9. Speciality Businesses Flashcards

1
Q

What is a Business-to-Business company?

A

A company (such as a speciality company) that sells its products to a secondary business.

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2
Q

What is a Business-to-Customer company?

A

A company that sells its product to the end consumers, often sourcing its materials from other suppliers.

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3
Q

What is the model of a speciality company?

A
  1. Engage with customers
  2. Create innovative products that meet customer needs
  3. Make the product quickly and to a high standard
  4. Sell the ingredients directly to customers
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4
Q

What are the 3 main focuses of CRODA?

A
  • Growth
  • Innovation
  • Sustainability
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5
Q

What are 3 Megatrends in the chemical industry at the moment?

A
  • Health and wellbeing
  • Feeding the planet
  • Living sustainably
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6
Q

What are two technology trends in the chemical industry at the moment?

A
  • Moving to biologics
  • Sustainable ingredients
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7
Q

What is a speciality chemical?

A

A chemical that sits between the extremes of a commodity product and fine/performance chemicals. Often they are multicomponent products.

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8
Q

The volume of a commodity chemical is ____ whereas the volume of a speciality chemical is ___.

A

High
Low

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9
Q

Is the manufacturing equipment dedicated or multi-purpose for commodity and speciality chemicals?

A

Commodity: Dedicated
Speciality: Multi-purpose (so machines can be adapted to different requirements)

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10
Q

The flexibility of a commodity chemical company is ___ whereas the flexibility of a speciality chemical company is ____.

A

Low
High

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11
Q

The price of a commodity chemical is ___ whereas the price of a speciality chemical is ____.

A

Low
High

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12
Q

What is the price model for commodity chemical companies?

A

Cost-plus

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13
Q

What is the price model for speciality chemical companies?

A

Value-added

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14
Q

The profit margins of a commodity chemical are ___ whereas the profit margins of a speciality chemical are ____.

A

Low
High

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15
Q

The life cycle of a commodity chemical is ____ whereas the life cycle of a speciality chemical is _____.

A

Long
Short

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16
Q

________ chemical companies provide higher customer support than ________ chemical companies.

A

Speciality
Commodity

17
Q

What are the departments of CRODA?

A
  • Commercial
  • Technical
  • Operational
  • Financial
  • Cultural
18
Q

What is the focus of a speciality commercial department?

A
  • Sales and marketing
  • Focus on understanding customer needs
  • Fast response times to customers
  • Nurture relationship with the customer
19
Q

What is the focus of a speciality technical department?

A
  • Translate customer needs into products
  • Patent and protect technology
  • Continual innovation
  • Technical link to customer
20
Q

What is the focus of a speciality operational department?

A

Managing the following sectors
- Cost (high)
- Flexibility (multipurpose)
- Technology (patented)
- Workforce (skilled)

21
Q

What is the focus of a speciality cultural department?

A

A customer-focused culture.

22
Q

What is the focus of a speciality financial department?

A

Giving good returns for the shares that customers buy.

23
Q

Define cost

A

How much it costs you to produce/manufacture a product.

24
Q

Define price

A

How much you are selling the product for.

25
Define value
How much the customer is prepared to pay for it.
26
Give the equation for profit margin
27
Give the equation for % margin
28
Describe profit margins graphically
29
Give the equation for contribution
30
Describe negative margins graphically
31
What is the best way to price an item?
Just below the customer value. At this price, the customer feels like they're getting a good deal (while the company still makes a profit) so may buy more. Setting it at the market value is also a good strategy but the customer may be more hesitant/negotiate.
32
How is the price set using the cost-plus method?
33
How is the price set using the value-added method?