Environment, Initial Position, Task

Proceeding, Achievement

Company:
Producer of customer specific hydraulic components and systems for mobile and stationary hydraulic/ automotive/ trucks, 1.200emp./200Mio.€/a (2008)

Responsibility:
Business Unit Manager and member of the executive board (assigned responsibility for sales, R&D, calculation and logistics) 700emp./125Mio.€/a

Initial Position:
Transformation from a component to a system supplier initiated, no presence in the important and growing Asian region.

Task:
Drive international expansion, realise market entry in Asia.

Proceeding:
Analysis of the Asian market focusing India and China, thereby evaluation of the revenue potential, competitive situation, market entry barriers, and customer structures for different product groups and market segments. 

Gaining of personal impressions, information and feedback through several trips into both regions and visits at potential customers, partners and competitors as well as associations - in China supported by a free lancer. 

Comparison and assessment of different options for the market entry, like an own subsidiary with sales only initially and later with production too, joint ventures/ cooperations or company acquisition. Risk assessment concerning culture, language competence, labour law, qualification of local staff and local technology level.

Including of a specialised consulting firm to identify takeover or joint venture options in China, subsequently multiple visits at several targets, negotiation of MoUs, execution of due diligence and structuring of purchase resp. joint venture contracts. 

Negotiation of different joint venture options in India. Finalisation of a joint venture at favorable conditions with an Indian partner (well known as current supplier, not a competitor) for the market segment trucks after positive negotiations and samplings with several potential key accounts.

Achievement:
Development of the Indian market through acquisition of 15Mio.€/a planned volume in the truck segment for the new vehicle generation and parallel set-up of a joint venture with a new production plant forming the basis for further expansion also into other market segments.

Prevention of a too risky and overhasty market entry in China through a finally too less suitable joint venture or takeover.
Recommendation to realise the market entry initially with an own manageable sales and project entity is started.