Kralovopolska A.S. Term Papers

Since 1889, Kralovopolska A.S. headquartered in Brno Czechoslovakia has manufactured a wide variety of engineering-related products such as railway vehicles, steel structures, cranes, environmental and water purification systems and nuclear power safety and monitoring equipment, with recent emphasis on production for the petrochemical industry.  The controlled economy of the communist era has left the firm with outmoded production facilities and inadequate research and development resources, which hampers its ability to compete internationally with more technologically advanced firms.  Since the 1992 privatization of the firm, it has increased resource allocation to modernizing production and has sought means to enhance its research and development effort, but continues to rely more heavily on domestic governmental assistance than many of its competitors in the international marketplace.  The firm’s long-term profitability remains questionable, and in 2000, its creditors forced it into involuntary bankruptcy protection.
    

Kralovopolska faces direct competition from a number of multinational engineering firms that specialize in the petrochemical services industry.  The firm recognizes that it has to make significant improvements in production processes and even to some degree in worker attitude toward production in order to compete effectively with the engineering services offered by firms from more economically advantaged nations. The international petrochemical engineering supply industry is highly competitive and includes major multinational firms such as Haliburton and Schlumburger that have reputations for excellence as well as long-standing relationships with existing customers. 

     The firm enjoys a political advantage that offsets to some degree some of its production and technology related shortcomings. In some regions of the globe such as Iraq and Iran, government owned and operated petrochemical industry is reluctant to do business with American or Western European businesses.  As an engineering firm from a currently non-aligned and former Soviet-bloc nation, Kralovopolska is frequently awarded contracts that it might not obtain in a free-market competitive bidding situation.  The firm has established customers in Syria at the HOMS refinery, in Egypt at the Alexandria refinery, in Iran at Jajarm Aluminum, and in several locations in the former USSR.  An additional advantage that the firm enjoys is its ability to offer a wide range of engineering services outside of the petrochemical sphere, which provides a degree of value-added services for its customers.

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