Entity Dossier
entity

Dupont

Strategic Concepts & Mechanics

Cornerstone MoveSell Abroad Before Selling at Home
Capital StrategySupplier Credit as Venture Capital
Signature MoveCopy the Machine Then Outrun the Patent
Competitive AdvantageFraud-Proof Packaging as Market Maker
Strategic PatternDeveloping World as First-Best Customer
Signature MovePatriarch Approves Accounts Until Death
Cornerstone MoveKill the Cash Cow to Feed the Tiger
Cornerstone MoveRent the Razor, Sell the Paper
Competitive AdvantageTwenty-Year Technical Lead as Moat
Signature MoveSecrecy So Total Hotel Staff Cannot Clean
Signature MoveOpen Door Cancels Any Meeting for a New Idea
Signature MoveOffshore Commission Architecture as Dynasty Shield
Cornerstone MoveBuy the Entire Milk Chain from Udder to Shelf
Decision FrameworkNon-Family Crisis Manager as Dynasty Insurance
Competitive AdvantageService Guarantee as Lock-In Mechanism
Identity & CultureDynasty Tax Drives Every Structural Decision
Operating PrincipleDisciplined Imagination Over Pure Invention

Primary Evidence

"The dairies did not buy the machines, but rented them for a relatively low cost. Tetra Pak made money instead by charging production royalties and by requiring customers to commit to only buying Tetra Pak’s specially treated paper. When the contracts were drawn up, Erik Torudd wanted a clause that would force customers to pay triple royalty if they used someone else’s paper. However, Holger considered it unnecessary, as Tetra Pak could always sell its paper as cheaply as any competitors. Torudd protested, fearing that paper mills would soon gain access to Dupont’s coating method and start producing equivalent paper on their own. He argued that it wasn’t certain that Tetra Pak would be able to withstand the competition and since the paper was the company’s major source of revenue, it would ultimately threaten the operation. But Holger had Ruben on his side. “Yes, yes, that’s enough for us to take back the machine if there’s any cheating,” Ruben commented. “Are you really willing to take back the machine if it means a whole city then has no milk distribution possibilities?” asked Erik Torudd, who did not believe Ruben was serious. “Of course,” Ruben replied. It turned out as Ruben had said. What Tetra Pak committed to in return for the stringent contract terms was a reliable service organization. It was a factor whose importance could not be underestimated. For a dairy, it would be a minor disaster if the machines came to a stop and the milk spoiled. Tetra Pak promised to quickly fix any faults or immediately supply replacement machines. This unique service would later become one of the company’s most important selling points, if not the most important. Once Tetra Pak had gotten the machines into the dairies, the retailers were the key group, as a retailer convinced that the tetra was much easier to handle would soon stop buying bulk milk for their stores. But Tetra Pak also had to try to overcome consumers’ resistance to buying, since enough protests from consumers could potentially push the dairies to revert to delivering only bulk milk or glass bottles."

Source:Tetra

"Nils Andersson and Gad enthusiastically took on the new project. But despite both of them constantly disparaging Americans and Frenchmen, who were already using the method successfully, their own results were poor. And both Gad and Andersson refused to consult anyone who already mastered the method. Quite soon, people began to wonder what was happening with the project. The reports gave clear signs that something was not right. And they never managed to show any paper where the plastic really stuck. “It’s damn strange that the paper department can’t make paper in the Eagan machine when everyone else apparently can,” Hans commented irritably on the missed development. “It’s not strange at all; they insist on doing everything themselves and refuse to learn from others’ experiences,” Erik Torudd replied. It was not until a year after the construction started that they figured out the temperature required for the plastic to really adhere. And that was due to an accident at work. A temperature regulator had malfunctioned, and the temperature of the extruder had begun to rise uncontrollably. Only then did the plastic adhere. The accident taught the Tetra Pak team something that the French and Americans had known for a long time. Only another year later would the method work well enough that it could be reliably used in production. But then, on the other hand, there were problems with Dupont, who was the rightful patent holder. “There is undoubtedly a patent infringement,” the company’s own patent engineer Tage Norberg also stated when the matter was discussed. However, Tetra Pak was saved by the fact that Erik Torudd had been shown the method already in 1951, and at that time there was no patent. Thus, Dupont had no legal ground against Tetra Pak. For the second time, Tetra Pak had cunningly appropriated a machine design."

Source:Tetra

"With age, Ruben became increasingly suspicious of other people. He was convinced that the majority of the world’s population consisted of swindlers and deceivers. And if they weren’t already, they would most likely become so. “If someone is given the opportunity for dishonesty, he will surely take advantage of it sooner or later,” was one of his common sayings. The examples with Carr Sherman’s hot-melt machine, Eagan’s Dupont machine, and Ruben’s own patent stories seemed to confirm that he was right."

Source:Tetra

"HP Smith’s machine was originally built to coat paper with low molecular weight polyethylene. Therefore, it worked perfectly well to use it also for high molecular weight polyethylene. But now they were after a new type of machine that coated the paper with the plastic through so-called extrusion. The method was based on first melting the plastic and then distributing it over the paper using a nozzle – the extruder. Thus, it created a smooth and fine distribution of the plastic. It was the chemical company Dupont that had allowed the machine manufacturer Eagan to develop the method in collaboration with HP Smith. Dupont’s purpose was to allow companies to use the machines at cost price and thus increase their market for polyethylene."

Source:Tetra

Appears In Volumes