This is a structured product launch case that requires candidates to evaluate market attractiveness, pricing strategy, and profitability while incorporating sustainability considerations. The case tests both financial analysis skills (market sizing, cost-benefit calculation) and strategic thinking around value creation through carbon credits and environmental benefits.
Your client is ChemCo, a global manufacturer of Chemical specialties based in the UK with profits of approximately $200M. Although Petrochemical solvents are necessary in paint formulators, they are a source of CO2 emissions, represent a safety hazard (they are flammable) and, also, a health hazard to operators and painters.
ChemCo has recently developed an innovative chemical ingredient that paint manufacturers can include in their formulations allowing them to eliminate all Petrochemical solvents from their formulation and replace them with water.
Chemco’s CEO has hired you to understand whether it is a good idea to proceed on commercializing the product.