Allan Rasmussen, Director of Coloplast A/S (Coloplast), is preparing to address Coloplast’s senior executives in Denmark. He has asked for your help in preparing a report for the leadership team. Ultimately, your report should help Coloplast’s executives decide whether the company was ready to take the next step in a major offshoring project to China, or whether it was better to implement internal organizational changes prior to embarking on a new offshoring journey. Please provide Coloplast with a recommendation, based on your analysis of the available case material.
Conduct a comprehensive analysis of the company’s current situation and alternatives. In other words, make sure you consider the key external and internal factors affecting the company (do not leave any critical variables out of the analysis). In preparing your analysis and arriving at your recommendations, you should be guided by the following:
What is Coloplast’s current strategic challenge (the problem statement/main issue of the case)?
What were the main factors determining the choice of location in Hungary?
What are the arguments for offshoring (in-house) versus outsourcing (to third parties)?
Identify and discuss the challenges associated with knowledge transfer between the Danish headquarters and the Hungarian production subsidiary.
How did relocation of production to Hungary influence Coloplast’s organization?
Why are standardization and structured interfaces among the value-chain activities so important?
What determined the configuration of Coloplast’s global value chain?
What are the organizational challenges facing Coloplast if it wants to establish production in China?
Recommendation:
Identify the best alternatives available to the company using the case data, logical reasoning, and creative thinking.
Define and explain the course of action that you think its managers should follow. (Your conclusions should fit logically with your analysis of the situation.) Explain how the company may implement your strategic suggestions.
You are expected to apply theoretical concepts and frameworks to your analysis as appropriate.
(Firm specific advantages (FSAs), Outsourcing, Offshoring, CAGE Model, Types of risk (economic, political, legal, reputational and business risks), EMNEs, and strategies of global sourcing (Global, transnational, simple international and multidomestic strategy)
