Zwick Electrical: Developing A Global Logistics Strategy case solution by Zwick Electrical: Developing A Global Logistics Strategy@MarketerRj

Presented by:

Nitin Kumar Shukla 2013180

Prakhar Swami 2013204

Rajat Garg 2013226

Rohit Jain 2013242

Sidhartha Dipankar 2013281

Umang Warudkar 2013309

Erika Elisabeth 2013344

Zwick Electrical:Developing A Global Logistics Strategy

Presented to:

Prof. Arijit Mitra

Zwick Electrical: The journey so far……

1952 yearZEI began operations produced

electric motors and parts

1968 yearPurchased ELTP and retained

distribution center and engineering department

1984 yearNew plant and distribution

center in Greenville

1960 yearZEI added production facilities

in Cincinnati, Ohio, and Louisville, Kentucky.

1970 yearCincinnati and Chattanooga

plants were expanded

1990 yearRenovate Shreveport and

close Cleveland, Louisville

199019841970196819601952

Problems

Overseas Venture Management

Go Global

Yes

How?

How much?

No

Alternatives

Q1. At what stage of global operations are ZEI, ABB and Siemens?

ABB

Level: Internal operation

Merger of Asea AB and BBC Brown Boveri

4 Business Segment in 3 region

Subdivided into BAs

Abacus(ABB’s MIS)

3 managerial levelBA manager

Country manager

Company manager

Siemens

Level: Denationalised

Presence in Europe, America, Asia

Corporate structure is divided into 3 primary divisionsGroups

Regional units

Corporate division and centralised services

Zwick

Level: Arm’s length

5 production plant

2 distribution center

OVM acts as a representative for ZEI in Europe.

Q2. Beyond a simple sales perspective, why might ZEI want to consider greater international activity?

Risk“Do not put all your eggs in one

basket”

Brand recognition Cross-pollinationGlobal + Local

Prestige CP

Risk

Q3. From a ZEI perspective, what advantage and disadvantage do ABB and Siemens offer?

Long term survival

Advanced R&D

Use of well developed

marketing and distribution

Autonomy

Downsizing

Employer employee loyalty

+

+

-

+

-

+

Q4. Alliances with ABB and Siemens are only one alternative contained in the consultants’ report. What may be the other alternatives?

Establish Alliances with Firms other than ABB or Siemens

Make Acquisition of its own . It might help achieve these primary objectives

Maintenance of zwick’s Market Access in regional Trading Blocks

Increased international sales as a percentage of total sales.

Complementary products from overseas suppliers

Look to new products and emerging markets

Address the changing economic-political environment in north America (NAFTA)

Q5. What course of action do you think ZEI should pursue?Why?

1) Increase The Product Line

a) They can come in agreement with overseas suppliers for complimentary Products.

b) Invest in R&D of complimentary and current products by benchmark Practices

2) Choose an alternate option for OVM

-Look for more efficient and profitable distributor across various markets.

3) Can go in merger with ABB

4) Look for growth potential markets in which govt. regulations are

friendly.

Why ABB?

Why ABB?

More Focused in Power Sectors

1300 Subsidiaries and 5000+ Profit Centers

Highly Integrated Information System.

Worldwide Presence-Europe,Asia America,Australia, Newzealand

Has its own Financial services

Good Distribution Network

Many Subsidiaries engaged in R&D

Why Not Siemens?

Not Much Focused in Power Sector.

Denationalized Operation

75 percent presence in Europe only

Our take on the case

• Go with option no.2 and try to make use of option 1 as a backup plan.

ABB