Case: Walter Hundhausen Gmbh Essay

4141 Words Dec 25th, 2013 17 Pages
Final Exam 691G

Case: Walter Hundhausen Gmbh


Question 1:
Size up Germany’s foundry Industry? Is WH well positioned in it now and in the future?

The beginning of the new millennium has presented Walter Hundhausen (WH) with a big hurdle to jump. The German economy is experiencing economic stagnation, an aging population and a German labour market that is filled with many intrusive government regulations.
The German economy has been growing at an average rate of 0.6 percent per year for the last 4 years; making it one of the slowest growing economies in the Euro Zone. However, study’s suggests in 2004, the domestic economy is expected to grow above 2 percent. Moreover, one-third of Germany’s
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Their main objective is to resolve disputes through intensive informal contacts.
Strong Union Presence: The dual model in the industry consists of a collective bargaining agreement and codetermination. This dual system gives the unions a strong position within the foundry industry. Their presence has lead to numerous bouts of conflict with management when negotiating collective agreements and in some cases these disagreements lead to long and bitter strikes.
Above Average R&D Investment: R&D is a major competent in the casting foundry industry. R&D creates better products and above all reduces costs through the automation of the casting process. Moreover, by being a Tier 1 supplier, customers are expecting better products and lower costs year over year.
Frequent Technology Changes: In the casting process, technology changes occur frequently, in order to maintain lower sand-to-metal ratios and scrap ratios.
Largest European Foundry: Being the largest casting foundry in Europe, economies of scale can have significant cost savings, as the organization can purchase large amounts of scrap iron and steel.
Close Proximity to Clients: By being close to customers, shipping costs and delivery times are reduced substantially; giving the local casting foundry a cost advantage over their long distance competitors.
Efficient Sand Casting Process: The casting process is highly integrated and labour

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