BASF SWOT and PESTLE Analysis

Strength

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Weakness

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Opportunity

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Threat

1. Corporate Governance and Compliance: BASF is into the business of chemicals, production materials and agricultural solutions mainly, and these sectors of businesses come under heavy government regulations and compliance issues. Although, BASF has a specific code of conduct which forms the core of their compliance program and they have more than 33,500 participants in compliance training and they conducted around 75 internal audits last year. Their code of conduct takes care of many activities like money laundering, corruption, conflicts of interest, protection of data privacy and anti-trust legislation. But since these businesses are always under government’s radar and bound to international regulatory changes, it is difficult to have a fixed strategy to deal with these requirements and this puts BASF and other such organizations to be always ready and prepared to handle such intricacies. These requirements sometimes may drain the organizations of their resources and money which could have utilized elsewhere.

2. Competition from other major players: There are many companies who are giving a tough competition to BASF like Syngenta, FMC, Exxon Mobil, SABIC and Bayer. They might be behind BASF in terms of revenue by a large number; however, given the dynamics of the sector, anything is possible. Also, with a lower threat of new entrants because of economies of scale, the existing players still make it even more difficult to capitalize against each other. In every business markets of BASF, there is always another big player to dilute the market capitalization of BASF e.g. in India, TATA Chemicals is a big threat for BASF as it has almost 10 times the assets than BASF, other companies like Vinati Organics have more than 40% of market capitalization than BASF and also there are companies like Guj Flouorchem which has twice the net profits that BASF made in last year.

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Political

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Economic

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Social

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Technological

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Legal

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Environmental

1. Sustainable growth to tackle climate change: Throughout the years there have been expanded worries over the ecological impacts of the oil business. The ecological effects of oil are chiefly negative. This is because of the danger of oil which adds to air contamination, corrosive downpour, and different ailments in people. Oil likewise impacts climate change, because of the expanded ozone harming substance discharges in its extraction, refinement, transport and utilization phases. Different oils and oil related items have distinctive dimensions of toxicity. Despite fluctuating dimensions of lethality among various variations of oil, all oil - inferred items affect human wellbeing and the ecosystem. In the extraction stage there are emanations of carbon dioxide as well as different toxins like nitrous oxides and aerosols. The ignition of oil causes an expanded measure of carbon dioxide discharges just as other ozone depleting substances. With such concerns, many associations like EU have implemented their policies for sustainable development to ensure protection of environment. Paris Climate Change Agreement also has been signed by 195 countries which shows the importance each country gives to safeguarding of environment. BASF has been recognized as global leader in corporate climate action and water security. Their purpose is to create chemicals for a sustainable future which in itself speaks about the commitment of the firm towards sustainable practices and they have also aligned their operations with the Sustainable Development Goals set by United Nations.

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