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What I like
about Dow Corning is their Innovative approach to new products and
technology.
Technical formulator, Skin Care and Beauty Sector. |
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It is a
well known, reliable company. Their products provide an added value and various
physical properties.
Major Chemical Manufacturer, Korea |
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"Xiameter provides Univar the ability to simplify the supply
challenges for standard silicones. With streamlined logistics, we are able to
offer companies JIT, one stop shopping for silicones as well as their other
chemical requirements. This approach ensures that customers can continue to
receive quality silicone products along with the additional services they have
come to appreciate from Univar."
Terry Hill. Univar’s Sr. Vice President and Chief Commercial Officer.
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“In 2002, Dow Corning discovered that many customers
experienced in silicone application no longer needed technical services; they
needed basic products at low prices. Since the current business model was based
on high-priced, innovative product and service packages, it had to develop a
fundamentally lower cost structure dependent upon a new IT system that would
offer a standardized, self-service option for its customers. XIAMETER was born.
XIAMETER … went on to become a major transformative success. Beforehand, Dow
Corning had had no online sales component; now 30% of sales originate online,
nearly three times the industry average.”
Harvard Business Review, December 2008 ‘Reinventing Your Business Model’.
Authors: Mark W. Johnson, Clayton M. Christensen, Henning Kagermann
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“Even at a time when few people are seen during the workday without
some sort of communications deviceclutched in their hand, attached to their ear
or strapped to their belt, there are still a few companies out there that think
buying materials via the Web is just a little too futuristic. However, the
volatility of many different raw material markets is making some manufacturers
change their minds, as the ability to have up-to-date pricing information can
prove to be increasingly beneficial. In an attempt to stay ahead of the curve,
Dow Corning started a Webbased offering called Xiameter in 2002 to help
enable customers to purchase its silicon-based products in bulk, directly off
the Internet."
IndustryWeek, November 1, 2008 ‘Straight to the Source’ Author: Nick
Zubko
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“I chose Dow Corning because they are an innovative supplier.
They're products are applicable to a lot of different formulas.”
Leading supplier in the automotive sector
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“Some companies have even created growth by introducing new
business models. For example, about five years ago Dow Corning created
Xiameter, a low-cost, online-only distribution channel for commodity silicones.
Xiameter went from an idea to a viable business in nine months; three months
after launch Dow Corning's entire investment had been paid off.”
IndustryWeek, October 8, 2008 ‘When the Going Gets Tough, the Tough Get
Innovating’ Authors: Scott D.Anthony, President and Joseph V. Sinfield, Senior
Partner, Innosight
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“Excellent technical services. Comprehensive products. Professional
item examinations.”
Major Chemical Distributor. China
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“The Xiameter story shows that established, mature companies can
succeed at accelerating innovation by leveraging the unique resources at their
disposal to beat out nimble, disruptive entrants. The key to success is
recognizing that new disruptive growth represents a distinct challenge from
growing the core business, and that processes, tools and resources must be
customized accordingly.”
Forbes.com, September 8, 2008 ‘From Strategy to Execution:
Turning Accelerated Global Change into Opportunity (excerpt). Authors: Mark
Johnson and Josh Suskewicz.
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“Dow Corning has always given quality products with no issues.
I work in quality and that is the biggest deal for me.”
Engineer, Electronics Industry
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“Xiameter has been a blockbuster success. As we note in the
introduction to The Innovator's Guide to Growth: "In six short months,
Xiameter went from ideation to test market. Three months later it launched in
full. Three months after that, Dow Corning's entire investment had been
paid back. In a year, Dow Corning went from an idea to a successfully launched
business."
Forbes.com, April 1, 2008 ‘A Playbook for Moving Down Market’
Author: Scott D. Anthony
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“People in the same industry said that if you wanted to use good
silicon oil, you must choose Dow Corning because its quality was
good.”
Technical formulator, Silicone Oil sector. China
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“Specialty chemicals giant Dow Corning caught its competitors
by surprise in 2002 when it launched Xiameter, a Web-based discount sales
channel whose mandate was to bring in new business as well as retain
cost-conscious customers who were fleeing their traditional, high-touch
relationship with the company.
XIAMETER® Brand: What the Experts Say
Throughout the industry, profit margins for many mature products had been
declining for nearly a decade; the strategy that Dow Corning and its
competitors had taken to date was to add yet more services to their offerings
as a vehicle for boosting margins. By contrast, Xiameter adopted what looked
like a radical tactic: Dow Corning customers could bulk order some of the
parent company's most established products without the premium prices that
reflected added services.
Some industry analysts saw this as suicidal. A two-tiered pricing system,
they argued, would undermine Dow Corning's core business; purchasers of
premium-priced products—available for a lower price through the Xiameter
channel—would think they were being overcharged and would clamor for a better
deal. To date,however, Xiameter has been a clear winner: It paid back its
original investment to the parent company in just three months.The story of
Xiameter's development and early existence offers valuable lessons not only
about the importance of reading the signs that an industry has reached a
strategic inflection point but also about how an industry leader can manage the
inherent tensions between its established business and the low-end disruption
it creates to further grow its business.”
Harvard Business School Online, March 7, 2005 ‘Dow Corning's Big
Pricing Gamble’ Author: Loren Gary
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