Transition Process and Strategic Develpoment of Opavia-Lu


Term Paper, 2002
12 Pages, Grade: 1,3 (A)

Excerpt

History and privatization

The transition from centrally planned economy to market economy in Czech Republic needed the adaptation of global system changes that turned out to be more complicated and long term than expected before. The basic issue was the liberalization of prices and free trade on the one hand and privatization of governmental property on the other hand. The strategy was to implement the change as fast as possible by an economic healing shock. The privatization was planned as a short time task. The priority of this short term process was speed and volume.

The privatization process was accomplished by different methods. Nevertheless the most important method of privatization was the form of transformations of state owned assets to stock companies with the following privatization of the company stocks.

1.1. History and development of Opavia

1.1.1. Historcal development between 1840 - 1946

The history of Opavia – Lu dates back until 1840. In this year, the "Theodor Fiedor, spol. s.r.o." in Opava was founded by Kaspar Fiedor, the company that build the foundation for Čokoládovny, and succeeding Opavia – Lu. The first product of the company was wafers. In 1880 the son of Kaspar Fiedor, Theodor Fiedor established the factory production with industrial machines and ovens. In 1914 the company had already 60 employees and produced wafers, biscuits, tea-cakes, ginger bread, and cookies for the market of the Austrian-Hungarian Empire. In 1928 the company had more than 450 employees and already forty different brands.

1.1.2. Čokoládovny’s development under the planned economy (1946 – 1992)

In 1946, after the end of the Second World War, the Fiedor family was displaced to Germany and their company was placed under national administration. By gradual mergers and nationalisation of Czech factories producing biscuits and chocolate, the state owned company Čokoládovny was established in 1947. By this integration, about 200 biscuits and chocolate producing companies melted with Čokoládovny.

1.1.3. Joint venture of Danone and Nestle (1992 – 1999)

In 1992 the Czech government changed the former state owned company to a stock company and sold 43% to Copart which was a joint venture between Danone, France and Nestle, Switzerland. While these two were interested in different parts of the company, (Danone was interested in biscuits and Nestle in chocolates and sweets) the Czech government insisted on the clause in the contract that the two companies had to run Čokoládovny as a single company for at least seven years. In addition, they were not allowed to change the company name within this period. The main reason was the sensitivity of the Czech towards one of the most important Czech companies. An immediate split and change of name would have caused negative emotions within the Czech people. Another reason was to let the foreign companies develop their strategies and implement them in the whole company to secure a strong competitive position in the market. Within the following years Copart aquired step by step the majority (90%) of Čokoládovny.

1.1.4. Split of Čokoládovny (1999)

On 1st January 1999 Čokoládovny split into two companies: Danone Čokoládovny and Nestlé Čokoládovny . The reason was that each company can cooperate closer with its parent company. Nestlé Čokoládovny produced chocolate bars, chocolate and non-chocolate sweets under the brand names Orion, Sphinx, Zora and Nestle. The production facilities were located in Orion Praha, Maysa Hodonin, Zora Oloumoc, Sfinx Holesov and Lipo Liberec. Danone Čokoládovny focused on the production and sale of biscuits under the brand names of Opavia and Lu (the international biscuit brand of Danone).

1.1.5. Change of the company name (2001)

On 1st January 2001 the company changed its name from the original Danone Čokoládovny to Opavia - LU a. s. The reason for the change was that the consumer was used to the brand name Opavia and the Danone management wanted to shift the public perception away from Čokoládovny towards Danone. Lu is the symbol for the international “group” or “network“ that Opavia belongs to, since being owned by Danone.

1.2. History and development of Danone

1.2.1. Historcal development of Danone group (1966-1973)

25 February 1966. Two glass companies, the Souchon-Neuvesel glassworks and Glaces de Boussois, announced that they were planning to merge. The former, based in the Lyon region, produced bottles, industrial containers, flacons and table glassware (container glass), while the second, located in northern France, made windows for the building and automobile industries (plate glass). The aim of both companies was to cope with changing market trends toward "no-deposit, no-return" bottles and to launch a company that would be large and competitive enough for the expanding common Market. Antoine Riboud was appointed chairman of Boussois-Souchon-Neuvesel - soon to be known as BSN - which had an annual turnover of 1 billion francs.

Encouraged by its takeover bid for Saint-Gobain, the French glass industry giant, in January 1969, BSN took control of Evian (which, in addition to Badoit, owned the brand names Jacquemaire and Fali), Kronenbourg and the European Breweries Company in 1970. BSN felt that glass bottles were bound to lose their monopoly in the beverage industry, but the company had no intention of starting to make plastic, cardboard or metal containers since it had no ties with the petrochemicals, forestry or steel industries. A better idea was to start making the contents for its containers: it seemed obvious that bottles and beverages go together, as do baby foods and glass jars. In 1970, BSN became at a stroke the leading French manufacturer of beer, mineral waters and baby food.

[...]

Excerpt out of 12 pages

Details

Title
Transition Process and Strategic Develpoment of Opavia-Lu
College
University of Economics, Prague  (Faculty of Management)
Course
Managerial Systems
Grade
1,3 (A)
Author
Year
2002
Pages
12
Catalog Number
V9342
ISBN (eBook)
9783638160711
File size
843 KB
Language
English
Tags
Aquisition, Danone, Nestle, Cokoladovny, Transition perid process
Quote paper
Mark Bauer (Author), 2002, Transition Process and Strategic Develpoment of Opavia-Lu, Munich, GRIN Verlag, https://www.grin.com/document/9342

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