The chemical industry is one of the fast-growing industries in the world and the UK influenced by technological changes and innovations. In this industry, technological developments and changing market environments are externally based, whereas research and development, and modifications of products, packages, marketing channels, and advertising campaigns, are internally based. The chemical industry relies on efficient technology which influences research and development and costs of the end products (De Wit and Meyer 2004). The organization selected for analysis is INEOS. It is a privately owned chemical company specialized in petrochemical products. The company was founded in 1997 in the UK and since that time became the largest manufacturer in the country.
Environmental risks, associated with the chemical industry, involve water pollution and waste pollution. One of the useless by-products of oil is brine or saline water. Twenty- years of oil production yielded almost 500 million barrels of valuable fuel. They have also produced more than 500 million barrels of brine. In disposing of this unwanted saltwater, oil companies have polluted the fresh-water aquifers in the area (Mccann, 1999).
Political /Legal factors: In the UK, governments exercise control over their chemical production and introduce different programs for such companies. They include increasing state support, additional investments in technology, job opportunities, etc. Governments pass protectionist laws and regulations which define and preserve industry regulations and laws. Economic Environment: It is known that governments intervene in the operation of all countries’ industries. Economic growth, exchange rates, levels of income, inflation, and employment affect a company’s ability to improve products and services and hence affect levels and patterns of demand. Social/demographic factor consists of the values, attitudes, and beliefs of people of the region and affects the way that they act and behave. The government protects populations living in nearby areas and those affected by chemical production (Johnson et al 2004). Technological factors/resources Production processes in chemical industries have been transformed and automated to meet the needs of the population. Industry uses water for cooling, washing, flushing, extraction, and chemical treatment. In cleaning their products, factories dirty the water they use. Even water used only for cooling can be harmful in that it raises the temperature of the river to the detriment of aquatic life. The volume of industrial wastewater is tremendous: one beet sugar processing plant may produce as much organic waste as the sewers of a city of half a million people (De Wit and Meyer 2004).
The microenvironment involves local relations. The chemical industry is very fragmented in terms of supply operating in a large geographical area. An increasing number of aging population results in fierce competition within the industries, development of new products and services. The strength of INEOS is that its services and products are universal and can be sold in different countries. The opportunities include the high potential for growth and profitability caused by an increasing number of potential customers (Botten and McManus 1999). Still, the international situation suggests a decrease in prices in near future. Also, strict government regulations and control of INEOS will be a threat for small producers unable to compete on a global scale. Population requires new sophisticated products which meet their needs and demands. In this case, the pressure is intense when new products require major investments and long periods of development time. INEOS provides a striking illustration of this driving force (Beebe, 2006).
The chemical industry and INEOS is a major user of water for processing. Oil and gasoline are joined by “exotic” new fuels for aircraft and rockets. To produce a ton of ammonium sulfate requires the use of 200,000 gallons of water; a ton of ascorbic acid takes 1,760,000 gallons; a ton of hydrogen requires 660,000 gallons of water, and an equal amount of the drug sulfathiazole, and even 1,000,000 gallons. Instead of being a useful material, this acid pollutes water draining from the mine. There are almost 6000 miles of rivers and streams in the United States that have acquired concentrations of sulfuric acid (Mccann, 1999).
The technological dimension helps INEOS anticipate the firm’s future requirements along with an orderly, continuous, systematic, and sequential basis; marketing planning avoids crisis decisions and concentrates on integrated programs of action. Technological and innovative solutions can be seen as a rational way of translating experience, research information, and thought into marketing action. It is a pragmatic, organized procedure for analyzing situations and meeting the future. Based on information about ends and means to determine various causal relationships, trends, and patterns of behavior, it is concerned with the selection of alternative strategies. The complexity of the chemical processes and the technology that must be installed mean that minimum capital investment is of the order of hundreds of millions” (Beebe, 2006, p. 443). A decision hierarchy is established, and decisions made at the level of the total system are more important than those at any subsystem level. Thus conflicts and tradeoffs among subsystems are considered. What is best for the whole system need not be for anyone department or particular element. For example, decisions about the total marketing budget could be unfavorable to any one department, such as advertising or marketing research.
The analysis shows that environmental risks affect all areas of company performance. They create legal and technological problems and influence the strategic direction of the organization. Technological dimension is a dynamic factor that requires constant changes and improvements. It can be seen as an integrated, intelligent, rational process for guiding business change. No marketing decision is properly made without an appraisal of technological changes and innovations (Mccann, 1999). Environmental risks focus attention on broader issues than those usually contained in any one marketing subgroup such as sales or product development. By so doing they add greatly to the formulation of overall corporate and marketing strategy and objectives. Under the environmental approach, the organization is seen as an integrated production process, a coordinated whole. Marketing is coordinated with, rather than confronted with, manufacturing or finance. Environmental issues must be raised about the appropriate structural forms that marketing systems should adopt. Technological effectiveness is the ultimate test, and those elements and arrangements approved by the marketplace over time are best. Environmental concerns have recently focused on the top-level responsibility for product functions. The main tendency identified in the research is that both the state and companies recognize the benefits and opportunities of technologies and approaches to water purification. Thus, all stakeholders agree that the high level of organizational placement reflects the critical nature of manufacturing and some of its attendant activities, such as the determination of product aims and the scrutinizing of pollution and environmental risks.
Botten, N & McManus, J. 1999, Competitive Strategies for Service Organizations, McMillan: Basingstoke
Beebe,. L. 2006, Inherently Safer Technology: The Cure for Chemical Plants Which Are Dangerous by Design. Houston Journal of International Law, 28 (1), 239.
De Wit R & Meyer, R. 2004, Strategy: Process, Content, Context. Thompson International Press: London
INEOS Home Page. 2009.
Johnson, G, Scholes, K and Whittington, R. 2004, Exploring Corporate Strategy: Texts and Cases. Financial Times: Prentice Hall
Mccann, T. J. 1999, Chemical Industry Integration, Journal of Business Administration and Policy Analysis 1(2), 475.