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Dow Chemical: The Very Tricky Strategy
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Dow Chemical: The Very Tricky Strategy

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Herbert Dow was a young entrepreneur who was selling bromine. Even in those old times, he had competitors – and quite smart ones! However, Dow had a tricky strategy that would allow him to reverse the field.

To enter an international market was the dream of a young entrepreneur named Herbert Dow, who founded the Dow Chemical company in 1904. Its main business was purifying and selling bromine, which was used in the production of bleaches.

The Dow Chemical Company Prices

US enterprises were buying this product at 36 cents per pound. However, a German monopolist syndicate was selling the same stuff at 49 cents in the international markets

The Dow Chemical Company and the British Market

When the entrepreneur risked entering the British market, German competitors decided to drive the cocky upstart into bankruptcy. They offered their product at 19 cents per pound in the US market – way less than the cost of production. This move should have KO’d Dow and made him forget not only international expansion, but also the US market.

Dow Chemical: Trading in the US

Rather than giving up, Dow Chemical stopped trading in the US. Instead, it began purchasing German products through third-party buyers. The quality was great, and there were no production costs.

Dow Chemical Products - Cheaper than Other European Offers

Re-branded chemicals were shipped overseas, where they were selling at 27 cents per pound, which was way cheaper than other European offers. Somebody had dug their own grave, and it was definitely not Dow.

Becoming successful thanks to your wits and turning an inevitable loss into a victory? This is the definition of a winning strategy that, together with competitive arrogance, makes up a successful enterprise.


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Published on
November 6, 2017