IMD-3-1117

INTERNATIONAL v. 29.07.2003

Purchased by Anna Vermolen for use on the INTRAPRENEURSHIP, at KU Leuven - Faculty of Economics and Business (Antwerp, Brussels, Kortrijk, Leuven).
INTERNAL ENTREPRENEURSHIP AT THE DOW

Usage permitted only within these parameters. This PDF may not be reproduced, stored in a retrieval system, or uploaded to any LLM (e.g. ChatGPT).
CHEMICAL COMPANY

Professor Bala Chakravarthy The e-epoxy.com venture was not just a business decision; it was also
prepared this case with the an expression of my business philosophy. I believe in encouraging
research assistance of Hans entrepreneurship and supporting internal entrepreneurs whenever I

Taught by Prof. Dr. Bart Leten, from 31-Mar-2024 to 30-Jun-2024. Order ref F506932.
Huber as a basis for class can. The e-epoxy.com idea was an entrepreneurial one. It had some
discussion rather than to risks for sure, but it also had enormous upside potential. Moreover, it
illustrate either effective or had a champion in Ian Telford, who brought visible energy and
ineffective handling of a enthusiasm to the project.
business situation.
Robert (Bob) Wood, Thermoset Business Group President
Educational material supplied by The Case Centre

In 2002 The Dow Chemical Company was a leader in science

Copyright encoded A76HM-JUJ9K-PJMN9I
CoursePack code C-6023-524951-STU

and technology, providing innovative chemical, plastic and

agricultural products to serve many different consumer markets.
Its merger with Union Carbide in 2001 rocketed the company’s
sales to $27.8 billion and made it the largest chemicals and
plastics company in the world. However, just a few years earlier,
in 1998, Dow Chemical’s turnover had dropped to $18.4 billion
after having been flat for the past four years at around $20
billion. Net profit margin had also dropped to 7.1%, from a high
of 10.3% in 1995. Growth became a priority for the company.

The e-epoxy.com venture was one of several new growth

initiatives launched in 2000. The primary targets for e-
epoxy.com were small customers and spot market customers,
whom Dow Chemical had never served before. Although it was
a minuscule contributor to the company’s turnover, Wood felt
that e-epoxy.com and other similar growth initiatives were vital
to the future success of the company. Despite the surge in
growth brought about by the merger with Union Carbide, there
could be no letting up on the company’s growth initiatives.
Entrepreneurship would have to be strengthened within the
company. Wood wondered what lessons the e-epoxy.com
venture offered in this regard.

Copyright © 2003 by IMD - International Institute for Management

Development, Lausanne, Switzerland. Not to be used or reproduced without
written permission directly from IMD.

case centre Distributed by The Case Centre All rights reserved e [email protected] t +44 (0)1234 750903 or +1 781 236 4510 w www.thecasecentre.org
 INTERNATIONAL
LAUSANNE – SWITZERLAND
-2- IMD-3-1117

The e-epoxy.com Venture

Epoxy Products and Intermediates (EP&I)

The Epoxy Products and Intermediates (EP&I) business division designed,

produced and sold epoxy resins that went into the manufacture of electrical

Purchased by Anna Vermolen for use on the INTRAPRENEURSHIP, at KU Leuven - Faculty of Economics and Business (Antwerp, Brussels, Kortrijk, Leuven).
laminates, composites (reinforced plastics), adhesives and coatings. It had a

Usage permitted only within these parameters. This PDF may not be reproduced, stored in a retrieval system, or uploaded to any LLM (e.g. ChatGPT).
turnover of just under $1 billion in 2000. (Refer to Exhibit 1 for organization
chart from mid-2000.) The EP&I global business was managed from Dow’s
European headquarters in Horgen, Switzerland until May 2000 when its vice
president, Henry Vermaak, retired.

Epoxy was a specialty, high margin, but highly capital-intensive, business for
Dow Chemical. The top 20% of its customers generated 80% of the division’s
revenues. These key accounts were all global customers. The biggest accounts

Taught by Prof. Dr. Bart Leten, from 31-Mar-2024 to 30-Jun-2024. Order ref F506932.
typically purchased epoxy products worth $35 million to $50 million per year.
Dow Chemical supported these key accounts with quick deliveries through
integrated supply chains, technical assistance and rebates on the volumes
purchased. The rest of the division’s revenues came from smaller customers, who
were served by distributors. Within each country, a distributor usually sold the
entire range of Dow Chemical products, including epoxy. Dow Chemical
provided technical help to the distributor in determining epoxy specifications to
Educational material supplied by The Case Centre
Copyright encoded A76HM-JUJ9K-PJMN9I

suit various applications.

CoursePack code C-6023-524951-STU

The epoxy business was cyclical in nature. Capacity utilization was becoming a
problem. The division’s epoxy plants were large and typically had capacities in
the range of 30 ktpa (kilotons per annum) to over 100 ktpa. Future plants were
planned to be a minimum of 80 ktpa in size. There was a growing need to bring in
new customers and serve them economically.

Philippe Raynaud de Fitte, the commercial director for Europe at that time, was
the sponsor of EP&I’s global Commercial Interface Initiative (CII) in 1998. The
first tangible idea implemented under CII was the EpiCenter. A customer could
call this center for commercial and technical queries on epoxy products. If the
query was on the status of an order, the call would automatically be switched to a
commercial person who had total responsibility for the order from the time it was
placed until it was delivered. Technical queries would go to a technical person,
who had access to the company’s top scientists. The EpiCenter was helped by
computer models, which allowed the technical team to diagnose and solve
customer problems online. By closing several regional European sales offices and
centralizing commercial and technical inquiries within the EpiCenter, the division
was able to free up resources. Using these resources, customer account executives
(CAEs) were appointed to service key large accounts. Once the EpiCenter and the
CAE were in place, there was an obvious third opportunity: the un-addressed
space shown in the diagram below.
 INTERNATIONAL
LAUSANNE – SWITZERLAND
-3- IMD-3-1117

Customer Account
High Executive (CA E)

Cost of Epi
EpiCenter
Servicing

Purchased by Anna Vermolen for use on the INTRAPRENEURSHIP, at KU Leuven - Faculty of Economics and Business (Antwerp, Brussels, Kortrijk, Leuven).

Usage permitted only within these parameters. This PDF may not be reproduced, stored in a retrieval system, or uploaded to any LLM (e.g. ChatGPT).
Un-addressed Space
Low
Low High
Importance of Customer to Dow

Taught by Prof. Dr. Bart Leten, from 31-Mar-2024 to 30-Jun-2024. Order ref F506932.
The dot.com Revolution and the Inspiration for e-epoxy.com

By 1998 the dot.com revolution was starting to overwhelm many established

industries. The chemical industry felt its shock. Electronic marketplaces such as
Educational material supplied by The Case Centre

ChemConnect, Plasticsnet and the like threatened to disrupt the business models
Copyright encoded A76HM-JUJ9K-PJMN9I
CoursePack code C-6023-524951-STU

of old-style chemical companies. In response, Dow Chemical organized training

programs about the Internet for its key employees in places like Palo Alto,
California.

One of the participants in the 1999 program was Ian Telford, European sales
director for EP&I. He had joined Dow Chemical in the UK in 1984 as an inside-
sales representative, after two separate year-long stints at other UK companies.
Telford left the UK in 1991 and moved up through Dow Chemical’s commercial
organization, eventually working for de Fitte in 1999. Three other colleagues from
Europe joined Telford on the training program at Palo Alto. They noted the
skyrocketing share prices of the dot.com companies with envy, and momentarily
thought of forming an Internet start-up of their own. However, they quickly
concluded that perhaps they did not have the necessary investment capital and risk
profile. Mike Kolleth, manager of Dow.com, and one of the Palo Alto four,
recalled:
We brainstormed a lot and concluded that what drove our passion for the Internet was the
prospect of making a lot of money. If we could not grab the opportunity for ourselves, we
could certainly do it for Dow Chemical. If the Internet turned out to be mere hype, there
was still a short-term opportunity to make some capital gains; and if it was for real, Dow
Chemical would have proactively adapted its business models before they became obsolete.

Telford came back from Palo Alto fired up with the idea of creating a dot.com
presence for the EP&I division. He saw the un-addressed space that de Fitte had
identified as the perfect place to position his idea. He told de Fitte:

In order to grow our business we have to look at other segments. There are customers out
there who just want the product with no frills, no tickets to the ball game, no technical
service, no consignment stock, nothing--they just want a low price. And the pressure on
prices will increase across all segments once electronic marketplaces start functioning fully.
 INTERNATIONAL
LAUSANNE – SWITZERLAND
-4- IMD-3-1117

Raw materials like epoxy resins will increasingly be bought on a spot market basis. We
have to deal with this.

In addition to his existing job, Telford volunteered to investigate the Internet

effort for the division, and de Fitte agreed.

Purchased by Anna Vermolen for use on the INTRAPRENEURSHIP, at KU Leuven - Faculty of Economics and Business (Antwerp, Brussels, Kortrijk, Leuven).
Selling e-epoxy.com inside Dow Chemical

Usage permitted only within these parameters. This PDF may not be reproduced, stored in a retrieval system, or uploaded to any LLM (e.g. ChatGPT).
Exhibit 2 provides a timeline of the e-epoxy.com venture. In November 1999
Telford made a first presentation of the venture to the Epoxy Leadership Team
(ELT). The new channel would have three key features: (1) orders had to be in
multiples of half-truck loads, (2) only selected epoxy products would be offered
online, and (3) contractual terms were fixed and not subject to negotiation. There
was little enthusiasm for the project. Of the 12 ELT members, only three were in
favor of the venture. The corporate Information Systems (IS) group at Dow

Taught by Prof. Dr. Bart Leten, from 31-Mar-2024 to 30-Jun-2024. Order ref F506932.
Chemical objected to the idea. They were ready to launch a Dow Chemical
extranet website called MyAccount@Dow to help customers track their orders
and monitor their accounts. The IS group was also exploring partnerships with
other industry suppliers to create a common commercial platform on the web. One
such B2B hub, Omnexus.com for plastics, was getting ready for launch. (Refer to
Exhibit 3 for the positioning of the e-epoxy.com concept, compared with the other
two IS initiatives.)
Educational material supplied by The Case Centre
Copyright encoded A76HM-JUJ9K-PJMN9I
CoursePack code C-6023-524951-STU

There were also problems with the proposed posting of product prices on the e-
epoxy.com portal. Traditionally the price of EP&I products was never made
public. It was subject to negotiation and thus differed from client to client. The
division’s global marketing managers argued that since they were judged on the
profitability of the division, price transparency would potentially limit their
negotiating ability with key accounts, and thus hurt their performance. Henry
Vermaak, the then business VP for EP&I, was chairman of the ELT. He recalled:

Each business was rushing with its own Internet ideas. The e-epoxy.com venture was ours.
The ELT was very concerned that e-epoxy.com would confuse and upset our existing
customers. The proposed price transparency was a big concern. We had different prices in
different geographies. This would be compromised as well. I saw the venture as a viable
experiment, a new channel that could reduce our cost to discover and serve new customers.
But I also had my doubts. I would call myself a concerned supporter.

With Vermaak’s help, Telford finally prevailed. He received $100,000 to research

the idea further and build a prototype for demonstration. He was given until the
end of March 2000 to come up with a business plan.

Pricing in the New Channel

Telford sought the help of external consultants. However, given his meager
budget he had to leverage them wisely. He recalled:

One of our mottoes was “Think Big, Start Smart, Scale Fast.” We got a lot of help from our
consultants. I got quite a bit of it for free, because of the company’s long-standing
relationship with them or the promise of new business. When you are leading a venture,
don’t take no for an answer and negotiate everything.
 INTERNATIONAL
LAUSANNE – SWITZERLAND
-5- IMD-3-1117

Telford proposed pricing epoxy products on the web higher than the net price
after volume discounts that were available to the key accounts of the EP&I
division. However, to give himself some flexibility Telford included a “promo-
code” on the e-epoxy.com portal. This code allowed him to offer special
promotional prices, targeted at particular countries, products or customers, and
limited by pre-specified time windows. Usually, e-mails would be sent to selected
accounts to inform the user of the special prices.

Purchased by Anna Vermolen for use on the INTRAPRENEURSHIP, at KU Leuven - Faculty of Economics and Business (Antwerp, Brussels, Kortrijk, Leuven).

Usage permitted only within these parameters. This PDF may not be reproduced, stored in a retrieval system, or uploaded to any LLM (e.g. ChatGPT).
As for distributors, they would effectively charge a higher price than that posted
on the e-epoxy.com website. However, Telford reasoned that they should be able
to do so because of the additional services that they provided, such as a wide
product palette, technical assistance, credit terms, rush orders and smaller orders.

Telford realized that he not only had to make the business rules for e-epoxy.com
distinct but he also had to enforce them strictly. Only then could he protect the
relationships that the EP&I division had with its existing customers or distributors

Taught by Prof. Dr. Bart Leten, from 31-Mar-2024 to 30-Jun-2024. Order ref F506932.
and reduce channel conflict.

e-epoxy.com Pricing vs. Pricing for Different Accounts

Educational material supplied by The Case Centre
Copyright encoded A76HM-JUJ9K-PJMN9I
CoursePack code C-6023-524951-STU

A B C D E F G H I J K L M N O P Q R

Net price acc. Promo price floor E-epoxy price

Note: A-R represent different accounts

Setting the Scene for the March 2000 Meeting

Telford had tested the prototype of the site and put together a good business plan.
However, as was his wont, he wanted to do something dramatic to push home the
importance of his venture. He started a rumor via e-mail two weeks before the
March meeting, claiming that a major competitive announcement was in the
offing. The rumor had a leading chemical distributor, two major chemical
competitors and an Internet company coming together to form a virtual company
called Epoxies-R-Us.com. In order to add credibility to the story, Telford roped in
a well-known consultant and a major customer to send e-mails, one stating: “I am
going to be interviewed by Biz TV this Sunday. It is about a major new industry
announcement. What do you guys know about this?” Not wishing to leave
anything to chance, Telford also circulated a spoof FT.com article on this new
announcement. E-mails started flying, with mounting suspense over the Biz TV
 INTERNATIONAL
LAUSANNE – SWITZERLAND
-6- IMD-3-1117

announcement and interview that weekend. Telford volunteered to have the show
taped and flown in from the UK.

Telford had already arranged to have a spoof broadcast video-taped using his
friends as stand-ins for a news anchor, a financial analyst, the CEO of the new
Internet company and even an actual customer! A video-taped copy of the
supposed Biz TV announcement and interview was rushed to the ELT meeting,

Purchased by Anna Vermolen for use on the INTRAPRENEURSHIP, at KU Leuven - Faculty of Economics and Business (Antwerp, Brussels, Kortrijk, Leuven).
only a week prior to the meeting that would decide the fate of e-epoxy.com.

Usage permitted only within these parameters. This PDF may not be reproduced, stored in a retrieval system, or uploaded to any LLM (e.g. ChatGPT).
While somewhat realistic, the video advertised rather loudly that it was a spoof. It
had too many references to Dow Chemical and talked about a precipitous drop in
the company’s share price that had never happened. Nevertheless, it momentarily
fooled the ELT members who watched it. Their reactions were mixed. Some
thought it was funny--vintage Telford. Others thought it was juvenile. Luckily not
much harm was done. However, Telford decided to stop a similar stunt that was
planned for the US ELT members later that day. Vermaak recalled:

Taught by Prof. Dr. Bart Leten, from 31-Mar-2024 to 30-Jun-2024. Order ref F506932.
People knew Ian’s style. They expected him to do something “different.” Ian has a
tendency to poke people to get a reaction. He sometimes oversteps the line, because some
folks don’t understand his sense of humor. I have coached him privately on this. Yes, the
video tape annoyed me. There was no need for these antics. But it did serve as a wake up
call. The majority of the ELT became positive towards his venture.
Educational material supplied by The Case Centre
Copyright encoded A76HM-JUJ9K-PJMN9I
CoursePack code C-6023-524951-STU

Getting Top Management Commitment

Telford obtained the approval of the ELT and was promised a budget of $1 million
to pursue the venture further. However, after a mid-2000 company-wide
reorganization, Bob Wood had taken over as the new Thermoset group president
and began reorganizing the division. Telford’s venture, together with others, was
put on hold. In the meantime, Vermaak had retired from his position as business VP
for EP&I and was replaced by Phil Cook, a seasoned global manager with extensive
experience in the epoxy business.

Telford feared that with the delays his venture would lose part or all of its early-
mover advantages. He now had two new layers of management to reconvince. The
first opportunity came when Wood and Cook called a meeting in May 2000 in
Houston to explain their ideas for re-energizing the EP&I business. Telford spoke
passionately to the group about his e-commerce initiative. The managers present
were asked to prioritize the five critical projects for the division, and gave
Telford’s venture the top vote. With Cook’s intervention, Telford managed to
arrange a meeting with Wood for de Fitte and himself. Recalling that intervention,
Cook observed:

I heard about the idea for the first time in April 2000. I saw two advantages to the project.
First, there were all these bizarre projections on what the Internet would do to our business
model. I wanted to be ahead of the change curve and not become a victim of it. Second, I
saw e-epoxy.com as a great option in good times. We could use the site to auction our
production that was not tied by long-term contracts. In a down cycle, we could use the site
to find alternative customers to soak up our idle capacity. Frankly, this was an inexpensive
way to set up another channel. Even though the IS community was pushing Omnexus, Ian
was only asking for $1 to $1.5 million. The venture was inexpensive.
 INTERNATIONAL
LAUSANNE – SWITZERLAND
-7- IMD-3-1117

When Telford and de Fitte met Wood in an airport hotel in Chicago to explain the
whole venture, Wood made a few suggestions, but approved it. Recalling that
meeting, Wood observed:

What I was looking for was not just a great idea but also the level of energy among the
people sponsoring the idea. It has to be visible and high. Prior to my meeting with Ian and
Philippe, I had a private conversation with Phil and Henry and I knew that the business was

Purchased by Anna Vermolen for use on the INTRAPRENEURSHIP, at KU Leuven - Faculty of Economics and Business (Antwerp, Brussels, Kortrijk, Leuven).
enthusiastic about the idea. The IS group was also sold. Frankly, I did not need a whole lot

Usage permitted only within these parameters. This PDF may not be reproduced, stored in a retrieval system, or uploaded to any LLM (e.g. ChatGPT).
of data. The key was Ian’s enthusiasm and drive for results. While the business idea was
important, I was betting on the entrepreneur. I had to look him in the eye and see if he had
fire in his belly.

Putting e-epoxy.com on the Track to Success

On August 1, 2000 Telford became the head of the new venture with a small

Taught by Prof. Dr. Bart Leten, from 31-Mar-2024 to 30-Jun-2024. Order ref F506932.
increase in salary, and gave up his higher profile sales director’s job. Working
with a very tight budget, Telford managed to hire three people and launch e-
epoxy.com on January 29, 2001, on-time and under-budget.

Co-Opting the Corporate IS Department

Educational material supplied by The Case Centre
Copyright encoded A76HM-JUJ9K-PJMN9I

Tracy Teich, the IS director assigned to Wood’s Thermoset business, recalled her
CoursePack code C-6023-524951-STU

involvement with the e-epoxy.com project:

Our big effort in the summer of 2000 at corporate was to have a standard and global IT
response to the Internet. Our big fear was fragmentation and incompatibility. As an IS
director attached to a business, my role was to be a supporter of the business priorities. It
was my job to sell our CIO on the e-epoxy.com venture and get his approval. That would
buy me credibility with the business.

The strength of the e-epoxy.com venture was that Telford had a well-articulated
position. He had thought through this complementary channel, and had clearly
defined business rules. He had a credible story and he told it well. Telford was
also a model customer. He respected all the IS rules. He took great care in
preparing the initial specifications and there were no major revisions as the project
progressed. He met all the IS requirements, on time, every time. Some of the best
IS architects volunteered for the project. Telford recognized their work and
praised their efforts. When he received his first order, he took the trouble to call
the IS team. This gave them instant ownership of the project. The system
developed was not scaleable, and it also needed more robust back-up and
recovery. However, the e-epoxy.com venture did manage to cut some corners and
keep costs low.

Building the Right Team

Telford’s team consisted of John Everett, Aranxta Olivares and Isabelle Lomba.
All three were looking for a change in assignment. Telford recalled how he had
hired Olivares:
 INTERNATIONAL
LAUSANNE – SWITZERLAND
-8- IMD-3-1117

I was in Cuba on a holiday. Aranxta called. I told her, look I have this marketing job for
you. It does not have a description, level or title as yet. It is risky. I don’t know whether our
venture will survive or not or even if I will survive to be your boss. To my utter surprise,
she wanted to join. She said that she was intrigued by the idea and saw it as a great learning
opportunity. I knew instantly that she was right for the job. Others who joined were also
risk takers.

Purchased by Anna Vermolen for use on the INTRAPRENEURSHIP, at KU Leuven - Faculty of Economics and Business (Antwerp, Brussels, Kortrijk, Leuven).
When asked what would have happened if the venture had failed, Telford

Usage permitted only within these parameters. This PDF may not be reproduced, stored in a retrieval system, or uploaded to any LLM (e.g. ChatGPT).
acknowledged:

I think my career would have taken a hit. But I was not worried about that. I was more
concerned with the experience to be gained and the future of my team members. Even
though they volunteered to take on this risky assignment, I tried to develop “escape routes”
for all of them. Given the high visibility that the venture had, I made sure that team
members were placed in positions where senior executives would notice them if the worst
came to the worst.

Taught by Prof. Dr. Bart Leten, from 31-Mar-2024 to 30-Jun-2024. Order ref F506932.
The team bonded easily, and enthusiastically pursued the task of launching the
business, a mere 90 days after they were hired. Everett, who had worked closely
with Telford from the beginning of the e-epoxy.com project, commented on
Telford’s leadership style:

Ian has rich experience of the industry and deep marketing insights. He has exceptional
Educational material supplied by The Case Centre
Copyright encoded A76HM-JUJ9K-PJMN9I

ability to understand stakeholders and dance around minefields of vested interests. He is an

CoursePack code C-6023-524951-STU

all-rounder. His strength is his breadth of grasp, but this is not superficial. He talks to all
stakeholders, fully understands their concerns. However, this does not mean that he seeks
OK from every one of them.

The Launch

The January 29, 2001 launch covered the US and Europe. The day of the launch,
Telford sent an e-mail to 110 people thanking everyone who had helped,
including tax, legal, technical and accounting people and, most importantly, the
corporate IS department. On September 19 a global launch, with nine different
languages and web pages, followed. The e-epoxy.com portal was now available
everywhere apart from Australasia, India and China. The remaining countries
were scheduled to join soon, but language and currency issues still had to be
solved. Recalling the glitches that his team faced in trying to go global, Telford
talked about the Brazilian launch:

We had simplified our business model in Latin America and insisted on payment only in
US dollars. Our legal staff told us eight days before the launch that we had to advertise on
the web in Brazil in the local currency, Reais. We were asked to stop our launch and redo
our website. I decided against it, mainly because it would have cost $150,000 and delayed
our global launch by three months. Moreover, we looked at the website of Varig, the
national airline of Brazil. They were advertising in US dollars! Why not us? I told the team
to press ahead and I would take the blame. I am sure we annoyed our lawyers with our
stubbornness. When you are dealing with something new like the Internet, past history and
rules are not always helpful. We have to be out in front and take some risk.

Once the website was set up, an advertising campaign was started. The advantage
of being a first (or very early) mover was that people in the industry were eager to
 INTERNATIONAL
LAUSANNE – SWITZERLAND
-9- IMD-3-1117

hear the business story. Telford became a much sought after speaker at chemical
industry conferences, speaking at twelve different events around the world in
2001. The more free publicity Telford could get, the better it was for his venture.
This was not always appreciated by the corporate IS department. Teich recalled:

When Ian started talking about Dow Chemical’s e-business that was a bit scary. But he was
always well informed, told the e-epoxy.com story well, and never generalized from it.

Purchased by Anna Vermolen for use on the INTRAPRENEURSHIP, at KU Leuven - Faculty of Economics and Business (Antwerp, Brussels, Kortrijk, Leuven).

Usage permitted only within these parameters. This PDF may not be reproduced, stored in a retrieval system, or uploaded to any LLM (e.g. ChatGPT).
Performance

The e-epoxy.com venture became EBIT positive in the fourth quarter of 2001, less
than a year after its launch. By late 2002 e-epoxy.com revenues were still small,
but the business was consistently EBIT positive because of strict cost control and
low running costs. Sometimes, a customer would have to be contacted on the
telephone to clarify and confirm the order. Incoming orders were entered in Dow

Taught by Prof. Dr. Bart Leten, from 31-Mar-2024 to 30-Jun-2024. Order ref F506932.
Chemical’s internal SAP system, which then triggered the documentation and
subsequent physical delivery from the plant to the customer. The system was not
seamless, but it appeared so to the customer. Nearly 75% of the customers were
new, with importers making up the bulk of them. The sign-on area of the site had
1,800 addresses, and around 300 accounts had been registered by March 2002,
40% of which had purchased more than once on the site.
Educational material supplied by The Case Centre
Copyright encoded A76HM-JUJ9K-PJMN9I

The e-epoxy.com business was projected to become cumulative EBIT positive in

CoursePack code C-6023-524951-STU

2003. Since the IT investments had all been expensed when they were incurred,
this meant that the venture pay-back was just over two years.

Reflections on the e-epoxy.com Venture

In March 2002 Telford handed over the e-epoxy.com business to his assistant,
John Everett. He was promoted to business director for Glycerine, Acrylic
Monomers & Epoxy Specialties, working directly under Cook. When asked
whether he was leaving the venture too early, Telford remarked:

The big challenge for me was getting the venture through at Dow Chemical. I spent six to
nine months getting approval and then building a global business in an area where nobody
had any experience. That was the real challenge. After that the next mountain to climb was
the first quarter 2001. We had to prove the concept. When customers we never had before
started contacting us we knew we had a success on our hands. We achieved break-even in
the fourth quarter of 2001. I am leaving the venture in good shape and in good hands. I will
never forget the team spirit we generated and the mixture of hard work and hard fun we had
together. I have now been given a bigger challenge, turning around four struggling
businesses.

Henry Vermaak, the business VP for EP&I when the venture was first deliberated,
gave the following assessment:

Ian was successful because he took the initiative, became computer savvy quickly, and
leveraged the IS support from Dow Chemical very well. Once the idea of e-epoxy.com was
approved, Ian was the only choice to drive it.

Mike Kolleth, one of the Palo Alto four, recalled:

 INTERNATIONAL
LAUSANNE – SWITZERLAND
- 10 - IMD-3-1117

Ian is always one step ahead of the organization. It may not even be a full step, just half a
step, but he is in front. Somebody with a better business idea probably would not have been
able to bring such a diverse group of people together and to drive the idea through the
required approvals of the business team. More than his idea, Telford deserves credit for his
execution skills.

Chris Teulings, supply chain director and a member of the ELT, echoed this view:

Purchased by Anna Vermolen for use on the INTRAPRENEURSHIP, at KU Leuven - Faculty of Economics and Business (Antwerp, Brussels, Kortrijk, Leuven).

Usage permitted only within these parameters. This PDF may not be reproduced, stored in a retrieval system, or uploaded to any LLM (e.g. ChatGPT).
Ian did two things particularly well: great lobbying and building a very motivated team. In
both Ian is a master. The concept he sold was reasonable, not strong, but Ian handled it
pragmatically. He adjusted his concept constantly to overcome resistance and gain support.

Recalling his role as a sponsor and Telford’s supervisor, de Fitte observed:

I don’t think alone. I absorb the ideas of others. I believed firmly in the e-epoxy.com
model, and persuaded my bosses of its merits. I am not necessarily a radical like Ian, but

Taught by Prof. Dr. Bart Leten, from 31-Mar-2024 to 30-Jun-2024. Order ref F506932.
perhaps a closet-radical. I admired Ian’s guts. But I did feel tired of the new surprises that
Ian would bring. This was creativity out of control, a sign of some immaturity. I tried to
round off the abrasive side of Ian. I hope I succeeded.

Cook elaborated on his role in nurturing entrepreneurship:

I see my role as one of opening doors and providing air cover. I believe in consciously
Educational material supplied by The Case Centre
Copyright encoded A76HM-JUJ9K-PJMN9I

setting up an organization outside the mainstream, headed by a dedicated champion. To me

CoursePack code C-6023-524951-STU

a corporate entrepreneur in Dow Chemical is like putting sand in an oyster and coming out
with a pearl. I think it is important to give the aggressive entrepreneur opportunities earlier
in his/her career.

Highlighting the importance of the senior executive’s role in nurturing

entrepreneurship, Wood noted:

It is the senior executive who should connect a venture proposal to a big strategic
opportunity for the company. It is key to spend a lot of time in the front end of the venture,
to sit down and discuss the data, the idea, suggest what the timing for the investment should
be, what group of people should be involved in the project, ask a number of questions,
check the enthusiasm of the team, ensure that they are agile and make sure that they are
getting data from actions and not necessarily waiting for all the final details to make a
decision and then to act. We have to learn to make decisions in that zone of discomfort.

Some entrepreneurs would rush to go from A to B, knocking down barriers, any obstacle in
the way. But it takes a lot of energy to knock down obstacles. It may be smarter to go
around this obstacle. That might be the more effective way to achieve results. I have to give
very authentic feedback on what I see. That is the only way I can help in the rounding
process of the entrepreneur. I also try to ensure that the context in which the entrepreneur
functions keeps changing so that there is a new opportunity to test his/her skills.
 INTERNATIONAL
LAUSANNE – SWITZERLAND
- 11 - IMD-3-1117

Exhibit 1
The Dow Chemical Company
EP&I Commercial Organization Chart 2000

President & CEO

Purchased by Anna Vermolen for use on the INTRAPRENEURSHIP, at KU Leuven - Faculty of Economics and Business (Antwerp, Brussels, Kortrijk, Leuven).

Usage permitted only within these parameters. This PDF may not be reproduced, stored in a retrieval system, or uploaded to any LLM (e.g. ChatGPT).
Functional VPs

Business Group President 7 Other Business Group Presidents

Thermosets
Bob Wood

ELT EP&I Business VP

(Epoxy Leadership Phil Cook 3 Other Business VPs

Taught by Prof. Dr. Bart Leten, from 31-Mar-2024 to 30-Jun-2024. Order ref F506932.
Team) (Henry Vermaak till May 2000)

4 Functional Heads
IS (Tracy Teich),
Supply Chain (Chris Teulings),
Operations, HR

3 Business Directors: Comm. Director Comm. Director Comm. Director Comm. Director
• Commodities
Educational material supplied by The Case Centre

Europe North America Asia Latin America

• Specialties
Copyright encoded A76HM-JUJ9K-PJMN9I

P. Raynaud de Fitte** P. Martinez-Fonts G. Daley A. Martelli

CoursePack code C-6023-524951-STU

• Composites

Sales Business
Initiatives Marketing

Sales Director Europe Commercial EpiCenter Global MM Powder/

Dariusz Wozniak (EU) Marine/ Protective
CSC Manager Coatings
Reiner Schumacher Pepe Carnevale
Sales Manager
EE/MEAF/India Global MM Pack/
Heinz Christen e-epoxy.com Team* Auto/ Photo Coatings
Carlo Spaniol
Ian Telford (Leader)
John Everett (Sales)
A.Olivares (Marketing & LAA) Area MM
I. Lomba (Systems & Sales) Christophe Marché

* Telford headed this group till March 2002. Everett took over from him and the e-epoxy.com
team was moved under sales. Telford became Business Director (Specialties).

** De Fitte became Global Business Director (Commodities) for EP&I in May 2000. J.A. Merino
replaced him as Commercial Director for Europe and North America.

Source: Company information

 INTERNATIONAL
LAUSANNE – SWITZERLAND
- 12 - IMD-3-1117

Exhibit 2
Event Timeline for e-epoxy.com

November 1999 The e-epoxy.com idea is presented to Epoxy Leadership

Purchased by Anna Vermolen for use on the INTRAPRENEURSHIP, at KU Leuven - Faculty of Economics and Business (Antwerp, Brussels, Kortrijk, Leuven).
Team (ELT)
$100,000 granted for

Usage permitted only within these parameters. This PDF may not be reproduced, stored in a retrieval system, or uploaded to any LLM (e.g. ChatGPT).
consultancy, business
plan and prototype

March 31, 2000 ELT approves e-epoxy.com plan

Reorganization
within Dow

Taught by Prof. Dr. Bart Leten, from 31-Mar-2024 to 30-Jun-2024. Order ref F506932.
May 2000 Houston meeting

June 2000 Telford and de Fitte meet Wood; venture approved

Educational material supplied by The Case Centre
Copyright encoded A76HM-JUJ9K-PJMN9I

Some IT work
CoursePack code C-6023-524951-STU

outsourced to
Accenture &
other ASPs

August 1, 2000 Telford starts as full-time head of e-epoxy.com

November 2000 3 people join team

January 29, 2001 e-epoxy.com launch in the EU and US

More than 100 articles

written on e-epoxy.com;
presentations at 12
conferences

September 19, 2001 Global launch

Source: Company information

 Educational material supplied by The Case Centre
Copyright encoded A76HM-JUJ9K-PJMN9I
CoursePack code C-6023-524951-STU

INTERNATIONAL
LAUSANNE – SWITZERLAND
- 13 - IMD-3-1117

Exhibit 3
A Comparison of Dow Chemical’s Web Offerings

www.e-epoxy.com
• Product palette • Vested supplier • 8 products on offer
• Rush orders commitment • Longer lead-times
• Consignment stock • Full customer service (variable)
• Flexible payment terms • Dedicated sales force • Penalties for changes
• Cheque collection • Supplier technical support • Penalties for late payment
• Language • Consistent source of supply • Fixed payment terms
• Entertainment • Multiple supplier sourcing • 20MT or 10MT (bulk, bags)
• Local storage • 24/7 Order convenience • No phone, only e-mail
• Tech service • Price comparison utility • 24/7 availability
• EPI center/ personal help • Neutral, global entity • Newsletter by e-mail
• Training • Breadth, depth of product • No paper
• Samples line • No contracts, rebates,
• Price protection: 16 months administration
• Price changes in writing • Promotion codes
• Contracts/ Rebates/ Admin. • Spot price, no price
• Travel to customer’s premises protection

Source: Company records & Omnexus brochure

Purchased by Anna Vermolen for use on the INTRAPRENEURSHIP, at KU Leuven - Faculty of Economics and Business (Antwerp, Brussels, Kortrijk, Leuven).
Taught by Prof. Dr. Bart Leten, from 31-Mar-2024 to 30-Jun-2024. Order ref F506932.
Usage permitted only within these parameters. This PDF may not be reproduced, stored in a retrieval system, or uploaded to any LLM (e.g. ChatGPT).