RESEARCH AND DEVELOPMENT AT ICI Case Study Solution
Anthaquinone (AQ) has an agent that used to reduce the pollution in the form of carbon emission in the effluent of a pulp mill. The production of AQ used the distilling coal tar, which is the byproduct of coke production at a steel works, such as tin and other packaging materials. That is why the demand of AQ is highly dependent on the demand for steel. In the year 2010, the research division of ICI discovered the new but the un-patentable use of AQ in the company in order to reduce the air pollution in the form of carbon emission in the effluent of a pulp mill. This new discovery will be useless without the use of company’s own process to synthesize AQ. For this purpose, the company needs to have modest effort on research and development of AQ process. After putting the effort on research and development of AQ process in the company, this decision should be forwarded that would be further sent for the approval from the board of directors of ICI.
Benefits and Risks of Anthaquinone(AQ):
While considering the decision to develop the process, it is merely needed for the company to synthesize Anthaquinone(AQ) to identify and understand the associated benefits and risks.
- If the development process of synthesize Anthaquinone (AQ) getssuccessful, the project will generate the positive NPV for the company, which will help to increase the shareholders’ wealth between the 12.5 million dollars to 37.5 million dollars.
- If the company gets success in developing the process to synthesize Anthaquinone(AQ) in the company, the ICI might enjoy the first mover advantage in the industry to reduce the carbon emission level to the environment by promoting and using the corporate social responsibility.
- The production of AQ used the distilling coal tar, which is the byproduct of coke production at a steel works such as tin and other packaging materials. If company gets the success in development of the AQ process in order to increase the AQ production by using the synthesis would help the company to continue to develop additional uses for AQ.
- The major risk associated with the development of synthesize Anthaquinone(AQ) process is the consideration of uncertainties at the each stages of the AQ development process………………..
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