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Tredegar Industries Analysis: Connecting With the Value Chain
Summary of the Case
Tredegar Industries has emerged as a conglomerate that has the potential to expand globally in the plastics, aluminum and vinyl, and energy segments they compete in today predominantly in the U.S. The case study indicates that they have also had extensive investments throughout technology early-venture funds including their Tredegar Investments. The intent of this fund is to invest in communications, IT and life sciences technologies. Molecumetrics Ltd. Is another acquisition that also adds to the conglomerate-based approach Tredegar is taking to growth. The case study indicates that profitability as measured by Net Income continues to increase, yet there is little progress in the more niche-based markets the company initially invests in yet sees only small to non-significant growth. The reset on strategies is a step in the right direction yet not enough, as the conglomerate still lacks a unified strategy overall.
Statement of the Problem
Tredegar Industries has lost connection with its value chains across the many businesses it is attempting...
The blistering pace of transactions, acquisitions, mergers, and alliances all cloud the fact that their core business model is in a continual state of flux, unfocused on a core vision and mission. The rapid pace of growth by acquisition and mergers has also left each of the divisions disconnected from each other, often battling politically for shared resources and attention on their strategies. In highly decentralized organizational structures the potential exists for internal conflict and politics, all aimed at gaining an advantage in the availability of resources and talent (Walters, Bhattacharjya, Chapman, 2011). This is exactly what has happened with Tredegar Industries and one of the factors that have led to the lower Net Income and Revenue. The lack of internal coordination is leading to significant reductions in expense management and efficiencies, costing the company significantly as a result. Because of this lack of internal communication, the majority of company divisions fail to integrate into the broader value chains each compete and rely on for growth.
Proposed Solution
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References
Porter, Michael E.. (1986). Changing Patterns of International Competition. California Management Review, 28(2), 9.
David Walters, Jyotirmoyee Bhattacharjya, & Judith Chapman. (2011). Drivers of falling interaction costs in global business networks. Competitiveness Review, 21(1), 9-28.
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