In the course of the module on the business environment in Europe, we are writing this report to give the reader more detailed background information on the plastics industry. Our goal is to demonstrate the competitiveness of the plastics industry and of plastics as a material.
Discussing various topics ultimately compiled in a STEEP analysis, we intend to develop our goal and provide the reader with a better understanding of the plastic industry. We will illustrate how the market is structured by helping the reader develop a feeling for the functioning of the micro- and macroeconomics of the industry and how trade between the triad regions is organized. By means of the SWOT analysis we take a closer look at the competitiveness of plastics as a material. The reader will also be informed about the industry's contribution to sustainable development including environmental protection, economic development and social progress and how plastics can be used and reused innovatively. .
Finally, we want the reader to discover things he has not known and/or expected before and gain knowledge which is of relevance for him personally and in a business context. .
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1. The Industry.
Market Structure.
The European manufacturing industry is an important sector of the chemical industry; it is the second largest industry in Europe.
When looking at the major players in the industry, it is quite obvious that the plastic industry is an oligopoly. There are seven big companies that supply the major part of plastics consumed in the whole world. The products are mostly homogenous; there are also special types of plastics only one firm offers. The behaviours of the companies depend on each other, as far as prices but also specialisation on products is concerned. Entry in the plastic industry is not easy because large production plants are needed and economies of scale make production efficient. It would not make sense for small companies to start producing plastic, without being able to realize economies of scale.