Strategic Routes to Value Creation: Exploring Choices and Outcomes

Abstract

This thesis provides a strategic evaluation of Fårup Betonindustri A/S, aimed at optimising its market value in preparation for a potential sale in five years. Fårup Betonindustri A/S manufactures concrete elements for prefabricated houses. The industry’s increasing emphasis on sustainable practices, driven by regulatory requirements and shifting consumer expectations, sets the context for this study. Applying strategic management theories and empirical data, the research identifies the most effective growth pathway for the company. Furthermore, a mixed-method approach grounded in interpretivism philosophy is employed to analyse Fårup Betonindustri A/S’s market position, quantitatively assess the value generated by both organic and acquisitive growth, and evaluate the organisational and managerial implications of these strategies.
The findings indicate that Fårup Betonindustri A/S holds a distinct market position, driven by its innovative and sustainable concrete solutions and strong brand reputation. However, a competitive analysis shows that the company generally underperforms financially compared to industry standards. Financial projections favour the organic growth strategy, which is expected to increase value by an average of 17 million DKK, compared to 13 million DKK from the acquisitive growth strategy. The organic growth strategy leverages Fårup Betonindustri A/S’s existing strengths. In contrast, while an acquisitive growth strategy could accelerate growth through acquisitions, it poses significant risks due to the company’s lack of experience and the high integration demands.
Considering these factors, this thesis recommends that Fårup Betonindustri A/S focus on organic growth over the next five years. The company should also consider restructuring its capital by increasing debt financing to improve financial efficiency and enhance shareholder value. Additionally, cultivating a culture of ambition that emphasises continuous improvement and innovation is advisable. This strategic direction will strengthen Fårup Beton’s competitive position and enhance its attractiveness as an acquisition target in the construction industry.