1. What was ARCO Chemical’s rationale for globalizing?
2. What advantages has ARCO Chemical realized from its global operations?
3. What threats have arisen from ARCO Chemical’s globalizing efforts? What are some ways in which ARCO Chemical has responded to these threats?
4. How has globalization affected, and been affected by, industry consolidation?

In the 1980s, ARCO Chemical shed its less successful product lines. At one point, revenue shrank from $3.5 billion annually to $1.5 billion. But by stripping down to its most competitive lines of business, ARCO could better respond to the global political and economic events constantly buffeting it. Around the world, it now can take advantage of its technological edge within its narrow niche—mostly intermediate chemicals and fuel additives. This strategy paid off: By 1992, more than 40% of ARCO’s $3 billion in sales were made abroad, and it now makes about half of its new investment outside the United States. It also claims half the global market for the chemicals it sells.