Fvc Case Study 43

2258 Words May 13th, 2011 10 Pages
STRATEGY & FINANCE
MID-SEMESTER ASSIGNMENT Dr. John Heptonstall Bao Chau Nguyen Xuan May 2011

I/ Summary of FVC & RSE’s business activities 1. Flinder Valves and Controls Inc. Flinder Valves and Controls Inc. is a small company located in Southern California, manufactured specialty valves & heat exchangers. This company realized an outgrowth in 1980s of previous century from a small company for engineering on an experimental heat-exchanger product. After 7 years, it acquired the properties of the engineering corporation under the leadership of Bill Flinder, an outstanding researcher. He always concentrates on R&D not only to improve current products but also to create new products with patent protection. Moreover, it also owns a
…show more content…
- As being an internationally corporation, RSE has a large distribution network with a strong marketing clout  help FVC expand its market share when cross selling with other RSE’s products. - RSE 's greater purchasing power would lower the cost of materials and components for FVC  reduce FVC’s in-process costs. It has a significant meaning especially in the increasingly global marketplace with more costly development. - RSE is also expert in high-volume manufacturing with many experiences & product know-how which FVC did not have. - Additional, being a large international financial corporation, RSE hold a deep financial pockets which FVC is lacking to expand its research & development as well as executing the firm’s "widening gyre" project which Bill Flinder believes that would have a broad application in nautical, aerospace and automotive

products. Based on the investment required to bring such technology to market, he estimated the economic value at between $10 and $18 million. As shown above, both two companies are each in a position to complement each other to reap the benefit of each other’s strengths. Otherwise, RSE had adopted an aggressive growth-byacquisition program aimed at diversifying the company’s markets and prospects. It is a good time for both companies to take advantage of the synergies of merging together (i.e. economies of scale, economies of scope, cross selling, and

More about Fvc Case Study 43

Open Document