Product details

This is part of a case series. Danfoss Motion Controls purchased Holip in November 2005. After acquisition, Danfoss used a dual-brand strategy and Holip was left as an independent business with its own sales and distribution network. The lean cost structure was maintained and accounting, IT, HR and manufacturing were not integrated with Danfoss' to any significant degree. Financial reporting was required to be consistent with Danfoss's standards; employee benefits were improved, and plants were brought up to the minimum environmental and safety standards. The most important synergy came from joint procurement of components and Danfoss also benefited from Holip's low cost production capability by transferring certain Danfoss-branded product lines to Holip. Few synergies were achieved in R&D. Competition in the good enough segment intensified and the growth of the Holip-branded line had slowed. In November 2008 Jessen had to recommend what Danfoss should do with the Holip business and whether the dual brand structure should be continued. 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.