Apex Executive Team

Apex executive's team is currently at an impasse as to which compound the company should invest, and bring to market because of it limited resources. That said the executive team needs to collectively agree and needs to look at the current opportunities through a consent lens. The first thing that must be established is to set a baseline to further reach a consensus as to what innovative strategy Apex should employ.

Apex executives must agree on want is going to be the best overall corporate growth strategy that will leverage Apex's organizational strengths, resources, and capabilities while minimizing its threats and business model risks that their competitors and/or potential competitors could use to take advantage of stealing its market share and profitability.

Based on the limited information provided Apex lacks the resources to launch both compounds products at the same time and as a result the executives are going to have to reach an agreement.

The importance of the decision cannot be overlooked as 25% of Apex total revenues are stigones revenues ($15M) are their sales are currently declining by 10% a year, therefore Apex revenues are expected to decline by $7.9M over the next five years.

Apex has developed two compounds that are ready to bring to market, compound A-115 which is an electrolysis agents and compound B-227 which is a plastic oxidizer commonly known as prednigones. Both of these compounds serve different markets. The two markets are at different stages in their product lifecycles and their market structures are so dissimilar that Apex will not be able to achieve a competitive disruptive business model that result in it obtaining a competitive advantage. They must choose.

Apex current revenues of stigones in the plastics oxidizer are steadily declining as customers are switching to prednigones. Stigones have reached the harvest and exit stages of the product life cycle, and are being replaced by prednigones compounds. Apex needs to select a strategy that will maintain the firm's ability to generate profitability over the long term. In order to achieve this goals Apex executive need to link and match its product offering with its current business model. Apex has built a business model and organizational strengths that have been successful in the plastic oxidizer market. Apex business model has been successful at making it a market leader in the industry. Apex has built a strong brand image in that industry sector, if Apex doesn't launch the B-227 to replace its declining market share it will no longer be able to leverage its brand advantage in the plastics oxidizer industry.

Apex compound B-227 would be a product line extension in Apex current market. Apex executive are concerned about their customers viewing Apex launch of prednigones (B-227) as a "me-too" strategy and response to their declining sales of stigones. If the marketing plan is communicated well this "me-too" concern is likely over-stated. It may well be that customers will easily accept Apex B-227 and view it positively, as Apex stigones is not fully meeting their needs any more. Prednigones must be a superior product than stigones as stigones sales are declining. Apex can launch B-227 and then market itself as a full line plastic oxidizer supplier reducing the ''me-too'' concern.

With 37.5% of the plastics oxidizer market share Apex has the ability to regain a dominate market position by extending its product line to include B-227. There is little risk in launching the B-227 and I strongly recommend that Apex do so. The B-227 market is 2 ½ the times of the A-115 market (ie. $25M vs $10M), and the profit margins are similar. The plastic oxidizer market has reach maturity but the prednigones sector is experiencing growth at the stigones