Article at a glance:

Multiple choice for the chemical industry

The complexity of the chemical industry makes it difficult to draw clear links among companies, markets, and shareholder returns. Industry analysts and executives generally regard scale, geography, market position, and focus as key drivers of shareholder value, but a comprehensive study using McKinsey's long-term performance database found that those things don't make much difference to it.

The take-away

The study found that the most important driver of financial performance in the industry is a company's portfolio—specifically, whether the company deals in commodities, specialty chemicals, or a diversified mix. The study found opportunities to improve the financial performance of companies with each kind of portfolio.