Subject category:
Strategy and General Management
Published by:
International Institute for Management Development (IMD)
Version: 02.12.2009
Length: 12 pages
Data source: Field research
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Abstract
This is part of a case series. CHINT started in the switchgear business in 1984 with an initial investment of RMB30,000 (Renminbi) in a poor region at that time. As of 2006, it was generating sales of over 2 billion euros. What led to this transformation? CHINT achieved profitable growth via quality control and R&D investment. Through brand licensing and share exchange, Mr Nan, the Founder, Owner and Chairman of the CHINT Group, controlled a large production base comprised of many local producers. Nan's products were sold through an extensive distribution network that reached cities and countryside and successfully won CHINT the top position in China's low voltage market. CHINT served China's mid-tier segment, providing a wide range of quality low-voltage products. However, MNCs (multinational corporations), such as ABB, Siemens and Schneider Electric, were now starting to move into the mid-tier segment. Given their technology, know-how and resources, Nan had good reason to be worried. In addition to MNCs, other local competitors were catching up. In Wenzhou alone, CHINT faced competition from Tengen and People Electrical Apparatus Group and from many niche players across China. These companies were also improving their product quality while remaining price competitive.
Location:
Industry:
Size:
Sales in 2006 EUR2 billion
Other setting(s):
April 2009
About
Abstract
This is part of a case series. CHINT started in the switchgear business in 1984 with an initial investment of RMB30,000 (Renminbi) in a poor region at that time. As of 2006, it was generating sales of over 2 billion euros. What led to this transformation? CHINT achieved profitable growth via quality control and R&D investment. Through brand licensing and share exchange, Mr Nan, the Founder, Owner and Chairman of the CHINT Group, controlled a large production base comprised of many local producers. Nan's products were sold through an extensive distribution network that reached cities and countryside and successfully won CHINT the top position in China's low voltage market. CHINT served China's mid-tier segment, providing a wide range of quality low-voltage products. However, MNCs (multinational corporations), such as ABB, Siemens and Schneider Electric, were now starting to move into the mid-tier segment. Given their technology, know-how and resources, Nan had good reason to be worried. In addition to MNCs, other local competitors were catching up. In Wenzhou alone, CHINT faced competition from Tengen and People Electrical Apparatus Group and from many niche players across China. These companies were also improving their product quality while remaining price competitive.
Settings
Location:
Industry:
Size:
Sales in 2006 EUR2 billion
Other setting(s):
April 2009