Panda Furniture123

1174 WordsJun 27, 20155 Pages
AGSB PANDA FURNITURE STEFAN LIJESKIC INTERNATIONAL BUSINESS STRATEGY When Jan Hendrick Winkler took over his father company he faced many challenges. Panda Furniture is company based in Belgium, family business with long tradition and wide range of products. Company product line is based on Matrasses, Bedding and Furniture. After research Jan conclude that company faced many serious issues. Firstly many company’s costumers start making their own metal springs, shortage of workers, British company which panda create joint venture is on the way to bankruptcy and lastly polyether foam was starting to be inroads into the company’s market and Panda know nothing about this new technology. First changes Jan make 1971 the company had bought…show more content…
A Big company matured and established in the US, already one of the giants in the market. Winkler saw two opportunities there: firstly he thought the managerial aspect of the company could be improved and therefore would increase the company’s profits, and secondly he thought the implantation of the Panda’s foam making equipment and technology could improve the product quality and company’s efficiency. The acquisition could be successful depending on multiple factors: First, the market’s reaction to one of the largest companies being taken over, and this might be a positive sign. By toppling MLI, a giant in the US market, Panda will enter the competition with a fear striking approach. M.L.I value is between \$650,000 and \$840,000. But after discussion with the owner he said that he is ready to sell his company for \$4 million. Financial analysis for M.L.I project If we look at the financial summary of M.L.I we can calculate how much Winkler can bid for this company. We can calculate Net Present Value, Indicial Rate of Return and Payback period for this project. If we take last year and estimated after tax Income as a projection and investment of \$2 million we can calculate: Calculation based on \$ 1Million bid NPV= \$435,368 IRR= 26% PAYBACK PERIOD= 3,49 year Calculation based on \$2 Million bid NPV= -\$564,632 IRR= 7% PAYBACK PERIOD= 6,99 years Analysis In this table is