Transcript A Science Analysis of the Global Top 50 Chemical Companies

Science Strategy and Context:
A Study of the Global Top 50
Chemical Firms
Mark Rerek
April 3, 2001
Introduction
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Science strategy can be examined through
an examination of a Company’s externally
published research portfolio
Assume a capability in a given area of
science is necessary to utilize that science
internally for technology development
Total portfolio indicates the degree of
scanning a Company believes is necessary
Examine Top 50 global chemical companies
(Chem Eng News July 26, 2000) using the
Science Model®
Eighteen Companies With Membership in
Few or No Research Communities
Company
Sales Rank Company
Sales Rank
Tour Total
12
Norsk Hydro
36
Huntsman Corp.
14
Reliance Industries
37
Henkel
16
Praxair
39
Dainippon Ink &
Chemicals
20
Eastman Chemical
41
Air Liquide
21
ENI
43
PPG Industries
29
Borealis
44
Equistar
30
Formosa Plastics
47
Sabic
32
Lyondell
48
BOC
34
SKW
49
Thirty Two Companies that Participate in
Significant Numbers of Research Communities
Company
Sales Company
Rank
Sales
Rank
Company
Sales
Rank
BASF
1
Sumitomo
13
Union Carbide
28
Dupont
2
Mitsui Chem
15
Rohm & Haas
31
Bayer
3
Aventis
17
Monsanto
33
Dow Chem
4
GE
18
Novartis
36
ExxonMobil
5
Solvay
19
Air Products
38
ICI
6
DSM
22
Celanese
40
Shell
7
Mitsubishi
23
Asahi Chemical
42
Akzo Nobel
8
Clariant
24
Honeywell
45
Degussa-Huls
9
Toray
25
Roche
46
BP Amoco
10
Ciba
26
Chevron
50
Elf Aquitaine
11
Rhodia
27
0
(40)Celanese
(24)Clariant
(26)Ciba
(50)Chevron
(28)Union Carbide
(12)Elf Aquitaine
(9)Degussa-Huls
(8)Akzo Nobel
(27)Rhodia
(15)Mitsui Chem
(38)Air Products
(25)Toray
(19)Solvay
(31)Rohm&Haas
(13)Sumitomo
(17)Aventis
(42)Asahi
(10)BP Amoco
(4)Dow Chem
(6)ICI
(22)DSM
(45)Honeywell
(23)Mitsubishi
(7)Shell
(18)GE
(1)BASF
(33)Monsanto
(5)ExxonMobil
(3)Bayer
(44)Roche
(2)Dupont
(36)Novartis
Total Communities
Top 32 Global Firms:
Total Research Communities
1800
1600
1400
1200
1000
800
600
400
200
Structure Of Global Science: 1999
Biochemistry
Chemistry/Physics
Performance
Low
Biomedicine
High
Economics
Chemistry/Physics:
Additional Detail
ENTOMOL
ECOLOGY
J ZOOL
PLANT
PHYSIOLOGY
PHYSREV D
ASTROPHYS J
J MATH ANAL APPL
T AM MATH SOC
AQUACULTURE
PARASITOL
INVENT MATH
DISCRETE MATH
LECT NOTES COMPUT SC
IEEE T
AUTOMATIC
CONTROL
IEEE T
SIGNAL
PROCESSING
Performance
Low
High
Chemistry/Physics:
Additional Detail
J SOLID STRUCTURES
MAT SCI ENG A-STRUCT
ENVIRON
TOXICOL
CHEM
DAIRY SCIENCE
J CHEM
PHYS
ANAL
CHEM
JACS
COLLOID
MACRO
MOL
PHYS
REV B
APPL
PHYS
LETT
GEO
PHYSICS
Chem/Phys
Central Network
Performance
APPL OPTICS
Low
High
CHEM ENG SCI
Chemistry/Physics:Additional Detail
Drill Down to Central Node
LINEAR TECH PHYS LETT+
FLUID
PHASE ALGEBRA
APPL
EQUIL
J THERM ANAL
CALORIM
J CHEM
PHYS
J MED CHEM
OIL GAS SCI TECH
J AM CHEM
SOC
J AM CHEM SOC
and APPL PHYS LETT
drive central Network
PHYS REV B
APPL PHYS
LETT
J CATAL
COLLOID
NUCL INSTRUM
METH A
MACRO
MOL
LIQ CRYST
Performance
Low
High
25% of Global
Science Model
Communities
IEEE T
MICROWAVE
THEORY
Conclusions on Context
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Importance of Chemistry and Physics to each other
Strong relationship between Agricultural Science and
the Chemistry/Physics world
Lack of strong relationships to Biochemistry world
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Implies difficulty in going from chemistry-based science to
pharmaceutical science based in biochemistry
There are fewer opportunities in Chemistry than
Biochemistry
The place to look for new breakthrough opportunities
is in high performing areas of physics that can be
leveraged in chemistry
Chemistry Disciplines
in Subsequent Analyses
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J AM CHEM SOC
MACROMOLECULES
J MED CHEM
J CHEM ENG SCI
J CHEM TOXICOL
LIQ CRYST
J SOLID
STRUCTURES
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J CHEM PHYS
ANAL CHEM
J COLLOID
INTERFAC SCI
J THERM ANAL
CALORIM
MAT SCI ENG A
SOLIDS
J CATAL
Blue = outside central node
Total Research Communities for Top Ten
Chemical Companies in Sales
1200
Biochem & Biomed
Phys Comms
Chem Comms
1000
800
600
400
(10)BP Amoco
(9)DegussaHuls
(8)Akzo Nobel
(7)Shell
(6)ICI
(5)ExxonMobil
(4)Dow Chem
(3)Bayer
(2)Dupont
0
(1)BASF
200
0
(40)Celanese
(24)Clariant
(26)Ciba
(50)Chevron
(28)Union Carbide
(12)Elf Aquitaine
(9)Degussa-Huls
(8)Akzo Nobel
(27)Rhodia
(15)Mitsui Chem
(38)Air Products
1000
(25)Toray
1200
(19)Solvay
1400
(31)Rohm&Haas
(13)Sumitomo
(17)Aventis
(42)Asahi
(10)BP Amoco
(4)Dow Chem
(6)ICI
(22)DSM
(45)Honeywell
(23)Mitsubishi
(7)Shell
(18)GE
(1)BASF
(33)Monsanto
(5)ExxonMobil
(3)Bayer
(44)Roche
(2)Dupont
(36)Novartis
Total Communities
Top 32 Firms:
Total Research Communities
1800
1600
Biochem & Biomed
Physics
Chemistry
800
600
400
200
Biochem & Biomed
Physics
(5)ExxonMobil
(3)Bayer
(44)Roche
Chemistry
(2)Dupont
1800
1600
1400
1200
1000
800
600
400
200
0
(36)Novartis
Total Communities
Top Five Firms:
Total Research Communities
0
(19)Solvay
(31)Rohm&Haas
(13)Sumitomo
(17)Aventis
(42)Asahi
(10)BP Amoco
(4)Dow Chem
(6)ICI
(22)DSM
(45)Honeywell
(23)Mitsubishi
(7)Shell
(18)GE
(1)BASF
(33)Monsanto
Total Communities
Next Fifteen Firms:
Total Research Communities
400
350
Biochem & Biomed
300
Physics
250
Chemistry
200
150
100
50
0
(40)Celanese
(24)Clariant
80
(26)Ciba
100
(50)Chevron
(28)Union
Carbide
(12)Elf
Aquitaine
(9)DegussaHuls
(8)Akzo Nobel
(27)Rhodia
(15)Mitsui
Chem
(38)Air
Products
(25)Toray
Total Communities
Remaining 12 Firms:
Total Research Communities
120
Biochem & Biomed
Physics
Chemistry
60
40
20
Research Portfolios:
Diversified versus Focus
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Diversified:
Seven broadly diversified
 Seven Chemical firms aspiring to Pharmaceuticals
 Five Petrochemicals
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Focused:
Ten Chemistry
 Two Pharmaceutical
 One Physics
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0
(25)Toray
(19)Solvay
(50)Chevron
(40)Celanese
(42)Asahi
(9)Degussa-Huls
(45)Honeywell
(15)Mitsui Chem
300
(24)Clariant
350
(26)Ciba
(28)Union Carbide
(12)Elf Aquitaine
(27)Rhodia
(13)Sumitomo
(8)Akzo Nobel
(17)Aventis
(18)GE
(44)Roche
(38)Air Products
(23)Mitsubishi
(10)BP Amoco
(31)Rohm&Haas
(33)Monsanto
(4)Dow Chem
(7)Shell
(3)Bayer
(6)ICI
(22)DSM
(1)BASF
(5)ExxonMobil
(36)Novartis
(2)Dupont
Chemistry Communities
Top 32 Firms:
Total Chemistry Communities
450
400
4 Companies over 200
9 Companies over 100
250
17 Companies over 50
200
150
100
50
Relationship Between Chemical Sales and
Number of Chemical Research Communities
Number of Chemical Research Communities
500
400
r2 = 0.85
Slope = 15.3
300
Novartis
200
r2 = 0.95
Slope = 7.2
100
groups
significantly
different (P<.001)
by Tukey Test
0
0
5
10
15
20
Chemical Sales ($b)
25
30
35
The Relationship Holds Using log Scales
log Total Chemistry Communities
2.8
r2 = 0.73
2.6
Novartis
2.4
2.2
r2 = 0.87
2.0
1.8
1.6
groups
significantly
different (P<.001)
By Tukey Test
1.4
1.2
0.4
0.6
0.8
1.0
1.2
log Chemical Sales
1.4
1.6
Conclusions on Chemical Sales and
Number of Research Communities
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There is a definite correlation between
chemical sales and number of research
communities for the 32 firms participating
in research communities
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Two strategies: one group participates in twice
as many communities as the other
For the Global Top 50, there are three
strategies including a minimal participation
in research communities
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Three degrees of absorptive capacities
Speculation on Three Levels of
Absorptive Capacities
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Minimal participation = r&D approach
Improvement is necessary for the future
 Achieved through internal focus
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1X participation = R&D approach
Invention is necessary for the future
 Balance between internal and external
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2X participation = R2&D approach
Innovation is necessary for the future
 External focus because world of science is
much bigger than we are
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Science Strategy Conclusions
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An examination of the Global Top 50 Chemical
Firms through the Science Model® reveals
some very interesting information on
diversification and research strategies in
chemistry
 Broad set of Diversification Strategies
 Three Science Strategies within Chemistry
Acknowledgement
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Data from Center for Research Planning