Wilo SE, headquartered in Dortmund, Germany, was a leading supplier of pumps and pump systems for the building services, water management and industrial sectors, which was doing business in more than 50countries. Based on current global developments in politics, economy, and society, Oliver Hermes, President and CEO of Wilo Group, saw a de-coupling of three tectonic plates centered in China, USA, and Western Europe. At the Wilo management conference in September 2020 Hermes informed stakeholders about the decision to establish a 2nd headquarters in Beijing within the next few months, and possibly to open a 3rdheadquarters in the following year in the USA. He stated: "With the opening of a 2nd headquarters I want to set a sign. Wilo has to keep up with current global developments - whether we like them or not. A stronger regionalization of Wilo is necessary to continue our global success." The case text introduces the key measures to establish the 2nd headquarters in China.
The case study shows the development of Chinese technology company ZPMC, which entered the container crane market in 1992 and, in the space of 15 years, achieved a global market share of over 70 percent. The case gives particular insights into the strategic decisions that led to ZPMC's competitors being pushed aside in a market previously dominated by Western providers. It also clearly illustrates the risks and limitations facing companies that are strongly focused on growth.
The case is set in November 2007. Matthias Rebellius, head of the business unit Fire Safety and Security Products, has to make a decision about the China strategy for the fire systems unit. Siemens has a very strong position globally in fire systems. Especially in developed markets, in the so-called M1 segments, Siemens is often number one or two. But worldwide and especially in China, the so-called M2 and M3 markets (Siemens terminology) had strong growth, but Siemens was not very well positioned in these segments of the market. The case begins with a short introduction outlining the situation. It then gives a detailed background on Siemens, especially the operating division Building Technologies (BT), and within BT the business unit Fire Safety & Security Products (FS). The case illustrates that the BT division was mainly active in mature, developed markets with slow growth rates. At the same time, there was an aggressive goal of achieving annual growth rates of more than five percent with an EBIT margin of 7 to 10%.
Voith Paper, one of the two big international suppliers of premium, technically complex machines for paper production, has to improve its profitability. This also affects Mr. Kohl, senior sales executive of the product division with the highest turnover. He, however, does not want to save the additional millions through cost or personnel reduction. Instead, he plans to sell the consulting services of his sales engineers and thus meet the financial target.