Alcoa CEO Alain Belda, in spring 2007, was disturbed about the organization’s market position in light of escalated rivalry from emerging markets.China's recent entry into the aluminum marketplace was affecting both demand and supply.
Additionally, downstream and upstream product was coming online from other elements of the world, including Russia. As a result, Alcoa had lost its historical marketplace dominance and stock premium. Belda was convinced that for Alcoa to recover its leadership position, the organization would need to increase efficiencies by enlarging diversification, its scale and reach.
The acquisition of a big competition presented the greatest opportunity to accomplish this target and, consequently, Canadian rival, Alcan particularly intrigued him because its assets would complement Alcoa's portfolio and improve its reach. Further, Alcan had sold off non-aluminum assets, basically making it a pure play in aluminum. That and its access to relatively low-cost Canadian hydro power made it an even more intriguing acquisition opportunity for Alcoa. Nonetheless, another major competitor, Rio Tinto, was also curious in Alcan; the company was in play.
PUBLICATION DATE: October 22, 2013 PRODUCT #: 114029-PDF-ENG
This is just an excerpt. This case is about STRATEGY & EXECUTION
Related Case Solutions & Analyses:
China Post
Using Social and Economic Incentives to Discourage Chinese Suppliers From Product Adulteration
Escapes Outdoor Living Designs Inc.
Scaling a Startup: People and Organizational Issues
The China Entrepreneurs Forum
Belton Semiconductors (B)
On the Ropes: Knock Out! Panties
Barbara Lynch Gruppo: An Entrepreneurial Journey
From Blues Brother to Industry Leader: Growing Revenues at ParkNPool
The Buenos Aires-Colonia Bridge (B): Sequel
