Case Study

Case Study



DANIELI - CASE STUDY

a) Dimensions of Case Study

Danieli is exporting almost all of the productions today. The sales level has increased, and they are also expanding their business by going into various markets in the world. This is because of the higher level of research and development. They are looking for suppliers, who provides quality and in time supplies because the company can not compromise with the quality of the product. Danieli's approach to its overseas investments is very clear. He goes for the market where the cost of production is low, in order to increase profits, and also can gain competitive advantage. Counter trade is now very common in many sectors. Danieli's strategy also includes the countertrade phenomena, but this did not work for Danieli. But offset agreements were used in many organizational sectors. And competitive advantage can be gained through this strategy so that the offer will seem more attractive to the other party.

b) Relevance of “Global Network”

In today's world, businesses are operating globally; hence global networking is of great importance. Companies need no get familiar with the market trends and government regulations before getting inn to the particular market. Imposed sourcing can take two of the conditions. One is the local content requirement (LCR) and the other is direct/indirect offset local sourcing (DOLS or IOLS). Because most of the time, government impose the industry to get supplies from the local suppliers, in order to maintain the market condition stable. Or there would be indirect enforcement from the other market bodies, this can even be verbal, in order to maintain the market position. So, the local considerations are very crucial if the business is running globally.

c) Major Implications

The major implication of this case study, as far as global networks were considered, includes the maximization of the opportunities; this will only be possible if the government provide the industrialists with a free hand in order to maximize profits. Government can reduce the local imposing so that companies can look for suppliers of their choice. If the countertrade system was appreciated by the government, the companies would be trading at a better exchange. The risk of the cost will then be lowered. The consumers and suppliers then will be more efficient because the barrier to trade would be removed. Future investments will be secure if the system explained above would be applied.

d) Suggestions/Recommendation

Danieli's strategy for investment purpose is quiet clear. The quality will have to be at the same level, as well as the cost of production need to be reduced. For this very purpose, the suggested idea is to get the suppliers from the area where LCR and DOLS regulation were minimized. The recommendation for the future investment is that Danieli should have been looking for the counter trades, and the markets from where the government imposition was minimized. On the other hand, the company can also negotiate with the government in order to trade on barter ...