ABB process automation: Competing in the mid-tier market in China
ABB was facing increasing competition in the process automation market in China from local, good enough (mid-tier) competitors. Senior management at ABB had to decide whether ABB should enter the mid-tier market itself, and, if so, whether to do it by acquiring a local competitor or by growing into the market segment organically. ABB decided to enter the segment by organic growth setting up a new company, Winmation, which employed a different business model than the traditional ABB model. The case describes the launch strategy and the initial results. At the end of the case, Lance Zhao, the general manager of Winmation has to decide whether he needs to modify the strategy in response to some early challenges.
The case gives participants an opportunity to develop a deeper understanding of the true nature of many low cost competitors based in China. Contrary to the thinking of many Western executives, these companies can have significantly lower costs than the global market leaders, their products are good enough to meet the needs of many customers, and despite very low prices these companies can be quite profitable. Participants also have an opportunity to consider the pros and cons of entering the mid-tier market organically or by acquisition. Finally, they can discuss some of the issues a large, sophisticated European company faced as it entered the good enough market segment.
Asea Brown Boveri
2010
Cranfield University
Wharley End Beds MK43 0JR, UK
Tel +44 (0)1234 750903
Email [email protected]
Harvard Business School Publishing
60 Harvard Way, Boston MA 02163, USA
Tel (800) 545-7685 Tel (617)-783-7600
Fax (617) 783-7666
Email [email protected]
NUCB Business School
1-3-1 Nishiki Naka
Nagoya Aichi, Japan 460-0003
Tel +81 52 20 38 111
Email [email protected]
IMD retains all proprietary interests in its case studies and notes. Without prior written permission, IMD cases and notes may not be reproduced, used, translated, included in books or other publications, distributed in any form or by any means, stored in a database or in other retrieval systems. For additional copyright information related to case studies, please contact Case Services.
Research Information & Knowledge Hub for additional information on IMD publications
In this study, we analyze how the performance-aspiration gap influences strategic change in family firms, providing evidence of the moderating role...
The call by the former Italian prime minister and ECB president for massive investment in the EU is a wake-up call to Europe's economic stagnation....
The case highlights the significant role played by the International Olympic Committee (IOC) in reducing its environmental footprint and promoting ...
Research Information & Knowledge Hub for additional information on IMD publications
Research Information & Knowledge Hub for additional information on IMD publications
in I by IMD
Research Information & Knowledge Hub for additional information on IMD publications
in Review of Managerial Science October 2024, vol. 18, pp. 2981-3005 https://doi.org/10.1007/s11846-023-00703-3
Research Information & Knowledge Hub for additional information on IMD publications
Research Information & Knowledge Hub for additional information on IMD publications
Research Information & Knowledge Hub for additional information on IMD publications
Research Information & Knowledge Hub for additional information on IMD publications
Research Information & Knowledge Hub for additional information on IMD publications
Research Information & Knowledge Hub for additional information on IMD publications
in I by IMD 9 September 2024
Research Information & Knowledge Hub for additional information on IMD publications