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GROUP A3 Andreas Wirenhammar Per Hult Peter Hernandez Peter Larsson

Axeon N.V.- a case study. GROUP A3 Andreas Wirenhammar Per Hult Peter Hernandez Peter Larsson. Initial analysis. Lack of risk analysis To optimistic (50% market share in 2 years) ‏ Hard to be efficient in a new process, child diseases at a new plant.

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GROUP A3 Andreas Wirenhammar Per Hult Peter Hernandez Peter Larsson

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  1. Axeon N.V.- a case study GROUP A3 Andreas Wirenhammar Per Hult Peter Hernandez Peter Larsson

  2. Initial analysis • Lack of risk analysis • To optimistic (50% market share in 2 years)‏ • Hard to be efficient in a new process, child diseases at a new plant. • Very low interest rates 8%, high interest rate risk

  3. UK factory in best interest? • Differences in variable cost between the alternatives are minimal • Working capital more or less equal • UK needs 1.4 million investment in plant • AR-42 in UK is less than 0,2% of whole company turnover (1% of UK turnover )‏ • Recommend plant in UK and keep the company decentralised

  4. Mr Van Leuven • Conflict on company policy • Fear of conflicts • What he says decides the companies future policy, needs to think it over • He may have decided not to interfere in the issue

  5. Transfer Price • Must of course sell below market price • Should at least cover the variable costs • Should cover Dutch Operations part of the fixed costs • Must change Dutch Operations policy to sell at: fixed costs + variable costs + revenues • Dutch Operations should sell at cost price

  6. Corporate Strategy • High independence and autonomy • Create driven subsidiaries • Optimize every market/subsidiary by themselves • Bonus to achieve certain revenue targets but no bonus for cooperation.

  7. CSF • Customer satisfaction • Even quality • R&D (efficiency, new products), patent protection • Continuous production/reliabilty • Access to raw materials • State of the market

  8. KRA • Maintenance • Process surveillance/control • Quality testing

  9. Centralisation/Decentralisation • Decentralisation gives the organisation responsiveness and enthusiastic managers • Risk for suboptimization because of decentralisation, each for his own. • Current conflict clearly; centralisation vs. decentralisation • Have a choice between staying decentralised or take a more centralised approach.

  10. What Should van Leuven do? • Has to choose between centralisation and suboptimization • Make a decision ASAP • Taking into account the small amount of money involved (relative turnover)‏ • Let Ian build their factory and keep the policy of decentralisation

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