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]
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Research Information & Knowledge Hub for additional information on IMD publications
Research Information & Knowledge Hub for additional information on IMD publications
This case study examines the remarkable evolution of Daikin Industries, a company that demonstrated resilience and innovation over nearly a century. Founded in 1924 by Akira Yamada in Osaka, Japan, Daikin originally focused on manufacturing aircra...
Daikin’s success in the Chinese air conditioning market serves as a compelling case study in strategic adaptation and collaboration. Following its entry into the market in the 1990s, Daikin faced formidable competition from well-established domest...
Research Information & Knowledge Hub for additional information on IMD publications
This case study examines the remarkable evolution of Daikin Industries, a company that demonstrated resilience and innovation over nearly a century. Founded in 1924 by Akira Yamada in Osaka, Japan, Daikin originally focused on manufacturing aircra...
Daikin’s success in the Chinese air conditioning market serves as a compelling case study in strategic adaptation and collaboration. Following its entry into the market in the 1990s, Daikin faced formidable competition from well-established domest...
Research Information & Knowledge Hub for additional information on IMD publications
This case study examines the remarkable evolution of Daikin Industries, a company that demonstrated resilience and innovation over nearly a century. Founded in 1924 by Akira Yamada in Osaka, Japan, Daikin originally focused on manufacturing aircra...
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Case reference: IMD-7-2514 ©2024
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