Analysis of Dsm Melamine

DSM Melamine (DMM) forms part of Royal DSM Group, an organisation that has shifted focus during its existence from a coalmining company, through to a petro-chemicals business and ultimately a commodities and specialties company.

Royal DSM has very mature business strategy policies and procedures, with initiatives that include:-

• CSD's - Corporate Strategy Dialogues (1994). Occurring every three years and focussed on the overall corporate strategy

• BSD's - Business Strategy Dialogues (1992). Also occurring every three years, BSD's were managed by the individual business units, but had to align to CSD's

• VBBS - Value based business steering (2000). VBBS analysed and monitored how the implemented strategy resulted in economic value creation (de Wit Meyer 2010)

• SVC's – Strategic Value Contracts (2002-3). These were performance-based incentives, ensuring alignment between strategy and performance.

In the initial period after CSD's and BSD's were introduced, DMM was able to manage its business as an individual unit that could adapt to changes within the Melamine industry. Their initial 1992 BSD saw them relocate a manufacturing plant from the Nederland's to Indonesia allowing closer proximity to the Asian marketplace. This move was ultimately highly successful despite reducing the melamine production capacity for the three years it took to relocate. However, this strategy would likely not have been permissible after VBBS was introduced.

DMM's 1995 BSD saw them introduce their "actively maintain" strategy, designed to keep them as global leaders in terms of market share, technology, cost and image. This saw them invest in building smaller plants, with advanced technology and simpler processes – short-term investments for long-term financial rewards.

DMM's