European Entrepreneurship Case Study Resource Centre

Sponsored by the European Commission for Industry & Enterprise under CIP (Competitiveness and Innovation framework Programme 2007 – 2013)

Project Code: ENT/CIP/09/E/N02S001 2011

Anders Müller Dental (Austria)

Andreas Müller University of Liechtenstein

Sascha Kraus University of Liechtenstein

The teaching notes for this case have been written by the case authors to instruct and aid academic lecturers, teachers, instructors, trainers and/or mentors in the use of this case study for classroom discussions, presentations and other forms of education. These teaching notes are a guideline, and do not have to be strictly enforced.

This case has been prepared as a basis for class discussion rather than to illustrate either the effective or ineffective handing of a business / administrative situation. Teaching Notes

Case Summary Anders Müller Dental AG, an Austrian leader in dental technology, originated in 2002 when the company was formed through the merger of two family enterprises, Anders Dental GmbH in Bregenz (Austria) and Müller Zahntechnik OG in Stuttgart (Germany). After 30 years of working closely together and developing relations that extended beyond a regular customer- supplier interaction, both sides decided to take advantage of the synergies that had developed between them and a merger followed shortly thereafter. With nearly 190 employees, the business had three shareholders that owned equal shares in the company: the two family holdings, Anders GmbH and Müller Holding GmbH, together with a financial investor. As a result of the merger, all redundant departments - R&D, the product manufacture and product management departments, along with all internal supply chain departments and the unfinished goods warehouse as well as the headquarters - were centralised in Bregenz at the main location of Anders Müller Dental AG. The finished goods as well as merchandise from other manufacturers, were warehoused in Stuttgart, assembled and customised as needed and delivered from Stuttgart directly to the customer.

In the years directly following the merger the main focus was for the company to present to the financial investor the increases in effectiveness and efficiency that had been previously determined, and the corresponding value enhancements that were to result. These were to be achieved by taking full advantage of the synergy effects coming from both companies, as well as through completing the internationalisation that had been planned during the preparation for the merger.

Dental technology methods had not changed greatly over the past decades. For that reason Anders Müller Dental AG developed several innovative products to enlarge effectiveness and ease the dental production process. By completing their product line, the company had gone from being a product manufacturer to a provider of entire manufacturing methods. Because Anders Müller Dental AG had a positive development in turnover for several years, the three shareholders examined different exit scenarios, and ultimately decided upon an initial public offering (IPO) as the best option for the company. Following this decision, after a series of

1 preparatory measures, a Dental Production Centre was founded as an AG (Inc.) in January of 2010. The Centre was located in St. Gallen (CH) and offered an overall service which met every need of the customers. Considering this organisational change an overall strategy needed to be determined which included the steps to take towards achieving the overall goal of exiting their ownership of the company through an Initial Public Offering.

Teaching objectives and target audience(s) Students will be expected to draw on their knowledge in strategic entrepreneurship, corporate entrepreneurship and evaluation of different business models. This case helps students to develop understanding and skills in dealing with the strategic management and corporate entrepreneurship of the company and executive process.

This case is intended for a course or seminar in entrepreneurship at the (under-)graduate level or for executive training courses. On the analytical dimension, the development of the company and the problem are stated throughout various strategic alternatives need to be developed. The students will be expected to analyze the data and generate decision criteria with an action plan.

Suggested teaching approach and strategy (including suggested case questions The case can be used as an individual exercise, or even, better within small group discussions. Students should be asked to read the case in advance. They should prepare answers to the assignment questions individually or in small groups in the first 30 minutes. Afterwards, the instructor can solicit responses to the questions, using the board to record students’ opinions and focus the discussion.

The case discussion will help students in understanding the practice of entrepreneurship and the questions which need to be answered according to the strategic orientation by dealing with different influential interest groups in an enterprise. Furthermore the case will help to deal with questions regarding the business model and how to adapt to environmental changes by entrepreneurial and innovative behavior. The following instructions/questions will stimulate students’ reflections and can be used as a guide for discussion:

1. Reflect the Product Portfolio and evaluate it according to profitability. 2. Would it be more successful to concentrate on the most rentable products or do you think a

2 wide offer respectively diversification is the best option? 3. What are the strengths and the weaknesses of the company? 4. Do you think the three locations are an advantage or disadvantage and why?

If you were in the position of Markus: 1. What actions should to be taken in the coming months? 2. What proposed overall strategy would you choose? 3. What would be your next steps towards achieving the overall goal of exiting their ownership of the company through an Initial Public Offering?

Analysis Techniques Recommended According to the current situation of the company as well as the whole market, students should evaluate all possible internal and external risks. The aim of the case is to determine an overall strategy for Andreas Müller AG based on a Pro and Con evaluation of the possibilities supposed in the case. Furthermore Pros and Cons of the steps taken in the past should be assessed. Finally the students are obliged to establish recommendations and details a regards to implementing their recommendation.

Additional Readings and References Behrends, T. (2009). Corporate Entrepreneurship und Organisationskultur. In H. Frank (Ed.), Corporate Entrepreneurship (2nd edn, pp. 43-81). Vienna: Facultas.

Frank, H., & Keßler, A. (2009). Corporate Entrepreneurship. In S. Kraus & M. Fink (Eds.), Entrepreneurship: Theorie und Fallstudien zu Gründungs-, Wachstums- und KMU- Management (pp. 135-154). Vienna: WUV.

Kaya, N. (2006). The impact of human resource management practices and corporate entrepreneurship on firm performance: evidence from Turkish firms. International Journal of Human Resource Management, 17(12), 2074-2090.

Kuratko, D. F., & Hodgetts, R. M. (1998). Entrepreneurship - A Contemporary Approach (4th edn). Fort Worth, TX: Dryden Press, 1998.

3 Lumpkin, G. T., & Dess, G. G. (1996). Clarifying the entrepreneurial orientation construct and linking it to performance. Academy of Management Review, 21(1), 135-172.

Schildknecht, R. (1992). Total Quality Management. Frankfurt/New York: Campus. Stevenson, H. H., & Gumpert, D. E. (1985). The heart of entrepreneurship. Harvard Business Review, 63(2), 85-94.

Stopford, J. M., & Baden-Fuller, C. W. F. (1994). Creating Corporate Entrepreneurship. Strategic Management Journal, 15(7), 521-536.

Venkataraman, S. (1989). The concept of fit in strategy research: Toward verbal and statistical correspondence. Academy of Management Review, 14(3), 423-444.

Suggested Strategy Development The approach to ask questions about business strategies depends on the role played in the business. As a manager, questions will focus on the system and the overall wellbeing of the company. As an investor, questions will focus on the company's financial activities.  What are the core competencies?  Do the company's day-to-day strategies work in the interest of its larger mission?  Evaluate the company policies and product development regarding the organisation's overall purpose, whether it is making money, providing an excellent product or improving the quality of life of its stakeholders.  Ask questions about the role of every task relative to the company's big picture strategy.  Are all assignments in line with the comprehensive business strategies.  Examine the company's bottom line. Do the income statements and balance sheets determine that the business strategy is working in the interest of earning a solid profit? Evaluate this financial information to determine whether the basic strategy is causing the business to spend more or earn less than it should.  Do the company's strategies help it to meet the needs of the customers?

Further question regarding the section ‘Future Goals’ in the case (search for specific articles on the topic if necessary):  Dental laboratories in the US, France, Italy, UK, and Japan are predominantly made up of small-sized laboratories, whereas a larger number of medium-sized laboratories exist in

4 Germany. How will laboratory size in these countries affect trends in the adoption of scanners and complete systems over the forecast period? How will these adoption rates affect revenue growth?  The recent changes to the French public reimbursement system in 2010 will allow for the coverage of all-ceramic restorations, including zirconia-based restorations. To what extent will the changes to the French public reimbursement system in 2010 affect the growth of the chairside and laboratory markets in the country over the forecast period? How will dentist and laboratory technician adoption patterns alter these trends?  There are a large number of dental clinics and dentist offices in Japan and there is considerable competition for patients. What is the potential for growth in the Japanese chairside market with the large number of dentists present? How will the competitive dynamics among dental practitioner’s impact unit sales in chairside complete system and intraoral scanner markets?  Despite the economic recession, the US and European dental CAD/CAM system markets experienced growth in 2009 while the Japanese market only experienced a slight contraction. What factors enabled the US and European markets to grow despite the financial downturn? How did the economic recession affect the growth of the chairside and laboratory CAD/CAM system markets differently in 2009? How was each of the specific countries in the global market affected?

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