PRESENTATION GROUP C3 By: Group C3 Taraneh Derayati Daniel Budai Horia Puscas Jill Rödin

1. The initial analysis Advantages Disadvantages Cost analysis Marketing research Initiative Detailed analysis What happens after 7 years ? Recovery value ? Is a 20% return realistic ? Lack of comparison

2. Build the factory in UK? Yes No Increased sales Reliable quality (UK made) Discovery of a new market Bigger market share Increased costs Reasonable ? ( 400 vs. 600 tons) Loosing control over the cash flows Creates competition and may result in taking over the AR- 42 sales

3. Van Leuven’s behaviour He has to look after the whole company’s interest. He likes Ian’s initiative He trusts his other managers since he has been working with them for a long time He is the one who has the last word so he has to study every investment carefully.

4.Transfer costs (in million £) Netherlands CostRevenue Around 2,5 with marginal for additional costs 3- 3,1 20% - 24% profit UK CostRevenue 3- 3,1 + 0,150 3,7 14% - 17 % profit

5.Corporate strategy Finance related: To continuously increase the growth Increase the capital value by about 12% each year Encourage proposal of new investments Market expanding Customer related: Meet the needs of the customers

6. CSF 12% return on investments Successful acquisitions of new companies Smart investing Rationalized production Effective R&D Younger product assortment

7. KRA Continuous research and production Educating personnel Market research and evaluations Checking the financial status of the company

8.Centralize or decentralize It seems that Axeon is a decentralized organization. They only have result control for different companies and managers are free to manage their companies as they wish BUT, we still see that it is Van Leuven who decides and Ian couldn’t manage as he would have liked, the others controlled his proposal. So it seems that THEY TALK BIG.

9. The decision He should hire an independent group of experts to investigate the case. Check if Ian’s numbers are too optimistic If it is profitable to have a new factory ? In that case should it be in the UK ? Check the market and the demand in the UK Find out why the other managers disagreed with Ian from the beginning