Business relationships in an international setting: The case study of Texla

Abstract

For more than five decades, Texla has been providing a laminated product with a wide range of variety for its clients ever since the first product was developed in a hen house on September 12th, 1962. At that time Nils Bengtsson, father of Bengt Bengtsson the current CEO of Texla, had a vision of something great for the future. A lot has happened since that day both in terms of organization and products. Because of the dedication and creativity Texla has been fuelled with innovation and curiosity for new possibilities over the years. A company such as Texla with more than 50 years of practice and experience shows us stability but the road leading up to today's business has not always been straightforward(Johansson, 2014). In 1970, Texla managed to establish contracts with the automotive industry in order to start laminating textiles for this sector. Volvo became Texla's biggest client and more fabrics became mass-produced. Prospects were looking good for the future and in 1987 the company Tentex was founded. Tentex has today merged with the Texla Group but because of Tentex working as a separate company at that time, Texla had the opportunity to offer a wider range of alternative lamination techniques of fabrics and finished modules for its clients. This decision led to an increasing turnover for Texla and in the same year Texla decided to establish a new production facility in Belgium. Between 1989 and 1998 a joint-venture agreement concerning this facility was concluded between Texla and Guilford and in 2002 Texla decided to buy an additional production facility in Portugal. Texla decided to establish a facility in Portugal due to the fact that they got a really good price on the factory itself mainly but also in order to be able to market their product further in west-Europe and north of Africa (Johansson, 2014). In order to reach a wider market and more efficiently manage the company, Texla had to develop a new strategic plan. The costs for transports were now of the essence since the clients had started to develop a more cost-oriented mind-set over the years. So in order not to lose these vital customers, Texla had to establish another production facility in either Slovakia or Czech Republic. The declarations for this would be so that Texla could get a better proximity to the sewing industry connected to Texla's automotive clients. So in 2006 Texla decides to establish a fourth production facility in Czech Republic due to the proximity to their clients and their businesses but also since the overall costs were much lower in Czech Republic than in the rest of Europe. Czech Republic was also known to be quite advance in terms of industrialization and the infrastructure made the communication in the country much better than the alternative. Moreover, in 2008 Texla started to move more of their projects to their facility in Czech Republic due to a very successful collaboration with the Chamber of Commerce in Prague. This reallocation was very successful and Texla now managed to cover the whole European market more efficiently (Johansson, 2014). When the economic crisis came to affect Europe during this time, Texla Sweden had to start looking for new markets to adopt. By 2010 Texla Sweden had managed to balance its customer segment from being 95% consisting of clients in the automotive industry, to only 50%. As of today, the automotive industry only stands for 20-25% whilst the bedding industry stands for almost 50 % of the production in Sweden. This transition is stated to be the most radical change that the Texla Group ever had to experience but the end-result has made the organization in general more productive and more adaptable to changes (Johansson, 2014). New processes and opportunities are in continuous development and Texla is today a Full Service Provider (FSP) for many of its clients. However, the costs associated with the facility in Belgium have today become a more relevant problem than it used to be even though the facility is considered to be very autonomous. The facility in Belgium provides the same type of products for the same type of customer base as in Portugal and Czech Republic but with much lower margins due to the high production costs (Johansson, 2014).