Lenzing AG: Expanding in Indonesia
Case Review
Summary
Lenzing AG is one of the worlds largest rayon fiber manufacturers, originating in Lenzing, Austria. In 1938 Lenzing AG was founded, starting pulp and viscose fiber production.
Up until the 1980’s, Lenzing was a company that held its production and management in the same country and town where the company had originated. Until one day , the Chairman of Lenzing had agreed to go into a joint partnership with an international investor. The joint venture was with an Indian entrepreneur by the name of Ashok Birla, who saw opportunity in Indonesia for Lenzing and the rayon industry within. Lenzing viewed this as an opportunity to break out of their domestic Austrian market, and tap
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As a producer of rayon, Lenzing’s most important fundamental constituent is dissolving grade pulp. This is a rather uncommon form of pulp, in which they have been purchasing from Brazil to their production plant in Indonesia. This would be viewed as a weakness, as in Indonesia there are 14 pulp producers, none with the technology to create the dissolving grade pulp, but pulp none the less. I believe that Lenzing has an opportunity to create an agreement with one or more of these local pulp producers, to enable them to produce the necessary grade of pulp.
As rayon requires a large amount of pulp for its production, they have purchased a percentage of a company in Brazil to meet their pulp needs. For Lenzing, this was a valuable purchase and has made it possible for them to continue the production of rayon in Indonesia. Although, I believe that there is an opportunity locally that would satisfy their need for pulp. Indonesia has 14 producers of pulp, none of them with the technology to create the required grade that is needed in the production of rayon. Rather than purchasing a percentage of the pulp company in brazil, and having to ship the pulp time after time internationally, it could have been a more economical transaction with the Indonesian pulp companies. There could have been an opportunity to
As the day-shift supervisor at the ISG Steelton steel plant, you summon the six college students who are working for you this summer, doing whatever you need done (sweeping up, sandblasting the inside of boilers that are down for maintenance, running errands, and so forth). You walk them across the plant to a field where the company stores scrap metal. The area, about the size of a football field, is stacked with organized piles of metal. You explain that everything they see has just been sold. Metal prices, which have been depressed, have finally risen enough that the company can earn a small profit by selling its scrap.
The party I represented was Mr. Arthur Hangtough, 58 years old, has been employed by Enterprise Manufacturing Corporation (EMC) for 15 years. Mr. Hangtough has been the vice president for personnel and labor relations for the last four years.
In your grievance filed at Browning Unit, you claim staff are denying your constitutional right to speak with your legal counsel. You are requesting an emergency legal call to your out of state attorney.
Average dosage of Angiomax = 70% * 1 + 20% * 2 + 10% * 3 = 1.4 (assuming 20% get 2 doses & 10 % get three does)
Opportunities: International expansion is a real opportunity for the company. LorPel could set up branches in other counties internationally and thus increase the market for its products and benefit from opportunities in these markets. Diversification is another opportunity for LorPel. Instead of just concentrating on the wood pellet business, the company could eventually take up other projects in the timber industry. The US Market can be considered an opportunity as well. The US market would prove profitable for the sale of wood pellets, given the high demand in the country. Exporting to the US would earn the business additional profits.
Mueller-Lehmkuhl (ML) was a German producer of apparel fasteners. Apparel fasteners are used in the garment industry. ML had been producing apparel fasteners since the late 19th century. In recent years, they had achieved technological superiority which resulted in high margins for their products. ML valued reliability of their products and fast service to their customers. However, competition and domestic market saturation in the 1980s led ML to a crossroads in which they needed to decide how they would maintain domestic market leadership and while expanding to new markets.
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Perhaps Placido would have to find other suppliers that will meet the demands for a low cost, that would be an advantage for the company.
With proven strategy and strong business model Rio Tinto Group approached the global market. Through a thorough study for the Group’s approach tointernationalize the operations and structure of its production groups, it is found that this approach suits the strategy set by the group to achieve its objectives in maximizing shareholders returns and creating opportunities for improving many communities in the global. Also, it is found that Rio Tinto developed a strong risk-management & decision-making processes that enabled the group to compete against the limitations on its trades & operations.
Another alternative should be to create a plant in Europe so now they don’t have top ay all the taxes they have to pay so they can export their products, in that way they will be able to give better prices to their clients, and they will supposed to have a better service and more quality because they where the pioneers in those products.
Blue Ridge Mill currently purchases shortwood from a nearby competing mill for pulp production. Bob Prescott, the controller for Blue Ridge Mill, is considering the addition of a new on-site longwood woodyard. The new woodyard would have two main benefits including the ability to eliminate the need to buy shortwood from an outside source and the opportunity to sell shortwood on the open market as a new market for Worldwide Paper Company.
Moreover, even though producing in Vietnam would suppose a strong saving in cost in the labor-intensive processes, the risk of mold duplications and counterfeits is high. The imitation of the company’s products would eliminate the differentiation that allows them to charge a much higher price than the local manufacturers (15$ compared to 3$). Also, the company lacks of experience establishing a wholly owned subsidiary in a new country.
In addition to focusing on SMEs, Li & Fung should focus on acquiring or merging with competing firms. The company should try to get into markets in developing countries such as India. It would also be beneficial for the company to try to break through into new products that are complementary to clothing such as footwear.
The cost is kept low with labor and the production. This helps competing in the export trading world. “I am telling, in textile nobody can beat Bangladesh in price and quality”
However, MacDowell Corporation believes that changing the relationship with San Fabian Supply Company will make it benefit more. On one hand, MacDowell has been marketing its products through an exclusive distributor only in the Philippines and the parent company wants to market the products same as in other countries. On the other hand, the demand for construction materials has decreased since the expansion of its plant in the Philippines before. MacDowell Philippines’ plant operating rate was very low, at only about 45% capacity, and the overcapacity plagued the company a lot. To get rid of this situation, MacDowell Philippines wants to increase sales and its new president believes that having more dealers can lead to more sales. So MacDowell wants to change the relationship with San Fabian Company in the