Methanex: Developing Strategy in a Commodity Industry
(9 pages of text)
Methanex, the world’s largest producer of methanol, was a $2.5 billion global company based in Canada. Top management at Methanex undertook a quarterly risk review that included a systematic review of corporate strategy and the competitive landscape in the methanol industry. The review’s primary objective was to identify organizational risks and opportunities and to develop appropriate strategic responses for both short-term profits and long-term growth. Methanex’s CEO needed to prepare strategic recommendations and an action plan to present to the board of directors at the next quarterly risk review meeting.
The case is suitable for all levels of students. It deals with core strategic management issues in a novel context. The major themes to the case are developing strategy in a commoditized industry, defining and understanding strategic risk, and understanding sources of sustainable value creation. Discussion of the case applies Porter’s five forces industry analysis model and the concepts of strategic analysis to a commodity firm. This analysis can also extend to corporate strategy development and risk assessments.
Mining, Quarrying, and Oil and Gas Extraction
Canada, Large, 2013
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