Generating a Model of International Markets Development (Case Study: Petrochemical Products)

Abstract

Objective The petrochemical industry is greatly significant because it can increase the connections between the domestic economy and the country's petroleum sector. It can also direct Iranian economy from a crude energy seller to an exporter of valuable products. The petrochemical industry has different conditions in road and marine transportation and it is impossible to pose senctions in this area due to the variety of products and customers. On the other hand, petrochemicals, such as oil, do not have traceable export bases and massive tankers. However, the vulnerability of the petrochemical industry to sanctions will be reduced as long as Iran moves towards the actualization of converting primary products into various end products. It will lead to greater foreign exchange earnings. In this regard, Iran can minimize the opposition of petrochemical sanctions by relying on the export of polymer products. The purpose of this study was to provide a model of various factors affecting the development of international markets for petrochemical products. Methodology To achieve this goal, the factors were identified using a qualitative mixed approach i.e., the grounded theory. For this purpose, 20 petrochemical industry experts were interviewed to collect data. Findings As a result, 106 concepts were identified, which were divided into 21 categories and 6 dimensions. Price factors, influential groups, export manager capability, geographical factors, host company’s conditions, competitive conditions, production factors, product characteristics, and finally the company's strategy and status were identified as causal factors. In addition, 5 macroeconomic factors, governmental policies, export regulations, industry-related factors, and macro-export factors were extracted as contextual conditions. Three strategies of technology leadership, market leadership, and cost leadership were also identified. The consequences and results of the development of international markets were also defined into two categories of brand image and financial performance. Moreover, the company’ life and organizational culture were recognized as interfering factors. Consequently, the development model of international markets was proposed. Conclusion Considering the difficult economic conditions in today's world, most markets have established a dynamic nature, which requires companies to constantly strive to improve their organization. Particularly, more effort is required in response to the changing needs of foreign customers. International sanctions is regarded as one of the most important sources identified in the field of governmental policy. Reviewing the sanctions imposed on Iran shows that different aspects of the economy are the target of sanctions in terms of consumption, income, production, import of goods and services, and etc. Exports (oil and non-oil) is one of the targets of sanctions, which can have a paramount place according to the conditions of Iran. None of the countries producing and owning petrochemical industry can produce and replace about 25 million tons of petrochemical exports like in Tehran. Besides, it is relatively impossible for other countries such as Saudi Arabia and the United Arab Emirates to replace Iran.

Keywords

• export
• international market development
• cost leadership strategy
• price factors
• export challenges
• macroeconomic factors