Axeon N. V case. Seminar Group B3. Charlotte Cottet Stijn Op de Beeck Sook Ching Voo Sandra Valdivia. 1. What do you feel about the initial analysis? Was there in your opinion anything wrong with it?. IRR is good
Seminar Group B3
Stijn Op de Beeck
Sook Ching Voo
2. Is construction of the new factory in the UK in the best interest of Axeon?
- Problem: market price
Less profit as a distributor
Hollandsworth feel they are not treated fairly
- Lack of synergy
- Marginal cost + fixed-lump sum fee
- Fixed cost is covered with the current production
- Stimulates cross functional coordination
- Performance of either entity to be over- or understated
Highly standardized industry based on economy of scales with a continuous production.
- Decentralised to retain specialised knowledge of the local market and existing skills
- Independency against other companies promote lack of understanding of different skill sets of other companies that could be leveraged
- Performance based rewards further promote distance between companies
- Should take advantage of the synergy between companies
This is not the only time they will face a decision like the one of AR-42 in the UK.