Voestalpine AG, a public company located in Linz, Austria, was examining opportunities for growth. The company considers that to meet the needs of its customers, notably automobile, rail and construction, it has to grow. Further, the steel industry in Europe is in a process of consolidation. The company has a very strong balance sheet but due to its ownership structure (35 per cent is owned by the Austrian government), its market value is considerably lower than its competitors, also providing a rationale for growth. The company is profitable and focuses on value added products. In the (A) case the decision to buy two steel plants in Poland is examined and looks at the strategic issues and concerns relating to this expansion. The supplement, Voestalpine AG (B), product number 9B07M033, provides opportunity for the student to assess methods of strategic execution.
KTM is a small motorcycle manufacturing company located in Austria. As a result of difficult economic conditions in 1999, KTM went private with the help of the venture capital firm BC European Capital (BC). Following a couple of years of strong growth, BC is looking to liquidate its position and move on. KTM is faced with the decision of determining the best means to repurchase BC's equity position in the firm and leave the firm with enough financial flexibility to continue to pursue its rapid expansion plans.
KTM was a leading sport motorcycle company based in Austria with sales internationally. In 2005, the company was considering expanding into all terrain vehicles (ATVs), a market which was experiencing mid to high double-digit sales growth with healthy operating margins. There were several options open to KTM to expand into the ATV market, including internal development, acquisition of another firm with capabilities in the area of allying with an ATV manufacturer. The chief executive officer had to consider the fit of the ATV business with KTM's core business as well as the implications of the various options for ATV market entry on maintaining control of KTM, achieving KTM's growth objectives, and effectively exploiting the ATV opportunity in an international context. This case allow students to determine how best to pursue a related market to maximize revenue and cost synergies, learning, and control of the firm. This case can be used with KTM: Ready to Race, product 9B05M036.