Danfoss Motion Controls and Holip (A)
Danfoss decided to make China a second home market – aiming for growth of 50% a year and quadrupling sales in China by 2008. This case focuses on Danfoss China’s Motion Control division, which among other things sold frequency converters. As in many markets in China, the market in which Danfoss was competing had two major segments: the premium segment dominated by leading multinationals and the “good enough” segment where many of the key players are local Chinese companies. At the time of the case the good enough segment was growing about three times as quickly as the premium segment and Danfoss was thinking about entering this fast growing market. To do this Danfoss had evaluated several of the local Chinese players as acquisitions targets, and had picked Holip as the best potential target. Erhardt Jessen, a vice president of the division, has to recommend whether to acquire Holip and, if yes, the strategy that Danfoss Motion Controls should adopt for Holip. Key issues that he would have to address included the continued use of the Holip brand and the degree to which Holip should be integrated into Danfoss. The (A) case describes the overall Danfoss situation and issues and describes in some detail the history of Holip, its business model and its strategy. It was written with the support of both Danfoss and Holip management teams.
The case gives participants an opportunity to deepen their understanding of the issues a multinational manufacturer of high performance products must address as it faces increasing competition from local players manufacturing good enough products. Participants also have an opportunity to learn how a somewhat typical small, low cost Chinese manufacturer operates. Participants can look at the pros and cons of entering the good enough segment and the advantages and disadvantages of using an acquisition as the entry vehicle. Finally, they have an opportunity to understand the issues that need to be resolved to successfully leverage the acquisition to achieve the company’s objectives in the good enough market segment. Depending on the course’s learning objectives, the Danfoss-Holip case series can be taught either by using the A case followed by the B case, or by using the A1 and A2 cases followed by the B-case.
May 2005
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 ...
There is a Chinese saying that wealth does not last beyond three generations, and the reality is that sustaining family businesses is a significant...
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
Research Information & Knowledge Hub for additional information on IMD publications