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I. DISCUSSION QUESTIONS, CASE INTRODUCTION AND KEY POINTS Introduction The case centers around Great Lakes’ production of lead additives which are detrimental to the environment and human health. Great Lakes has enjoyed high sales and profits since its acquisition of Octel in 1989. Currently Great Lakes has $5B in revenues. Of its $439MM in profits, Octel accounts for 59% with high sales in developing economies in Africa, the Middle East, Asia, and Latin America. Octel is extremely profitable because of its quasi-monopolistic position (90% market share) due to high barriers to entry and competitors exiting the lead additives business. In 1997, Bromine division manager Ellie Shannon is faced with increasing worldwide pressure from environmental groups. Great Lakes must weigh the pros and cons and determine if it will: continue to supply lead additives for the foreseeable future, halt production of lead additives without considering the consequences to developing countries, or aggressively phase out its participation in the lead additives marketplace while also lobbying developing countries’ governments to change policies and switch to unleaded gasoline. Summary of key learning points and strategic issues 1. Understanding the challenges and risks associated with an environmentally destructive product 2. Balancing profits and social welfare while managing pressure from environmental groups 3. Foreseeing and adapting to radical shifts in demand. Preparing for risks of market shrinkage. 4. The role of the government in setting business restrictions 5. Adjusting business-level strategy in light of uncertainty. Discussion Questions 1. Perform a STEEP analysis to understand the general environment facing Great Lakes. How will Great Lakes be affected by external factors? 2. Use Porter’s Five Forces Model to analyze the lead additives industry in the US. Given this analysis, is the industry attractive or unattractive? 3. Using the 3I’s framework determine Great Lakes’ immediate, impending and invisible competitors. How does Great Lakes measure up against these competitors? 4. What are the main capabilities of Great Lakes? Does Great Lakes have a core competence? 5. Create a SWOT analysis to understand Great Lakes’ strengths and weaknesses. Does Great Lakes have a sustainable competitive advantage in the additives industry? If so, what is the source? What about Great Lakes’ evolution and current business strategy may pose problems going forward? 6. After reviewing Exhibit 2 regarding Great Lakes’ goal, vision, mission, and values do you believe that TEL is misaligned with Great Lakes’ statements? Why or why not? 7. Evaluate the options that Ellie Shannon faces with regards to Great Lakes’ Tetra-ethyl lead (TEL) business. Discuss the pros and cons of each. What is your recommendation for Great Lakes (justify using information from the case and after having considered alternatives)? G R E A T   L A K E S
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This note was uploaded on 03/22/2011 for the course ACCT 3391 taught by Professor Turpin during the Spring '10 term at Troy.

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