Professional Documents
Culture Documents
Colfax
Market Penetration
Why?
Reliability
Service Support Meeting oil demand from energy hungry markets Need to configure an optimal distribution structure
Quality
R&D
Speed
Economic
Transparency
Political
Saudization
Local employment
Colfaxs Challenge
Colfax
Quality Leadership
Cost Leadership
Colfaxs Challenge How can Colfax nail the middle east opportunity in a strategic manner, given the current supply chain conditions?
Key Issue
Recommendations
Differentiated Offerings
Alliance Constellation
The Strategy - Redesign vendor sourcing system - Collaborate with other supply chain partners within the fluid transportation segment - Achieve long term partnership with Aramco
Colfax
Benefits - Leverages on different expertise - Differentiation through premium offering - Reduce barriers to entry
Intra-SCM Team
1. 2. 3. 4.
Intra-SCM team R&D Service Centre Service Centre Create Captive market Schools
Value proposition
Reliability
Quality
R&D
Service Support
Speed
SCM Team Yes Centre for R&D Service Centre Labour Supply Yes
Implementation
2010 2011 2012 2013 2014 2015
Strategy 1
Strategy 2
Strategy 3
Situation Analysis
Strategy 1
Strategy 2
Strategy 3
Implementation
Current situation
Projections
Conclusion
Higher reliability
Longer mean time between maintenance and repair
Europe
United States
Growth
Competition
Power Generation
Global Navy
General Industry
Commercial Marine
PEST Analysis
Political Political Instability Internal stability over international relations, in particular US Monopoly over oil production Stringent environmental regulations for oil companies Transparency for equity Saudization for local employment Economical - Heavily dependent on oil and petroleum related industries. In 2006, oil export revenues accounted for around 90.2% of total Saudi export earnings, 89.7% of state revenues, and 54.1% of the countrys GDP.
Social High illiteracy rates, the deterioration of education, the slowdown of scientific research and development, poor production bases and competitive capacity and mounting unemployment. 15% Unemployment
Technological ?????
SWOT Analysis
Strengths - Possess niche technology - Stronger B/S and access to capital expertise - Extensive global sales and networks + strong branding - PD portfolio ?? - Good management with industry experience Opportunities - Growing demand for oil from developed and developing (China and India) markets - Industrial demand for manpower expertise in oil Weaknesses - Weak product awareness - Engineering and procuring groups were unawareness of PD technology and its products - Lack of trained personnel - Lack of establishment in Middle East - Competitive disadvantage (not on 9com list for Aramco) Threats - Entry of Alternative Energy Technology
Acquisition of EPC
Acquire EPC
Create business opportunity with Aramco bypass tender system form exclusive partnership with Aramco for it to use its PD technology Aramco focuses on business of delivering oil while entrusting responsibility of subsystem to Aramco
Risky
Unfamiliarity with business climate of ME could result in liquidation losses if management fails
Colfax's Income Statement 2008 2,007 506,305 330,714 0 98,500 4,162 -50,346 123,275 19,246 104,029 39,147 64,882 2,006 393,604 256,806 0 80,103 3,336 33,816 19,543 14,186 5,357 3,866 1,491
604,854 387,667 57,017 125,234 5,856 12,391 16,689 11,822 4,867 5,438 -571
591,859 746,145
695,115 843,489
1. Colfax has a strong financial position 2. Net losses and in 2008 attributed to its IPO costs which in turn negatively impacted its cash flows
1.411690069 6.234647268 -
3. Asset Management Ratios 2008 a. Inventory Turnover Ratio b. AR Turnover ratio c. Fixed Asset Turnover d. Total Asset Turnover 4.826110772 5.984861078 0.978381447 0.662435548
4. Profitability 2008 a. Profit Margin b. Basic Earning Power c. Return on Assets d. Return on Equity -0.000944029 0.018277778 -0.000625359 -0.003420575
Targets for strategy Data for middle east oil and gas industry Aftermarket sale for Colfax Decision matrix of which partners to choose Competitors analysis Financial feasibility if strategy Timeline Clearer framework for strategies Cost benefit anaylsis List of priorities for aramco Why would aramco want to take up this strategy
Rationale for choosing 50% of gdp comes from oil and gas industry Industrial trends show doubling gdp rates (4.7%8.5%) Kuwait (8.4-13.%) Qatar