Presentation on ABB_PBS Joint Venture

8/4/2019 Presentation on ABB_PBS Joint Venture

1/13

Technological Environment[ABB-PBS Joint Venture Operations]


2/13

What is Technological Environment ?

External factors in technology that impact business operations.

That part of the firm's external environment in which changes in

technology affect the firm's marketing effort

Consists of those factors related to knowledge applied and material

and machines used in the production of goods.


3/13

Features of Technology

Its change and then more change, forces change on people whether they areprepared for it or not

Its effects are widespread, reaching far beyond the immediate point oftechnological impact.

Technology is self reinforcing, Technology feeds on itself. Technology makes more

technology possible

Technology is complete set of knowledge, ideas and methods


4/13

Impact of Technology

Impact on Society

Impact on Economy

Impact on Firm

Technology has its impact through various dimensions;

High expectations of consumers

System Complexity

Social Change

Increase in Productivity

Increased Budget on research & development

Jobs become intellectual

Product Differentiation

Change in Organisation Structure

Risk Factor

Resistance to change

E-Commerce

Telecommunication

New Markets


5/13

Modes of Technology Acquisition

Internal Acquisition

External Acquisition

Licensing.

Purchasing

Joint Venture

Acquisition of technology of rich firm

Combined source


6/13

Benefits of Joint Venture

Provide the opportunity to obtain new capacity and proficiency.

Makes new geographical markets accessible to the company.

Because of its short life span, do not represent a long term commitment.

Offer a creative way to exit from non-core businesses


7/13

Case Study: ABB-PBS Joint venture in operations

ABB-PBS Joint Venture started operations in April 15,1993

ABB had a 67% stake and PBS had a 33% stake.

Started external service business in1995 which did not meet

expectations.

Business of joint venture in its first two years was good in mostaspects

2.3% increase in return of assets and 4.5% on sales. Also showed 12%

increase in exports

Dominated the boiler business in 1995 with 70% market share.


8/13

Case Study: ABB-PBS Joint venture in operations

Market Share was hit due to change in environmental laws.

With Joint efforts of the concern the restructuring took place in plant

logistics , information systems and other physical capital improvements.

Resulted in 50% increase in labor productivity.

The technology leadership was not realized because due to the lack of

corporate intent and loss of efficient staff.

Major achievement of the concern was development of new steam

turbine line . This technology transfer helped in establishing the

benchmark for other ABB companies on variables like

productivity, inventory and receivables


9/13


10/13

Case Analysis

The joint venture met the needs of both the partners in:

Labor Productivity.

Profitability due to return on sales & assets

Exports

Development of new engine

The joint venture failed in:

Technology Leadership

External Service and Revenue Performance.


11/13

The company failed in achieving technological leadership

Due to lack of Corporate intent

Due to lack of talent management

inefficient human resource management

Flourishing of domestic business

Lessons drawn from this incident

Presence of corporate intent and exceeding in it.

Case Analysis

Company should focus on knowledge management and talent retention

management.

Company should be ready to adapt to the technological change.


12/13


13/13

Presentation on ABB_PBS Joint Venture

Documents