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Unformatted text preview: Position Statement Tenova SpA is a strong company in a troubled industry. The metals and mining industry is faced with a declining demand for their products, which is in turn reducing their need for new equipment. Tenova has the resources to weather the short-term reduction in demand with large cash reserves and a solid backlog of orders. For this reason the current market crisis may present Tenova with an opportunity for acquisition of companies in both the steel and mining equipment industries at discount prices. I recommend is that Tenova acquire one or more companies in the mining equipment industry that occupy adjacent segments to Pyromet and Takraf. In the near future the mining industry is capable of weathering the current economic storm better than the steel industry. This will provide more opportunities than the steel industry, which is expected to be stagnant for the next five years. An Evolving Strategy Tenova has significantly grown in the current decade. This is not only due to the booming mining industry but also their increased understanding of the business and its environment; allowing them to deliver value to customers and shareholders. In the industry there are two major types of competition: the full-liner companies offer customers systems that can follow the complete stream of steel production, while niche companies help customers with expertise in one area of production. Tenova has pursued a focused differentiation strategy with multiple products by offering advanced and customized systems in several niches that the are involved in. Since the commencement of the 2003 expansion strategy, the growth of Tenova has been rapid; focusing on expansion of their technological expertise through acquiring of firms to improve existing technologies. Generally with these acquisitions Tenova has worked to preserve the company itself, while absorbing its knowledge and technology. This has proven to be a successful strategy for the company, allowing them to achieve their desire to be a technological (and sales) leader in their niche markets. Regardless, it is important that the company not rely on acquisitions as the only way to grow technologically. Improving their own technology may be more cost efficient than simply buying companies that have good ideas. It is also critical for management to effectively control any organizational structure complications. With an ever-growing number of business units, project management and fostering information sharing between units will become increasingly important yet difficult. As things become more and more project management and fostering information sharing between units will become increasingly important yet difficult....
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- Spring '09