The document summarizes the growth of Davis Service Group, originally a conglomerate of three UK market leaders: Sunlight (textile maintenance), Elliott (building systems), and HSS (tool hire). The group needed to grow beyond the mature UK market. Textile and linen hire provided the most opportunities for strategic fit and growth. Davis Service Group expanded through acquiring Berendsen, the European leader in textile services, allowing it to capitalize on Berendsen's local experience and customer relationships across Europe. The acquisition provided a good opportunity for inorganic growth into new markets.

1. Davis Service Growing A Company
by International Acquisition
BY: JAHNVI SINGH (01561201718)
KARAN PANDAY (01961201718)
KRITI VERMA (02061201718)
SAKSHI SOLANKI (04061201718)

2. Brief of the case
This case describe and analyzes the growth of the
Davis Service Group, It used to a conglomerate of
three companies. each of which was the UK
market leader: Sunlight (textile maintenance'.
Elliott (building system) and HSS (tool The Group
needed to grow. Of the three businesses. textile
and linen hire provided the most opportunities
because of the strategic fit factor. The other
business were sold off to concentrate On textile
business in Europe and to provide funds to invest
further in this business.

3. FACTS OF THE CASE:
• Operates across Europe
• Headquarters in Landon
• Employs 17000 people
• Annual turnover more than 820 pounds
• Main Business is sunlight(textile maintenance), Elliot(bu;iding system) and HSS(tools
hire)
• Strongest Business is textile maintenance service provided by sunlights
• Total revenue from sunlight is 45%
• Apprach is Decentralized approach
• Unique Feature:
i. It is an international business
ii. It believes in giving local people responsibility for managing the markets they know
best.

4. Main Issue
• They operate only in UK which had become mature market due to which fewer
opportunities for growth
• The group needs to grow
• When they expand their business overseas they may face many issues like:
i. Language differences can lead to confusion
ii. Currency differences
iii. Cultural differences
iv. legal and administrative differences may vary across countries
v. Skill levels may vary between countries
• Competition in the market due to which sustaining the market share is very difficult for
them

5. Options To Address These Issues:
• International Expansion i.e the strategy growth
• Organic growth i.e increasing turnover of the existing business. Much of
the growth of sunlight and Berendsen involves organic growth. This can
also be described as increasing sales and new customers for the existing
business to improves profitability.
• Inorganic growth is through the acquisition of another business. A business
can grow by joining one or more companies together. This can be by
mergers or takeover

6. Recommended Alternative
Davis Services Group expanded and grew through the horizontal integration
in 2002 and it took over Berendsen Company, which was the leader of the
market of Europe in the same nature of business .The acquisition of the
company was helpful as it was not much difficult for the Davis group to take
over the Berendsen. Therefore inorganic growth was the best alternative to
all the issues addressed.

7. QUESTION 1: DESCRIBE TWO MAJOR WAYS IN WHICH A COMPANY
CAN GROW. GIVE EXAMPLES TO ILLUSTRATE THE TWO WAYS OF
GROWING.
• Two major ways in which a company can grow are:
o Inorganic growth
o Organic growth
1. Inorganic Growth: Inorganic growth is when business grows by joining two or more
companies together through mergers. takeovers. etc. Microsoft is a clear case of inorganic
growth because they have successfully completed more than mergers since 1986.
2. Organic Growth: Organic growth is when a company grows by increasing the turnover of the
existing businesses. Apple Inc, is probably an excellent example of Organic Growth. Apple-s
growth is driven by trend-setting product innovation like Macintosh. iMac. iPod etc. which
resulted in their increased annual turnover and market share.

8. QUESTION 2: BUSINESSES GROW WHEN THEY HAVE THE RESOURCES
TO EXPAND AND OPPORTUNITIES EXIST FOR GROWTH. EXPLAIN HOW THE ACQUISITION OF
BERENDSEN PROVIDED SUCH A GOOD OPPORTUNITY FOR THE DAVIS SERVICE GROUP.
• Acquiring Berendes was a good growth opportunity for the Davis Service
Group because they were market leader in the textile maintenance sector
and they had the annual turnover or 820 million pounds so definitely they
had the financial resources to expand and also they had the turnover
management system in providing textile services. Berendsen on the other
hand was also the market leader in the other geographic area in providing
the textile services and by building on Berendsen local experience and
local market contacts Davis Service Group could buy into established and
customer relationships, The barriers that usually companies face in the
international growth like language. cultural difference and currency
exchange were easy to overcome in this acquisition.

9. QUESTION 3: WHAT ASPECTS OF EUROPEAN UNION MARKETS HAVE
PARTICULARLY ENCOURAGED:
HORIZONTAL GROWTH OF THE DAVIS SERVICE GROUP
ORGANIC AS OPPOSED TO INORGANIC GROWTH
 Horizontal growth of the Davis services group:
it refers to a situation where two firms at the same stage of production join and we know that Davis
Service Group is joined with Sunlight and Berendsen. Horizontal integration made sense Because
Sunlight and Berendsen are specialist companies at the same stage of production. It was possible to
pool the knowledge and expertise of the two companies so that benefited.
 Organic as opposed to inorganic growth:
Organic growth is when the company increass the turnover of the existing business. Much of the
growth of sunlight and Berendsen involves organic growth. These businesses ate market leaders that
been able to learn a lot from catch Other and share good ideas and best practice. It is built on existing
resources is sometimes the only way to grow. Like in many Eastern Europeans countries that were the
part of the former Soviet Union. are few companies suitable 10 take over. Most businesses in the
countries had previously been government owned. They had poor equipment's and had no need to rent
out textiles.

10. QUESTION 4: IF THE COMPANY WERE TO EXPAND INTO NEW AREAS
OF THE GLOBE, WHERE WOULD you RECOMMEND AND WHY? WHAT FACTORS
MIGHT ENCOURAGE OR DISCOURAGE THIS CHOICE?
If the company has to expand somewhere in the near future, to me it will expanding the china market because the
market in is having a lot of scope even than the European union market. The important factors which necessary and
encouraged expansion of any company weather it is the type of integrations (vertical or horizontal). besides the
thinking of merging and taking over are:
o The factor which can he effective in making the expansion useful in the China market which think is most suitable
worldwide for the expansion of the business is the business potential and growth opportunities available in China.
o Davis needs to see some company at china for merging or taken over as the Chineses companies also will be
quite very much cheaper than the rest of the world.
o Language difference can lead to confusion but English is the main global business language spoken by many
people in China as well which helps in communication across different regions
o Skill level may Vary between countries but china labour is highly skilled and there is an availability Of cheap labour
which is the important encouraging factor to expand there

11. Factors that discouraged the choice of expand includes:
o Globally managing the staff is quite a big problem as tik distance of
china and Britain is very far
o The timing difference according is the biggest problem in assessment
of efficiency of work and better communication.
o Due to big difference in the region the shipment charges can cost high.
Cultural differences also exist because ways of behaving and doing
things vary between countries and even within countries. In business.
Some behavior such as buying decision may be the same. In other
cases it is important to respect local differences.