Obviously, to resolve the above mentioned questions, something must be done to coordinate different subsidiaries among various countries. If the KCP and the KCI remain current status, the problems would see nothing but increasingly worsening situations. Subsidiaries in other countries would get independent and their managers would gradually ignore the principles and benefits of KCP in the US market. Besides, instead of cooperating with each other to achieve mutual progress, subsidiary companies would become strong competitors, which can reduce the competitive power of KCI. Thus, the best solution to the long existing problems was reorganizing the KCP and KCI. With a merger, KCP and KCI would become an integrated group, within which, prices, products and markets could be well balanced; meanwhile, there would be no need in getting approval from managers of two levels, thus saving time and improving working efficiency.
Secondly, based on the previous two attempts, Kent can draw on previous experience to achieve a better performance. It could be told from its two attempts that merger would be an inevitable trend for Kent Chemical. The first trying of Kent was to appoint three global business directors (GDBs), responsible for consumer-products, protection products and medical plastics respectively. Although it turned out not so effective and had caused some disputes between regional managers and GDBs, it awakened Kent Chemical to the fact that the move of reorganization would be necessary. Learning from this experience, in 2007, Kent chemicals took another move, which was to form world boards consisted of managers from both domestic and international businesses. The world boards would be responsible for making plans and strategies for all the Kent companies throughout the globe. However, influenced by the failure of 2006 boards, regional managers did not show a favorable attitude towards this new attempt, as a result of which, it went through a hard period of time and failed again.
As far as I am concerned, these two failures can provide Kent chemicals with great reference for a new move of integration and merger. Facts proved that many issues of Kent required a reorganization. The two attempts just evidenced that merger was actually the inevitable trend. However, the failure also suggested that the unification in policies and operations did not workable in Kent Chemicals. Differentiation in specific operations could help relieve this problem.
Thirdly, it was also suggested by the consulting committee that Kent Chemical should take differentiated strategies in different countries, and that a global control would be needed. Kent Chemical dealt with three kinds of products, including consumer products, medical plastics and fire control products. In terms of consumer products, as consumer needs, distribution channels and competition vary from country to country, the company should be managed locally; but as for the medical plastics business, their customers were mainly composed of multinational companies, and constant innovation in products and worldwide control in operations were needed. Regarding the third one, fire control products, it should be organized both regionally and globally. The clients of fire control products were international corporations, but the product sourcing turned out quite regional. On the basis of product categorization, the consultants put forward the solution that the company should develop into a more differentiated one using the “decision matrix”.
According to the analysis of professional consultants, strategies should be tailored for certain markets and meanwhile, they can also vary from products to products, from country to country. Therefore, in my opinion, a global integration of KPC and KCI would be necessary, and under this premise, the Kent Chemical should be managed with tailored strategies. While key issues and decisions are made and implemented globally, specific strategies can be carried out according to the local market situations, by combining the features of its products.
Lastly, an integration can strengthen the competitive power of Kent Chemical. In light of the increasing intense competition in both domestic and foreign markets, the merger of Kent can enlarge its influence, and meanwhile, boost its ability in response to potential risks. As it was true that Kent Chemical Products saw a decline in sales volume in the local market, it needed greater support from foreign markets. There was another thing that had to be considered for Morales. There might be quite a number of potential entrants in the industry, which could challenge their position. And with the quickened pace of internationalization and globalization, large companies were also seeking cooperation to enhance their power and achieve mutual benefits as well. Corporations doing businesses globally would be able to use resources to the maximum extent. In line with such a market trend, Kent was also urged to take some measures in order to adapt to the rapidly changing market and society. Thus it is safe to say that the merger of KCI and KCP would ensure more competitive edges for Kent Chemicals, allowing it to rival its opponents with sufficient backup support. The move of merger would be a move in conformity with market trend.