Subject category:
Strategy and General Management
Published by:
Babson College
Version: 21 October 1999
Length: 30 pages
Data source: Field research
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Abstract
This is the second of a three-case series (399-140-1 to 399-142-1). In mid-1994, a new leadership of Sulzer Infra takes charge as company profits decline sharply with deepening recession across Europe. Through the early 1990s, Sulzer Infra has undertaken a new strategy of vertical expansion and has become the leading European provider of building services in the commercial building construction industry. However, after thirteen profitable years, Sulzer Infra faces substantial losses. The new president is aware that the parent corporation will change the status of Sulzer Infra from pillar business to turnaround, a category with strict corporate requirements for return to profitability within three years. Sulzer Infra management considers several strategy options, among which are selling off business or individual units, splitting geographic markets into small regional units with separate P&L responsibility, and liquidating fixed assets. Decisions are further complicated by contrasting opinions on whether Sulzer Infra, specialising in contract engineering, should remain part of Sulzer Corporation, a technology company. This case is suitable for strategic management courses.
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Abstract
This is the second of a three-case series (399-140-1 to 399-142-1). In mid-1994, a new leadership of Sulzer Infra takes charge as company profits decline sharply with deepening recession across Europe. Through the early 1990s, Sulzer Infra has undertaken a new strategy of vertical expansion and has become the leading European provider of building services in the commercial building construction industry. However, after thirteen profitable years, Sulzer Infra faces substantial losses. The new president is aware that the parent corporation will change the status of Sulzer Infra from pillar business to turnaround, a category with strict corporate requirements for return to profitability within three years. Sulzer Infra management considers several strategy options, among which are selling off business or individual units, splitting geographic markets into small regional units with separate P&L responsibility, and liquidating fixed assets. Decisions are further complicated by contrasting opinions on whether Sulzer Infra, specialising in contract engineering, should remain part of Sulzer Corporation, a technology company. This case is suitable for strategic management courses.