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AXEON CASE STUDY

AXEON CASE STUDY. Group C5 Erik Seeman 800117-0136. Initial Analysis. No alternate plans or worst case scenario No analysis of what the production costs would be in the Netherlands, for export to the UK Expansion/export plans.

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AXEON CASE STUDY

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  1. AXEON CASE STUDY Group C5 Erik Seeman 800117-0136 Erik Seeman

  2. Initial Analysis • No alternate plans or worst case scenario • No analysis of what the production costs would be in the Netherlands, for export to the UK • Expansion/export plans Erik Seeman

  3. Is construction of the new factory in the UK in the best interest of Axeon? General analysis: No, because of: • Profit analysis • Risk Yes, because of: • Showing trust • Internal competition • Easier expansion Erik Seeman

  4. Why did Mr van Leuven behave as he did? • No clear MCS • Not driven by incentive programs • A “hot potato” that needs a more thorough analysis Erik Seeman

  5. Transfer price if AR-42 is supplied from the Netherlands to the UK Erik Seeman

  6. What is Axeon's corporate strategy? • Decentralisation • Related diversification • Specialisation • Expansion Erik Seeman

  7. Critical success factors in Axeon • Establish a transfer-pricing system which encourages growth • Establish a more diverse MCS • Establish a better bonus system Erik Seeman

  8. Key recurring activities in Axeon • Manufacturing • Sales • Marketing • R&D • Finance • Administration Erik Seeman

  9. Centralisation / decentralisation • Factors supporting decentralisation • Local information (by subsidiaries) • Constrained upper management time • Greater need for training of lower-level managers • Feasible incentive costs • Production or service processes that require little coordination across organisational units • Low level of centralised information needed for local units to function • Common Trademark • Bonus Programme Erik Seeman

  10. What should Mr van Leuven do? • Conclusion: Don’t build the new factory • Change bonus system • Apply cultural control in order to make the subsidiaries work for the good of the company • Introduce a common trademark Erik Seeman

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