Product details

This is part of a case series. 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. 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 firms. At the time of the case Danfoss had its eye on the good enough segment which was growing about three times as quickly as the premium segment. To enter this market Danfoss evaluated several of the local Chinese players and picked Holip as the best potential acquisitions target. The case describes the history of Holip, its business model and its strategy. Erhardt Jessen, a Vice 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 Danfoss-Holip case series can be used in two ways. Option 1 uses the (A) case followed by the (B) case. The (A) case describes the Danfoss situation and issues and also describes Holip, its history, its business model and its strategy. The (B) case describes the acquisition and the developments between 2005 and 2008. Option 2 uses the (A1) and (A2) cases followed by the (B) case. The (A1) case is almost identical to the (A) case, but has less information on Holip. The (A2) case is written from the perspective of Holip management and gives detailed and complete information on Holip and the hopes and concerns of the Holip management team. The information on Danfoss is quite limited. Much of this additional information was not known to Danfoss at the time of the (A1) case. This allows the class to be split into two groups: one seeing the situation through the eyes of Danfoss and the other seeing the situation through the eyes of the Holip management team. This allows a richer discussion of the two perspectives in class than is possible if the whole class has read the (A) case.