Vossloh: Restoring Trust after Two Consecutive Profit Warnings

Description

Vossloh AG is preparing for its annual December conference with investors and analysts. The company, whose core business has always been the railway engineering sector, had to issue two consecutive profit warnings in 2011, which sent its stock back to levels last seen only in the aftermath of the economic crisis of 2009–10. The company’s primary task is to find the right arguments to satisfy the conference participants and regain their trust. Vossloh’s business units, relevant business environments, and problems such as stock developments and the threat of hostile takeover are discussed. One of the basic issues is whether Vossloh should focus on the still very important home countries in Europe and further strengthen its attempts to increase its share in niche markets or focus more on emerging markets in Asia, South America and eastern Europe.

Learning Objective

The case can be used in strategic management courses in the final years of undergraduate studies, at the graduate level and at the executive level. It teaches students to use strategic management instruments and frameworks to explore the positioning of a typical mid-sized German company. It will help students to generate and evaluate suitable strategic options, adequately consider relations with all shareholders in such a setting and develop a roadmap for the involvement of the founding family facing the threat of a hostile takeover.

Keywords

Germany hostile takeover Profit warning stakeholder trust