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Negotiating Partnerships: Increase profits and reduce risks by Iwar Unt, Keld Jensen

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Alternative strategies for the buyer

Example 1: Outsourcing

A real estate company decides to concentrate its resources on its core business and for that reason wants an external contractor to take over the production of heat and water. In the existing situation the company has its own district heating station operated by the company’s own staff. The current expenses to staff and maintenance are $10 million a year. There are statistics for the last 15 years which show how much energy you get out of every ton of oil you use as fuel. There are furthermore statistics which show that operational failures occur for 50 hours on average every year.

It is the goal of the management to press the operating costs down by 10 per cent. The demand for quality ...

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