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Royal Danish Bearing Timeline

Business and Management Paper 1 presentation

Andre Pertuit

on 23 January 2013

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Transcript of Royal Danish Bearing Timeline

1915 Royal Danish Bearings is Founded 1915-30 Business grows and Expands 1930's Royal Danish Bearing have a market positioning of high quality and price 1945 Japanese Companies enter ball bearing market 1970 Competitive environment Changes 1965 Valdemar Holstein becomes CEO of RDB 1970's Energy Crisis 2000 Millennium Bug Crisis 2005 Anna Holstein Joins RDB 2008 Collapse of Icelandic banks Kaupthing and Landsbanki 2020 Anna's Plan Valdemar's Counterproposal Royal Danish Bearings was founded by Henrik Holstein as a Danish company. He foresaw the expansion of the ball bearing industry due to the growth of the automotive sector. Contributed to the secondary sector of the Danish economy. Operated in B2B market and expanded through organic growth. Manufacturing was concentrated in three mega factories located in Denmark, Northern Germany and Sweden. UAB and FIB were the main competitors of RDB. UAB's ball bearings were medium price and medium quality. FIB's ball bearings were low quality and low price. These Japanese companies used low labor costs to gain entry into the ball bearing market. The positioning of RDB allowed it to maintain its market share. Valdemar implemented several changes such as empowering middle managers in a tall organization structure, adopting techniques such as total quality management, benchmarking, and Kaizen. Gross and Net profit margins lower than previously. Maintenance and technological upgrades were being delayed. Environmental campaigners started to put pressure on RDB because of pollution levels. Wages rose in Japan and as a result the Japanese ball bearing companies started using just-in-time stock management. Their flexibility became their USP. They also met international quality standards allowing them to export to different regional trading blocs. Valdemar consulted economists and other specialists to minimize the impacts of changes in the external environment. Valdemar reviewed RDB's contingency plan every year thus avoiding a possible technological disaster. She started to implement "green" approaches to manufacturing within RDB. Demand for ball bearings was slowing down in Europe, whereas it was growing substantially in countries such as China, Brazil and India which were going through a phase of strong industrialization. Icelandic banks, in which RDB had funds in saving accounts, collapsed suddenly. However, RDB later managed to recover most of the funds. Anna's vision for RDB was to make the worlds most technologically advanced, energy efficient ball bearing in small "green" factories located near their customers. She wants to significantly increase spending on R&D and examine its impact on the environment and on its customer's carbon footprint. In addition Anna wants to list RDB on the Frankfurt stock exchange making it a PLC. Manufacturing Distribution Marketing Manufacturing would be accomplished in smaller, more flexible factories. This would be accomplished by opening 12 new factories in mainly Brazil, China and India, She would also like to sell RDB's two mega factories in Sweden and Germany and significantly downsize the one in Denmark. Factories would be close to customer locations to reduce response time and improve logistics including distribution and delivery. It would also shorten the working capital cycle. Anna wants RDB to advertise in a wider range of publications such as e-zines and professional websites. She also wants to use ICT to communicate to a wider range of external stakeholders to create brand awareness in the design community. In addition, RDB should carry out market research both primary and secondary. Workforce Planning Employing workforce with a better cultural understanding of their customers. New RDB factories would be jointly managed by a experienced RDB senior manager and one local manager. Some machinist from European factories would be offered key positions, however most of the existing jobs in Europe would be made redundant. New workers would be recruited locally on lower wages. Rename the company from "Royal Danish Bearings" to "Green Bearings" and adopt Anna's marketing strategy. He also suggested that RDB divided the mega factories into autonomous cells each assigned to serve a region of the world and each with its own strategic and operational objectives. Local salesment would be hired, paid low salaries, but with high commissions as an incentive. In addition, Valdemar would like RDB to form strategic alliances with companies in India, Brazil, and China.
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