Renco Strengths And Weaknesses

Strengths:
1. The success of the Renco Group assets depends on the ability to focus the efforts on specific industrial sectors, focusing on solving technological problems and customer service (Deloitte, 2015). So that it brings superior customer value on niche markets in which it competes.
2. Work ethics and constant strive in optimizing its work activities have led Renco Services Division to become a reliable choice for first class clients such as General Electric, ABB, and ENI Group (Renco-Service Division, (n.d.)).
3. Renco has strong R&D department, recently they have introduced Gas Recovery System, a unique, patented solution to help users of gas processing equipment reducing greenhouse emissions. Besides the benefits to the environment,

Renco is certified according to ISO 9001:2008 and ISO 14001:2004 standards and OHSAS 18001:2007. It allows Renco continuously expand its activities and today Renco provides its clients a wide range of quality services, ranging from technical assistance and consulting work to full turn-key projects (Renco SpA - Certificates (n.d.)).
Weaknesses:
1. Economic results and profitability of the Renco depend greatly on the development and distribution of dividends of the other Group companies and therefore, ultimately, it reflects the economic trend and investment policies (Admission Document, 2014). Negative results recorded by other Group companies could influence negatively to the economic situation and financial position of the Renco and the Group.
2. Risks associated with the wrong estimate of the costs for the accomplishment of orders. Based on the estimated contract costs (in particular, the estimation of prices of raw materials, materials construction, labor, energy and for subcontracting costs) can be reduced with the increase of these costs in the implementation of the order or further costs involved to ensure certain quality standards and the payment of contractual penalties in case of delays in delivery (Admission Document,

Host-country instability and adverse government actions are among the examples of political risks that should be properly assessed and managed, especially when projects are located in emerging markets like Kazakhstan.
When companies pursue opportunities for growth in emerging markets, they face many complex risks, including political risks. Every minor adjustment in politics produce changes in expected outcomes or decrease/increase the probability of achieving business objectives. This is true also for Renco. It is almost one year that
Kazakhstan’s political environment decided to switch from “constant rate dollar” to “floating exchange rate system” (Ostroukh, 2015). Since then Kazakhstani fiscal policy changed. Kazakhstani government allowed the National Tenge to float against US dollar (Ostroukh, 2015). As a result, weak National Tenge started to devaluate dramatically against US dollar. This condition leads to an economic crisis in Kazakhstan which has the direct impact on different industries including Renco SpA subsidiaries in Kazakhstan. Because of the crisis in the country, some projects stopped its operation or were put back for certain periods. This political change was a cause of variations in different industries’ business objectives and actions. This trend can lead a decrease in demand for different services offered by Renco