Case RocaJoin now to read essay Case RocaCASE GROUP AInternational StrategyFrancisco AlcaldePedro AmadorAugusto Dнaz-LeanteJavier EcheniqueExecutive MBA ESADEJose Luis MartнnezFeb-2003Mar Santana RollбnIndex ContentCorporate StrategyFinancial conditionInterest competitorsCore competencesNext stepsVision, Mission, Objectives, Strategy (sanitary ware market)ExhibitsCorporate StrategyAlthoug the three competitors (Roca, Sanitec, American Standard ) present a common goal in their strategies, there are some differences in their scope. In the case of Roca they have always been much more concerned about setting up new production abroad and purchasing already existing companies under the same brand ROCA.
Example – In order to improve the current business of the United States, we are working hard to increase our existing footprint in the global economy. Our main objectives in the business of Roca includes providing a platform for new international enterprises to focus on their international business, creating a network of international networks for a competitive advantage over competitors, making it easier for small national companies to compete on existing market platforms outside the USA with a more competitive share and thus a better chance of success. The plan is for our business, as seen after the acquisition, to be able to expand our domestic footprint by up to 50%, because the country’s new brand ROCA is a great way to achieve that goal and that the business will grow, especially in the short run since Roca’s presence is now more than 35% of its total product and only 0.8% of its annual profit per share.
Example – In order to make a real difference to the international business of our company, we are seeking the services of a leading international business organization, which will be engaged as a partner to assist them in development of its internal operations. The focus of Roca is on building a more effective international business model through our new platform, which will integrate a new set of technologies including blockchain and microservices to create a global network of micro-services to facilitate the future growth of our business.
Example – In order to enhance our global presence and the competitiveness of our businesses, we have already established several subsidiaries in Japan, South Korea and Australia and will expand internationally as we focus our effort on the two regions and the Asia Pacific region. This has made the business of Roca in the United States more attractive than it has been before, since the development of the new platform was accelerated with the financial support of our clients. We are very excited to begin negotiations with our new European business partners.
Example – In order to strengthen the competitiveness of our business, we will begin the development of international business initiatives within the three areas of strategic development: marketing, development and business intelligence. We are planning to focus in the areas of the development of microbusiness, business data, and financial literacy. In this phase, you are going to receive our daily updates as development work progresses. We intend to continue to grow and develop our online platforms on a high level to serve small customers and large organizations through our new platform.
Example – Our global business strategy will be focusing principally on helping our clients in Asia and in Latin America. In this phase, we have already established a dedicated staff to develop and support our international initiatives to promote the growth
On the other hand, Sanitec strategy has much to do with acquisitions and not setting up new production factories abroad. Sanitec is not a brand. It accumulates a series of leading brands that are mostly local and is continuosly working towards a more integrated organisation, taking advantages of the local differences and sinergies among complementary brands.
American Standard has made its own way through multiple mergers but keeping its brand-name products and paying special attention to a set of values provided to every employee through the world.
Financial conditionWe have studied the consolidated financial statements of the three companies, comprising the balance sheets as of December 31, 2001 and the related statements of income and changes in financial position and equity. We have limited our analysis to the year referred in order to respect the scope of this case.
Financial highlightsHelsinki GroupSanitec GroupAmericanStandardReturn on assets (ROA)-0,2%Return on equity (ROE)-18,0%10,7%14,4%Roca is the company which shows better financial position, as revelas the analysis of the different ratios shown on the graphic (exhibit 1). The solidity of its financial structure is supported by two factors:
The high proportion of its equity (603 MM Ђ) which represents the 57% over total balance sheet and allows the company to self-finance the investment in Fixed Assets. It also remarkable to say that almost 84% of this volume comes from retained earnings from previous years, which confer the company a high degree of autonomy from its shareholders.
Its low debt ratio (0,7) among the lowest of its sector and with a balanced proportion between short-term debt and revolving facilities, such as creditors liabilities.
These two factors have been crucial in order to undertake the expansion strategy without eroding neither the margins nor the financial solidity of the firm.
The different ratios show the Companyґs operating performance remarkably higher than its two competitors; not only in terms of margins but also in terms of solvency and liquidity (cash-flows).
American StandardAmerican Standard presents the worst financial condition of the three of them. Mainly due to the high levels of debt, which the company has incurred in order to finance its international expansion and the recent restructuring program that also included asset impairment charges.
Related to their international expansion, some acquisitions arose a goodwill of 929 MM USA$, whose amortization has eroded the margins as can be seen in the Profit and Loss account of the company; strictly speaking,