DuPont SWOT and PESTLE Analysis

Strength

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Weakness

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Opportunity

1. Role of digitalization in innovation: Digitalization is playing a major role in innovation in many industries, including chemicals. Digitalization is expected to increase revenues, enhance EBITDA margins by 9% and reduce costs. Many companies are already using mobility and IoT, whereas machine learning and blockchain are expected to be major disruptors in chemical industry. DuPont’s Advanced Materials division featured its stretchable electronic inks for wearable electronics at the 2017 Wearable Expo Japan. These products help in enabling digitalization of textiles. Companies like Holst Centre, GM Nameplate, MAS Holdings, FeetMe and Body+ featured their wearable products that used these electronic inks.

2. Growth of specialty chemicals industry in emerging markets: Specialty chemicals are a niche category of the chemicals industry, offering special polymers and chemicals having performance improvement capabilities. They have applications in many industries like retail, oil and gas, consumer goods, textile and printing. The specialty chemicals industry is poised to grow exponentially due to various factors like new applications increase in innovation, rising demand for safe chemicals, and concerns about the environment. North America used to be the largest market for specialty chemicals, but the rising demand for niche chemical products in emerging markets, especially Asia, has led to major chemical companies moving their manufacturing bases to these locations. The economic downturn has led to decreased growth in developed markets whereas Asian markets like China, Korea and India, as well as non-Asian emerging markets like Brazil are seeing high growth due to new growth opportunities through product customization, growing middle class population that demands improved crop quality, low cost of labor, supportive governments and efficient manufacturing capabilities. DuPont’s specialty division has also capitalized on this trend by focusing its strategy on emerging markets. For instance, in 2018, the company announced a plan to build a specialty materials manufacturing plant in East China.

3. Focus on innovative platforms in secular growth markets: 5G connectivity market is estimated to be worth $6 billion with a projected 50% CAGR. Dupont is well positioned to compete in this market due to its manufacture of unique highly engineered materials enabling faster connectivity, partnerships with major consumer electronics OEMs and years of experience of creating new industry performance standards. Micro biome health is estimated to be a $5 billion market with a projected 20% CAGR. Dupont is well positioned to compete in this market due to capabilities in microbial technology and health & nutrition, growing pipeline of new products and external partnerships to speed up implementation. Automotive electrification is estimated to be a $6 billion market with a projected 10% CAGR. Dupont is well positioned to compete in this market due to leadership in electronics auto infrastructure value chains, presence of portfolio targeting unmet needs like light weighting, safety, thermal management & connectivity, and AHEAD development capabilities comparable to industry partners.

Threat

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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. Sustainability initiatives in the chemical industry: The market for green chemistry is expected to be valued at $100 billion worldwide by 2020. The North American green chemistry market is expected to grow from $3 billion to $20 billion by that time. This growth is essential because 8.3% of deaths and 5.7% of diseases worldwide are due to chemical exposure. The growing attention on sustainable chemistry has led to public expectations of more responsibility from chemical companies to ensure safety. Dupont, despite being a target of multiple environmental lawsuits, is trying its best to contribute to sustainability. The company is the founding member of the World Business Council for Sustainable Development. One initiative by the company was to become the first company to sustainably harvest seaweed for making its products. The company’s sustainability initiatives were recognized in 2018 when it was included in the FTSE4Good Index Series, which was created by FTSE Russell to measure the environmental, governance and social practices performance of companies.

2. Delivering world-class performance in safety, resource efficiency and environmental protection: In today’s resource constrained world, it is necessary to operate sustainably in order to do business. Dupont was founded on the core values of safeguarding the workforce, environment and local communities. The company is making efforts to reduce its impact on environment, including water, energy and waste optimization. The company’s businesses are implementing measures to reduce greenhouse gas emissions. The company is entering into strategic partnerships in order to implement circular production models to optimize the use and reuse of resources. The company plans to expand environment protection initiatives to its supplier, partners and distributors in order to ensure complete coverage of the supply chain. The company recently became a member of the Sustainable Purchasing Leadership Council, whose mission is supporting and recognizing procurement leadership to ensure a sustainable future.