Davis Case Study

Generally, profit maximization is the ultimate goal of setting up a business. Every business investment is done at the backdrop of yielding a profitable financial turnover for its shareholders. It is equally true that at times some investment failed to yield the desired profitable turnover. In such instances, the shareholders will have to make strategic decision in order to minimize loss and maximize profit. According to the Davis case study, two major ways in which a company can grow are: International Expansion and Acquisition. (The Time 100)

1. International Expansion: setting up a business in your local community or within your nation boundaries is good because it gives you access to your local market. However, if you are going to maximize

The result is obvious, an increase in sales which can translate into an increase in profitability.

2. Acquisition: this is the process of taking over an already existing business, either locally or internationally. This is another viable way of growing your business. At times it is expedient to acquire a business that has already being established instead of setting up a new business. The tendency to retain the same customers or even increase the number is very likely, depending on the impact the business you are acquiring has made. This will definitely shield you from some of the frustrating rigorous process which you might potentially pass through when starting a new business. (The Time 100) A typical example in this instance of acquisition is the acquisition of Brendsen by the Davie Service Group. The privatization of many public corporations in Greece is another typical example. Businesses that were once owned by the government are now been sold to private entities because the government can no longer finance its operation

The right opportunity creates a viable economic environment for any business to succeed. Having the resources is good but investing at the right opportune time is most important. The acquisition of Berendsen provided such a good opportunity for the Davis Service Group because Berendsen was already established in a good number of EU countries (Denmark, Sweden, Norway, Austria, the Netherlands, Poland and Germany.) and by then, it was the dominant textile service supplier within the above mentioned geographical periphery. This automatically accorded the Davies Service Group the opportunity to sell their goods and services to a wider market – they were ushered into an already established networks and customer relationships. This will automatically translate into an increase in their financial turnover. (The Time