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ABB: Strategic Rise, Decline and Renewal (1988 - 2008)
Transcript of ABB: Strategic Rise, Decline and Renewal (1988 - 2008)
ABB: Asea Brown Boveri
Merger of Asea AB (Sweden) and BBC Brown Boveri (Switzerland)
Factors leading to the merger
After WW2, economy expansion led to rise in the demand;
On mid-1970, increase in the price of oil led to lower demand;
Development within Europe offered solutions, such as:
-Lowering and elimination of internal tariff barriers;
-Giving companies the opportunity to bid on electricity across borders to create greater geographic freedom;
-The effect of the GATT rounds in lowering global tariffs also offered opportunities in North America.
Openness, trust and respect
1. The development of a group-wide umbrella culture;
2. The development of core technologies and core competencies;
3. The development and use of multinational teams;
4. Application to the development of effective global managers;
5. Building a multi-domestic or federal organisation along a global-local continuum;
6. The development of effective communication, understanding and patience;
7. The development of customer focus programme.
Have flexibility to respond quickly to changing market conditions
Each company took 50% holding
1. Reorganize into three geographic regions, Europe, Americas and Asia
2. Regional heads into the EMC
3. Segments were brought back to 4 segments.
1. Change to a knowledge based organization
2. 6 business segments
3. Problems in Financial Services and Quality control in Power generation
1. Major restructuring
2. New acquisitions and issues relating to reducing costs
3. Reparing the balance sheet
1. Increase competitiveness of ABB’s core strengths
2. Reduce overhead costs
3. Streamline operations
1. Improving Operational Excellence and margins via Organic growth
2. Conclusion of problems with asbestos litigation
3. Final touches to ABB’s disposal program
1. Accelerated growth in Asian markets
2. Growth through Bolt-on acquisitions and Organic growth
ABB over time
Umbrella culture with a focus on communication and technology;
Technology leader in its field;
Have a customer oriented culture;
Organizational structure has changed throughout the years;
ABB began to be more focused on the reconstruction and improvements on the financial sector of the company;