integrated marketing communications, are long term implementations and go beyond advertising, public relations and brand management.

Strategy and Strategic Management


Strategy can be defined as a general and non-detailed plan of any particular activity, which in terms of business implies “the direction and scope of an organisation over the long-term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations.”

In that regard, two dimensions can be confused, i.e. strategic planning and strategic thinking, where critics argue that such confusion leads to that, managers cannot distinguish between a true vision of the situation and the created one. In that regard, the strategy cannot be seen as more than just a plain vision without a proper execution that translates the vision into practice. The sufficient efforts in creating certain strategies make it difficult to change it frequently; therefore the strategies are commonly formulated in broad terms.

Strategic Management

Strategic management can be seen as an extension deriving from strategy and directed toward organizations. In that sense, strategic management can be seen as managing the organizational activities through orientation directed toward regulations and changes caused by the internal and the external environment. In that regard, strategic management can be seen as a utilization of both strategic thinking and strategic planning. Strategic thinking can be seen as the ability to think systematically, i.e. taking all the possible perspectives and possibilities in consideration, which might be perceived as unattainable at a certain moment in time. Strategic planning, on the other hand, can be seen as an organizational process which can be regarded as a separate discipline that includes innovative methods necessary for accurate formulation of the main tasks, e.g. SWOT analysis, and outlining how the company can switch from one position to more beneficial without any considerable risks.

According, to the aforementioned, the strategic goals of ReAgent that should be addressed by the company’s strategic management can be stated as follows:

  • Remaining competitive during the next year.
  • Sustaining strong market positions during economic crisis and sales decline.
  • Developing new line for oxides in three years.
  • Opening new facilities in China and export raw materials in five years.

In that regard, the formulation of the goals implies their execution and the means necessary to do so, which points to a single loop learning, i.e. “given or chosen goals, values, plans and rules are operationalized rather than questioned.”8 In other words, the mission of the company can be represented by a set of goals, where the goals is a particular state of separate characteristics of the organization, the achievement of which is preferable. Additionally, among the goals’ requirements that should be acknowledged in this perspective is their alignment of the main subjects of influence. An area of shared interests can be achieved, where the interests of the individuals and the corporation can be outlined through a goal setting process.

Environmental Analysis

PESTLE Analysis

Factor Description Impact
  • Stable political situation
  • Mild to low effect of government regulations on the industry
  • Price competition
  • The need for additional expenses.
  • Global competition
  • Reduced purchasing power
  • Increased number of investments
  • The relation to work and toward social phenomena
  • The formation of consumer preferences
  • Innovative approaches to the development of new products
  • The need for constant improvements
  • Losing a share of the market in cases where technology modernization was postponed
  • Protective legal measures
  • The variation of standards within European countries might put constraints on expansions
  • Dynamic environment
  • Efficient market system
  • Might result in industry decline
  • Changes the demands of products.

Porter’s Five Forces

The Threat Description Impact
The threat of entry
  • High investments required
  • Loyalty to brands
  • Raw materials are not controlled
  • Distribution channels are controlled.
It can be seen that loyalty to brands will require new entrants to use extensive marketing strategies to conquer the market. In that sense, for Europe entrants with nameless brands might be attractive with prices, which in turn are affected by the required investments.
The power of buyers
  • The products are standardized.
  • Demand for quality.
  • The products are demanded.
  • Easy to switch suppliers.
The main factor is that the products are demanded and cannot be substituted, accordingly the power lies within the main players in the industry.
The power of suppliers
  • A few large suppliers.
  • The brands are strong.
  • The prices are stable.
The strategic options of ReAgent can be seen as framed within due to powerful suppliers.
The threat of substitutes
  • The quality is a factor.
  • The prices are within a reasonable limit.
  • Only the price is a factor.
The pricing niche for this industry can imply a little threat for substitutes.
Competitive rivalry
  • Mostly equal competition.
  • High market growth.
  • The industry is costly.
The competition can be seen through the characteristics of the industry. In that sense, the industry can be seen as sustainable accompanied by market growth. Thus, stating that competitive rivalry has a moderate power.

In terms of the PESTLE analysis, it can be pointed out the favourability of the legal and the political environment for the chemical industry. ReAgent has to develop new marketing strategy. It can be seen that the implementation of the strategy is a long-term investment which will justify itself by forming a competitive advantage. In that regard, the expenses associated with new marketing strategy are essential to and unavoidable.

Regarding technology and environment, the company can expand their array of specializations by occupying new niches, which will help identifying their target audience, as well as the acknowledgement of the technological development as a driving force to stay competitive in the market.

Regarding the threats analysis, according to Michael Porter, the company is most concerned with the intensity of competition within its industry. Accordingly, Porter’s five forces analysis can be used to analyze the attractiveness of the industry sector’s structure by examining competitive forces involved. The main competitive forces can be identified as follows:

For ReAgent, intense competition includes such giant as POSCO, Corus Group Limited, Baochemical Group Corporation, and United States Chemical Corp. The sustainability of the firm can be seen through the ability to adapt to external factors through durability and limitability. In the case of the chemical industry this cannot be achieved merely by using resources and developing competitive advantage.

Internal analysis

McKinsey 7s Analysis

The McKinsey 7s framework is an analysis developed by Tom Peters and Robert Waterman in the early 1980 as a way to internally examine “how well… [the] organization is positioned to achieve its intended objectives.” The analysis is conducted by examining seven interconnected factors, which are “Strategy, Structure, Systems, Shared Values, Skills, Style, and Staff”. The analysis is conducted as following:

The Factor Description Impact
Style The organisational factor in terms of corporate culture. This factor can influence the company’s plan in expansion, specifically if the expansion might concern non-Western European Culture.
Skills In this context, the skills are mainly organizational rather than individual, where the technology management implemented by Reagent can be considered In the era of globalization obtaining vital organizational skills can be seen as a strategy which might have high priorities, e.g. outsourcing strategies.
Systems The business processes in the organisation. In that regard the 30 year experience can outline several ‘systems’, such as the mini mills technology. The influence can be seen through the provision of a powerful tool for modernization.
Structure The interaction between the company’s units. The structure can be seen through traditional management to which authority was shifted. Being the most visible part in the company, usually leading to starting organisational changes from re- structuring.
Staff The factor associated with the type of employees and workers the company needs. Being a company which is technologically oriented, emphasis on managerial positions as well as the engineering positions might indicate the blind spots within the organisation.
Strategy The strategy implemented to achieve competitive advantage. Can be seen as the main factor influencing ReAgent’s further development, where the orientation on technology and new specializations can affect their position on the market and accordingly their competitive advantage.
Shared Value Central beliefs of the company and their mission. Can be established as providing wide range of products to a larger audience. The shared value factor might influence the branding of the company, and vice versa.

From the McKinsey 7-S analysis, it could be outlined that the company’s changes are related to strategic issues, generally concerned with marketing and competitive advantage which in turn are related to technology and production.

BCG Matrix

BCG (Boston Consulting Group) matrix is a method of determining “what priorities should be given in the product portfolio of a business unit.” The main advantage of using BCG matrix can be seen through helping the company to distinguish “high-growth products in need of cash inputs” and “low-growth products that generate a lot of cash” 13 The BCG matrix was conducted as following:

Market Growth Rate High Stars ?
Pharmaceutical Intermediaries
Standard Solutions
Petrochemicals manufactured to ASTM Standards (American Society for Testing and Materials)
One-of-a-kind Test Kits and constituents
Clinical Reagents
Specialist Buffers
Low Cash Cows Dogs
Acetic Acid
Brick Acid
Caustic Soda
Chemical Indicators
Copper Sulphate
Distilled Water
EDTA and many more popular products
Bulk chemical manufacture
High Low
Relative Position

Using BCG matrix and the information provided on the ReAgent Company, it can be seen that ReAgent’s position represents a cash cow, where “profits and cash generation should be high, and because of the low growth, investments needed should be low.”14

SWOT analysis

The SWOT analysis can be considered as the conclusion of the external and the internal environment of the company, where it “provides information that is helpful in matching the firm’s resources and capabilities to the competitive environment in which it operates.”

Strengths Weaknesses
  • A set of high and low profile products
  • The strategy’s Orientation
  • The structure of the company
  • The shared value of the company is not reflected in the company’s brand
Opportunities Threats
  • Equal competition
  • Brand Loyalty
  • Technological advantage.
  • The decline of the industry
  • High investments required
  • European standards variation

The external and internal analysis reveals that the factors of the company’s strength are concerned mainly with the company’s market position and line of products, whereas the threats are mainly uncontrolled events. In that regard, it could be suggested that the direction taken by the company is appropriate to the current condition with possible adjustments to the communication and the marketing aspects.

Generate suitable options for change using specific tools

Ansoff Matrix

The Ansoff Matrix, also known as “the product/market expansion grid”, is a method of analysis, first published in the Harvard Business Review in 1957, which helps generating options such as “new products, new markets, new channels, or new marketing campaigns”, and choosing the best option that suits the situation best. The matrix basically demonstrates the risk of a particular strategy based on factors such as market development, diversification, market penetration, and product development. The analysis was conducted as follows:

Existing Products New Products
Existing Markets
  • Pricing strategies
  • Marketing Strategies
  • Loyalty schemes
  • Rebranding
  • Bespoke products.
  • New specialization niches
  • Developing new products and brands
New Markets
  • Geographical expansion
  • Rebranding
  • Marketing Research
  • New distribution channels
  • Export raw material
  • Expanding the array of products
  • Entry into house-hold chemicals, fragrance, and cosmetics market.

One of the options that can be seen through Ansoff matrix is Product Development. Market – an option present within the goals of the ReAgent Company.

Porter Generic Strategies

Porter Generic strategies are the strategies resulted by applying the company’s strengths which fall into the categories of cost advantage and differentiation. The resulting strategies are “cost leadership, differentiation, and focus”. Porter generic analysis was conducted as follows:

Target Scope Advantage
Low Cost Product Uniqueness
(Industry Wide)
Cost Leadership
  • Cost advantage
  • Increased market share
  • Cost reduction
  • Influence on quality
  • Innovation
  • High quality
  • Marketing costs
  • New products advantage
(Market Segment)
Cost Focus
  • Specific market segment based on price
Differentiation Focus
  • Specific market segment or niche based on products.
The threats and the weaknesses are the same

From factors generated through the previous SWOT analysis, it can be seen that the suitable generic strategy is Differentiation Focus, which is compatible at the same time with the approach that was previously stated in occupying a specific niche based on specific range of products.

Stakeholder Analysis

A stakeholder analysis is “a technique you can use to identify and assess the importance of key people, groups of people, or institutions that may significantly influence the success of your activity or project.” Mainly the analysis can be conducted in order to assess the influence of each of the stakeholders on the company’s initiatives as well as developing the best strategies that will eliminate the obstacles for the initiatives’ successful implementation. The stakeholder analysis is conducted as follows:

Stakeholder Stakeholders’ position Influence The strategy Stakeholder Interest
CEO Responsible for establishing the vision and the mission of the company High. Among the company’s top priorities is the achievement of their objectives, and thus this factor should be considered. Profit, reputation, position
Customers Having the buying power. Medium The availability of the products, along with competitive prices. Quality, price, availability
Partners Supplying the raw material for the manufacture medium Changing partners can be vital step if the approach of cutting the production costs was taken Prices, supply chains, time, long term partners
Special Customers Forming the special products’ niche customers High Taking the strategy of differentiation would be suitable for the special customers. Time, availability

The standardization of the products, where ReAgent is apparently striving toward such aspects, is certainly an approach to follow; “Everything we manufacture and supply is done so in line with our ISO 9001:2000 accredited Quality Management System. We are also an accredited Investor in People and are on our way to achieving ISO 14000”. Having established international standards, it can be seen that the most suitable option is Going Global, which accordingly fulfils the major stakeholders’ interests, i.e. profits, position, and availability.

SAF Test

The SAF framework is a method in which the options of the organizations are evaluated, “in terms of three key success criteria which can be used to assess the viability of strategic options”: suitability, feasibility, and acceptability.

Strategic OPTION Suitability Acceptability Feasibility
  1. Market Development
-Corresponds to the goals of the company.
– competitive advantage
– New directions of income
– Less competitors
– High price of research, development and testing
– Marketing expenses
– The possibility of disapproval of new products
The company has the resources to implement this option.
2. Differentiation Focus – One of the existing competitive advantages of the company
– Other products of the company might be affected with such focus
– The possibility of losing specific clientele at the expense of another one.
– Lessen the risk of development
– flexibility in controlling the prices
– The possibility of expanding the clientele base for a specific niche.
– Falling behind in innovations
The company is already partially implementing this option.
3. Going Global – Corresponds to the vision of the company
– Lies within its long term strategic objectives
– New markets and accordingly new sources of income
– New sources of cheaper raw materials.
– Less expensive labour
– Needs a lot of investment
– Regional competition
– Costs of marketing and building a brand
At the current time the company does not have the resources and the capabilities to implement this option.

It can be seen that the most suitable options is the Differentiation focus, due to the fact that is partially implemented and the company is capable in fulfilling this option in short terms. The second option that should be considered from stakeholders’ analysis is going global. However, the company should conduct more detailed analysis in regards of the timing of the implementation.

Competition and Position on the Market

Globalization can be seen as influential on the UK market even for large companies such as ReAgent. In that regard ReAgent should react to such competition based on level of their operation, i.e. local, international, or global. Thus, a marketing approach should cover such reaction, including such approaches as rebranding, differentiation of products and pricing policy. Although, the market’s new entrants can influence this course of competition, the main threats can be seen through the companies that already established itself in the market.

R&D Department and Its Strategy

The main goal of the R&D department in any company can be seen through developing and promoting new products, and in that regard the company’s expansion should be concerned with that department. The structure and the corporal culture of Reagent were developed over the course of the company’s thirty years experience in the market, through which the company responded to several factors.

According to the internal analysis, it can be said that ReAgent’s structure resembles formal structure, where due to the diversity of the company’s business processes, ReAgent comprises of several departments and facilities. Due to the company’s long market experience, the competition involves other factors besides pricing, which are nevertheless requiring financing and promotion, where non-price advantages are related to brand and marketing activities. The created value for ReAgent’s brand on the long term represents the company’s brand equity. Price advantages, on the other hand are based on the amount of available resources which allows reducing the prices or reducing production expenditures.

Strategic Management Plan for Department

“The establishment of the company’s corporate culture and its shared values is an important aspect affecting the company’s performance. The changing world of globalization might make such cultural values points of strengths for the local markets, rather than the international where they might be perceived as opportunities. These opportunities should derive from the cultural preferences of the international markets where the company is planning to expand”. “In that regard, it can be said that ReAgent is capable of competing with large firms, where the company’s experience is a vital factor in that matter. The low threat of entry, shown previously, makes it hard for new organisations to enter the chemical industry”.

Strategy Implementation

Implementing the strategy implies utilizing a new quality control system. In that regard, considering the possible expansion, the company should analyze the possibilities of internet-based control systems. It should be noted that one of the reasons of change resistance is the attachment to familiar setting, background and culture, and thus the possibility of the employees resisting technological change should be considered. Accordingly, in addition to new quality system, a competitive advantage can be reached through differentiating the shipment costs, so that a balance can be achieved, rather than “absorbing the cost of shipment” for all destinations. In that regard, a twofold approach will help the company expand to new market, while controlling the quality and the costs of the products within a balanced limit, which will accordingly promote profitability and growth.

Change Process

It can be said that economic variations can be directly related to variations in local markets. Implementing customer-oriented approach, Reagent does not rely on the customers to reach their productions; instead, the company focuses on the needs of its target audience who need their production.

The approach taken by ReAgent implies that the company will implement internal change, in terms of resources, capabilities, competencies, and only after that these changes will be utilized in the environment. According to the company’s financial performance, it can be said that the company is performing well so far, where the values surpasses the expenditures of the business processes involved. Thus, it can be said that economic variations can be directly related variations in local markets. Implementing customer-oriented approach, Reagent does not rely on the customers to reach their productions; instead, the company focuses on the needs of its target audience who need their production.

Although Reagent’s marketing efforts should include all their offerings, their main message should be directed toward their established niche of products.

Strategic Plan for R&D and Marketing Departments


Objectives Tasks Responsibility Communication Time frame Monitoring progress Evaluation of success
1) products control and innovations
2) Entering new geographical markets, including parts of Western Europe and China
1) Products development
2) Market Assessment
3)Marketing Campaigns
4) Evaluation
5) Correction
CEO, R&D department, and the marketing department.
Sets the goals and the objectives, while R&D and marketing develops, monitor, implement and evaluates the strategy.
– change agents
– working sessions for controlling and confirming intermediate tasks
– The process participants are the CEO, R&D department, and the marketing department.
Five years, among which 9 months will be devoted for organizational issues related to the reorganization, while the expansion objective will be a long-term project taking a period of four to five years. The process is monitored by team formed from the marketing department and possibly external agents, through such indicators as sales, profits, market share, and demand. – research and test group reports
– marketing surveys
– market analysis statement
– an expertise group might assigned from each department (if required)
– Minutes of meetings


  • Head of Strategic Department
  • Reagent Chemical Services Ltd
  • 18 Aston Fields Road

Dear Sir:

Subject: Strategic Analysis Recommendation Date: 30 July 2009

In the light of the conducted analysis, it should be mentioned there is a need for a certain re-consideration for the company’s approach. In that regard, according to the SAF analysis, it is recommended that the company implement the “ Differentiation Focus “ perspective in terms of your strategy, and accordingly focus the efforts of the targeted population, rather than focusing on low growth-low market share products. Accordingly, the company should re-establish its image using marketing strategies. The orientation toward customers’ needs, as a part of a system with several factors, will allow the company to simultaneously address the issues of market competition, which accordingly, will result in forming an effective organizational policy.


Khalil Salim Al Hedaifi.


A distinctive feature of business is its interconnected nature. In that regard, companies are in need to always find new ways to reduce the limit of influence of internal and external factors through reorganizations. In that sense, the market positions held by ReAgent is related to its ability to by constantly innovating business processes.

Additionally, considering the possible changes in the organization, the company needs to create a new strategic vision which will guide it through the transformation process, and accordingly future actions and decision. In that regard, as a part of the strategic vision, the orientation toward customers’ needs will allow the company to simultaneously address the issues of market competition, which accordingly, will result in forming an effective organizational policy.


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Strategic management at ReAgent
Strategic management at ReAgent

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