The transformation of ICI
An ICI case study

Page 1: Introduction

In the late twentieth century, major corporations in modern industrialised economies have recognised the need to add value to their products. Adding value means making the product more desirable and valuable to the consumer. Consumers want to buy those goods and services which best meet their wants and needs. Nowadays, these wants and needs are becoming increasingly sophisticated. Today's...
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Page 2: Creating a strategy

Modern business organisations live or die according to the strategies they formulate. Strategies are the frameworks which define the direction a company is moving in. Strategy is concerned with setting out the core products and services that form the heart of the organisation, the markets the organisation will operate in and the key resources required to put strategy into practice.Since its...
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Page 3: Transforming the business

How then did ICI set about transforming itself? ICI decided to create a new portfolio of businesses in areas where it is difficult for rivals to set up, describing the new businesses as: 'ones where you can't simply spend £500m to set up a large production plant to gain entry to the industry overnight'. Rather, ICI has moved into a range of new products which depend on high levels of skill...
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Page 4: Acquisitions

In order to establish its position in its new core areas, ICI has carried out a number of major acquisitions. In 1997, ICI completed a £4.8 billion acquisition of Unilever's speciality chemicals business. The principal businesses acquired were: National Starch, a world leader in industrial adhesives and speciality starches. National Starch is a company acknowledged as a leader in...
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Page 5: Financing the new strategy

A key component of any strategy involves outlining the major resource decisions required to put the strategy in place. In order to acquire new businesses, ICI has had to sell some of its existing businesses e.g. ICI has sold its polyester polymers and non-US titanium dioxide businesses to DuPont for a staggering £1.8 billion. Between 1997 and the year 2000, ICI is expected to raise over...
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Page 6: Conclusion

Today, ICI is characterised by the production of a range of new products which are used by all consumers. For example, anyone using hair spray is likely to have benefited from its technology because an ICI company holds the licence for the lacquer that holds the product together. Face cream will have a surfactant or emulsifier produced by ICI's speciality chemicals businesses, high heels will be...
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