Zumwald Ag

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Zumwald AG

Background of the Case

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Managing Director: Rolf Fettinger

Zumwald AG produced and sold:

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Medical diagnostic imaging systems

Biomedical test equipment and instrumentation

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Company headquarters is in Cologne, Germany

It is organized into 6 operating division

Total Annual Revenues were more than 3B euroS

Highly decentralized organization

Partly vertical integrated

Background of the Case


ISD, Imaging Systems Division; Managing Director: Conrad Bauer


sold complex Ultrasound and MRI; selling at a price range of 500,000 to 1M euros


Heidelberg, Heidelberg Division; Managing Director: Paul Halperin

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sold high-resolution monitors, graphic controllers & display subsystems

half of its sales were made to outside customer

ISD was one of Heidelberg s major inside customer


ECD, Electronic Components Division; Managing Director: Christian Schonberg

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sold application-specific integrated circuits and subassemblies

originally established as a captive supplier to other Zumwald division, but in the last decade had found external markets for its products

Manufacturing Process









The Dispute

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In 2001, ISD designed a new ultrasound imaging system called X73

Heidelberg was compensated for the full cost of the time its employees spent on this project

After the specifications were set, ISD Managers solicited bids for the materials need to produce X73

Heidelberg was asked to bid to supply the displays needed for production

Two other outside companies participated

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Bogardus NV

Display Technologies Plc

The Problem


After discussing the bids with ISD s management team, Conrad Bauer, ISD managing director have decided to buy its display systems fro Display Technologies Plc

Paul Halperin, Heidelberg s General Manager was...