The Prysmian Group case describes the Italian cable producer two years after its acquisition of the Dutch competitor Draka. The case starts off by describing the reasons why Prysmian is the market leader – not just in terms of global market share but also in terms of profitability. Prysmian is very pragmatic in everything they do and try to squeeze out additional profit margins by making their business processes more efficient every day. But this dominant strategic model, that has been the secret of Prysmian’s success in the past decade, starts to show some limitations. The company has always faced the progressive price erosion and increased rivalry through the continuous search of efficiency gains, in order to generate positive cash flow to be used to acquire and restructure underperforming rivals. While this strategy is certainly a valid option for the creation of future shareholder value, the Prysmian top management team is facing four strategic challenges that are discussed in the case: (1) Stimulate corporate entrepreneurship: how can we enhance and use the entrepreneurial drive in the entire group to generate new growth options without losing the grip on costs and efficiency? Do we need to change our formal strategic planning system to embrace business ideas from our subsidiaries? (2) Enhance customer centricity: a recent customer survey has shown that the focus on efficiency not always enhances customer delight. How can Prysmian improve its customer centricity without losing the ability to run efficient processes? (3) Build cross-border commercial synergies: Many businesses are basically run by strong country CEOs that have little incentives and interest to serve internal clients from other countries. How can Prysmian build commercial synergies across country borders? Does the current matrix structure work? (4) Identify growth alternatives: Prysmian is Europe-centric and opportunities to grow there seem to be limited (or less attractive). Hence, what growth alternatives has Prysmian to make sure that the cash-flow expectations of the shareholders are met? Should Prysmian expand geographically into other mature markets (e.g. North America), newly developed markets (e.g. Russia, Brazil, China) or emerging markets (e.g. selected African markets)? Or should Prysmian invest in adjacent niche markets similar to its SURF business?

PRYSMIAN GROUP: Leading the Way in the Global Cable Industry

VENZIN, MARKUS;AMODIO, ANGELA
2014

Abstract

The Prysmian Group case describes the Italian cable producer two years after its acquisition of the Dutch competitor Draka. The case starts off by describing the reasons why Prysmian is the market leader – not just in terms of global market share but also in terms of profitability. Prysmian is very pragmatic in everything they do and try to squeeze out additional profit margins by making their business processes more efficient every day. But this dominant strategic model, that has been the secret of Prysmian’s success in the past decade, starts to show some limitations. The company has always faced the progressive price erosion and increased rivalry through the continuous search of efficiency gains, in order to generate positive cash flow to be used to acquire and restructure underperforming rivals. While this strategy is certainly a valid option for the creation of future shareholder value, the Prysmian top management team is facing four strategic challenges that are discussed in the case: (1) Stimulate corporate entrepreneurship: how can we enhance and use the entrepreneurial drive in the entire group to generate new growth options without losing the grip on costs and efficiency? Do we need to change our formal strategic planning system to embrace business ideas from our subsidiaries? (2) Enhance customer centricity: a recent customer survey has shown that the focus on efficiency not always enhances customer delight. How can Prysmian improve its customer centricity without losing the ability to run efficient processes? (3) Build cross-border commercial synergies: Many businesses are basically run by strong country CEOs that have little incentives and interest to serve internal clients from other countries. How can Prysmian build commercial synergies across country borders? Does the current matrix structure work? (4) Identify growth alternatives: Prysmian is Europe-centric and opportunities to grow there seem to be limited (or less attractive). Hence, what growth alternatives has Prysmian to make sure that the cash-flow expectations of the shareholders are met? Should Prysmian expand geographically into other mature markets (e.g. North America), newly developed markets (e.g. Russia, Brazil, China) or emerging markets (e.g. selected African markets)? Or should Prysmian invest in adjacent niche markets similar to its SURF business?
2014
ECCH
Venzin, Markus; Amodio, Angela
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11565/3948918
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