MASTER OF BUSINESS ADMINISTRATION

2020-22

Term – IV
2021-2022

B2B Marketing C
Group Assignment 2
XIAMETER
Course Instructor

By:

On
12/08/2021
What factors were responsible for Dow Corning's poor performance between 1995 and
2001? (3 marks – 300 words)
Looking at Dow Corning's revenues and net income figures, we notice a stagnation starting
from 1996 followed by a sharp decline in the income in 1997, with a recovery in the
following year still stagnating and slowly declining in the following year. The following
factors were responsible for Dow Corning's poor performance between 1995 and 2001:
 Low Differentiation and Commoditization – Silicone was used in various industries,
including aerospace, automobiles, computers and electronics and others. Certain
industries like electronics and aerospace were in search of innovation-driven
suppliers, but in industries such as consumer DIY and paper and pulp processing, the
product was becoming difficult to differentiate and was being highly commoditized.
 Increased Competition – The company was facing competition on two ends, with
global competitors exploiting the scale efficiencies and small regional players with
minimal R&D costs undercutting Dow Corning's product offerings.
 Changing Environment – The overall environment in the 60 years of operations has
changed drastically with consumers becoming more aware and access to multiple
avenues. Dow Corning not being able to adapt to the changes is one of the major
reasons for the poor performance.
 Changing Customer Preferences – The customer preferences were changing, and
Dow Corning was not able to alter its strategy to suit its customers' needs. Due to
this, Dow Corning was unable to serve one of its major segments, the price-sensitive
customer.

What did the new segmentation reveal about the customers? (2 marks – 150 words)
Dow Corning's new segmentation based on a 'needs basis' revealed four major segments
present across categories:
 Innovative Solutions – The segment that engaged in joint development work with
Dow Corning's R&D arm. Included the early adopters and global companies.
 Proven Solutions – The segment that relied on the supplier's advice, with no
resources to invest in R&D. The products included the one's currently available with
Dow Corning in well-established applications.
 Cost-effective Solutions – This segment relied on Dow Corning's vast product and
application knowledge to improve manufacturing productivity, reduce production
time or reformulate the finished products.
 Price Seekers – The segment that included experienced customers looking for lower
prices and ease of doing business.

Xiameter delivered on the aspiration of Dow Corning by being a successful model.

However, towards the end of the case, it is stated that the imitating competitors have
emerged and are offering an expanded range of products beyond silicone. Should
Xiameter now expand its limited range of products to include all the varieties of Dow
Corning silicones? Provide EITHER point to support the expansion OR points against
expansion. (3 marks – 300 words)
Yes, Xiameter should expand its range of offerings beyond silicone; the following points
support the argument.
 Increasing Competition - The competition in the silicone segment is increasing, and
with imitating competitors in the market, it will become difficult for Xiameter to
 sustain itself in the market with its present positioning. The competitors in the
market are offering a wider range of products along with no minimum order terms,
which can prove to be fatal for the company in the longer term.
 Supply-side Issues - The costs of raw materials required for the production of
silicone fluctuate on a daily basis, due to which the prices of the main product
fluctuate. Due to this, the prices often times overshoot that of Dow Corning's,
making the market unstable.
 Leveraging Logistics Network – Xiameter or Dow Corning has a very robust supply
chain network in place. This network can be leveraged to provide an expanded range
of products through the same platform and distribution network.
 Low Risk of Cannibalization – Since the product range includes non-silicone based
products, this will minimize the risk of cannibalization, as was seen in the earlier
case.
 One-Stop-Shop – Xiameter can be marketed as a one-stop-shop for various industrial
product needs and thus will help generate traffic and, in turn revenue for both the
categories.

Should Xiameter positioning be changed from "Dare to compare" – a dilemma Dow

Corning is facing towards the end of the case? Provide two reasons to justify your take. (2
marks – 150 words)
Xiameter, in our opinion, should change its positioning from 'Dare to Compare' as it is not
sustainable in the long run.

 Eroding Monopoly – Xiameter being the first mover in the online markets for
silicone products, operated in a monopolistic market and reaped the benefits of the
same in the initial years. Due to the entry of competitors in the online segment, such
as GE silicones with its website MySilicones and other regional players offering
similar benefits, the same advantage is eroding.
 Non Sustainability – The current market proposition of Xiameter of offering the
lowest prices is not sustainable in the long run. As depicted in the case, the instances
where the prices often times are higher than that of Dow Corning's contradicts the
same. Moreover, the proposition does not provide Xiameter with a differentiating
factor when compared with its competitors.