BASF Report 2021 Management’s Report – Our Strategic Action Areas 28 Our Strategic Action Areas Our customers are our number one priority and are at the heart innovation and growth potential together with them. For instance, Good to know of our strategy. We want to be their most attractive partner for chal- we established interdisciplinary teams in our business units to even lenges that can be solved with chemistry. BASF supplies products better and more quickly address the needs of our most important and services to around 90,000 customers1 from almost all sectors customers. and countries around the world. Our customer portfolio ranges from major global customers and small and medium-sized enterprises to BASF’s strategic orientation is founded on a comprehensive end consumers. Our comprehensive product portfolio means that analysis of our markets and competitors. We continuously monitor we are active in many value chains and value creation networks. We global trends and anticipate the resulting growth opportunities and use various business strategies, which we adapt to the needs of risks. The following six strategic focus areas enable us to focus on individual industries and markets. These range from cost leadership our customers while strengthening our leading position in an increas- in basic chemicals to tailored system solutions for specific customer ingly volatile and competitive environment. applications. Innovation Selected awards Innovation is the bedrock of our success. BASF is a leader in the chemical industry with around 10,000 employ ees in research and The virtual car ▪ Ford: World Excellence Award development and R&D spending of around €2.2 billion. We are ▪ Dulux: Supplier of the Year Award The automotive industry is one of our most important customer expand ing this position by strengthening specific research activities, sectors. In February 2021, we launched an interactive platform ▪ 3M: Supplier of the Year Award for example in battery materials, polymer technologies, catalyst that showcases BASF’s wide range of solutions and innovation processes or biotechnological methods. In addition, we are bringing expertise in mobility: Customers can explore over 500 application We continue to drive forward our customer focus. We have refined research and development even closer together, incorporating our areas in a new virtual car – from high-performance plastics and our organizational structure to enable our operating divisions to customers’ requirements into our innovation processes even earlier coatings to automotive fluids, catalysts, cathode materials and flexibly address specific market requirements and differentiate them- and more intensively, and expanding cooperation with customers, more. Detailed information is provided on all products and solu- selves from the competition. universities, research institutions and other partners. To further tions. The virtual car offers a selection of different powertrain strengthen our innovation power, we will reorganize our global technologies: combustion engine, plug-in hybrid, battery electric We are also improving our customer relationships with a range of research activities in 2022 and bundle them in a global research unit vehicle and fuel cell vehicle. E-mobility solutions can also be filtered measures. For example, since 2019 we have been using the Net based in Ludwigshafen, Germany. by material properties such as battery efficiency, corrosion protec- Promoter System® worldwide to systematically record and optimize tion or thermal protection. our problem-solving skills, product quality and delivery reliability Our innovation pipeline is geared to sustainability – especially Discover the virtual car at basf-vcar.com based on direct customer feedback. We have been using a new climate protection and the circular economy. This lays the founda- IT-based customer relationship management system, Salesforce, tion for future growth: We are working intensively on fundamental since 2020. The application helps our sales employees to provide innovations for products, processes and business models, for customer support and simplifies their work. Above and beyond this, example in the chemical recycling of plastics, battery and catalyst we have intensified cooperation with our customers to leverage technologies, low-carbon production of basic chemicals, and digital, 1 The number of customers refers to all external companies (sold-to parties) that had contracts with the BASF Group in the business year concerned under which sales were generated.