Timken Company Essay

387 Words2 Pages
The Timken Company Key issue/Problem How Timken should make decision on investing into the Romania Company, if the company invested, how did the company reduce the risk? Alternative Actions 1. Not invest on Romanian government 2. Invest on Romanian government and use acquisition for Rulmenti Grei ( acquiring firm’s core business) 3. Invest on Romanian government and use strategic alliance for Rulmenti Grei (contract/ownership of capital) Evaluation of Alternatives 1. Not invest on Romanian government Pros:  No risk for company Cons:  Loss the opportunity to establish a stronger competitive position in the European industrial bearing market and to lower manufacturing costs across its global bearing business 2. Invest on Romanian government and use acquisition for Rulmenti Grei ( acquiring firm’s core business) Pros:  Has the opportunity to establish a stronger competitive position in the European industrial bearing market and to lower manufacturing costs across its global bearing business  Timken has chance to expand its product line in response to European customer demand.  Help Timken to learn and develop new capacity  Overcoming entry barriers on Europe. Cons:  Timken should invest lot of money.  Has a big risk on acquisition.  Timken should have high probability of synergy and competitive advantage by maintaining strengths.  Large debt for Timken Company. 3. Invest on Romanian government and use strategic alliance for Rulmenti Grei (contract with Rulmenti Grei on production, marketing, and distribution) Pros:  Reduce risk and cost for Timken  Easy to entry market, and save time Cons:  Share profit with Rulmenti Grei Recommendation I recommend Timken acquiring firm’s core business.
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