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Teaching Note Details:
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Opec Plastics: Growing with Vietnam  
 
Product Ref: 16/576/TN Company: Opec Plastics

Product Type: Teaching Note Industry: Capital Goods
Consumer Goods
Materials

Related Product(s): Case
At the end of 2013, the leadership of Opec Plastics was pleased with their young companyˇ¦s growth to nearly $200 million in revenues. ?They had goals to double that in two more years, but were uncertain on how to accomplish this. ?They had technical expertise in manufacturing plastic bags and related products and trading the raw materials (resins) from which the products were made. ?Yet, they regarded their core competencies in a more general way: strong relations with people who mattered, in the supply chain, in the regulatory environment, and in financing. ?The growth options included:
ˇE Expansion within existing business lines through scale increases.
ˇE Scope expansion to products and services near to their existing activities.
ˇE More distant scope expansion to products and services that were not near to their existing activities but still presented opportunities.
ˇE Expansion along the vertical value chain.
Layered on these issues was the external environment. ?The prospects for Southeast Asian trade agreements and the Trans Pacific Partnership created new opportunities along the value chain. ?However, the vagaries of oil prices (the basis for plastics prices), threatened additional uncertainties.
Functional Area : Economics & Business Policy
Strategy & General Management

Learning Objective: 1.Understanding generic growth options, such as horizontal (scale and scope) expansion, vertical (backwards and forwards) integration, and conglomerate expansion (unrelated expansion)
2.Understanding how the value chain (or value net, a la Brandenburger and Nalebuff) influences the expansion options a firm has
3.Understanding a firmˇ¦s core competencies and how these influence its expansion options
4.Identifying and evaluating the risks and benefits of various growth options
5.Identifying and evaluating external factors that can impact growth strategies
6.Using a firmˇ¦s financial statements to evaluate the ability of a company to sustain growth and finance expansion strategies
7.Drawing inferences about how growth strategies may vary between a developing economy such as Vietnam and a developed economy such as the USA
Length: 14 pages Country: Vietnam (Socialist Rep. of)

Pub. Year: 2016 Level of Difficulty: 3
         
This product type is available in the following language(s):      English
         
Related Information: N/A
 
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