Three key dates: 1908, 1934 and 1966 mark the development of the company Zodiac during the 20th century. The creation of the French society of airships in 1908 signaled the start up of the era in the world of the nascent aviation industry. In 1934, the first prototype of Canoeing was designed by an engineer Pierre Debroutelle. This marked the beginning of a turnaround in the boating industry as a flagship product with inflatable boats was introduced that would ensure brand awareness in the sector.
[...] The acquisition of Sevylor manufacturer of products for flexible structures, especially recreational facilities bags - in 1981, led to significant synergies for Zodiac with respect to manufacturing costs and raw materials. Firstly, this acquisition allowed it to reduce the unit cost of production by taking advantage of synergies between manufacturing inflatable recreational facilities (swimming pools, mattresses, etc.) and emergency evacuation systems (chutes, floats emergency, life jackets). The firm was able to increase efficiency by combining operations using similar processes. Moreover, it is quite likely that the acquisition of Sevylor assured discounts on raw materials (PVC) for its sister concerns as well because of larger orders. [...]
[...] The company was strengthened while increasing its presence in the growing market of aviation, a fact which may possibly result in higher operating margins - The risks of external growth As we saw earlier, Zodiac has a definite strategy of growth. The group gives priority to acquisitions in the aerospace industry and carries out targeted acquisitions of smaller cost units in the marine sector, depending on the market conditions. These opportunistic acquisitions may cause a lack of clarity of strategy of the Zodiac, and therefore elicit a negative reaction from the market. [...]
[...] portfolio Despite the diversification of its activities, Zodiac has put in place a system that ensures the coherence of its activities. From the field of nautical military equipment, the company has gradually diversified into sectors with higher value added services such as civil aviation and military, while retaining its historical specialization in tires. This slow development is the result of the inexorable decline of defense budgets of the various countries of the OECD. This necessary diversification has led to a repositioning by the management Zodiac which chose to allow a broad managerial autonomy for the various subsidiaries. [...]
[...] Several analysts as well as the president of Zodiac say that the company does not have enough debt. In these circumstances the group fulfills its requirement through external growth. Such a policy proves to be quite effective. In addition, Zodiac, according to its CEO, has good cash flow which enables them to make acquisitions in the maritime industry, while speeding up debt relief. Thus, Zodiac is now in a good position to make acquisitions. The difficulty is to find appropriate niches and meet the challenges of external growth - The challenges of external growth The main issue with the policy of external growth is the opportunity to gain market share quickly in many countries. [...]
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