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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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