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L/O/G/O ABB RISE DECLINE RENEWAL Strategic
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L/O/G/O
ABB
RISE
DECLINE
RENEWAL
Strategic
Introduction Asea Brown Boveri
Swedish-Swiss MNC, headquartered in Zurich, Switzerland
Founded in 1988 through merger of AESA
Automation and Power Technology company
Has operation in 100 countries and ranked 143rd Forbes Ranking
Vast Product areas from High to Low Voltage products, Industries, Utilities to Power Electronics, Measurement to Robotics system and Transformers to Generators system.
CEO Percy Barnevik’s Ideals
Group-Wide Umbrella Culture
Core Technology and Competencies
Develop World Wide Teams
Effective Global Managers
CEO Percy Barnevik’s ideals in building ABB into a global Corporate Presence were well founded.
Effective Communication, Patience
Multi/ Domestic Federal Organization
Customer Focus Program
During his reign as CEO, Barnevik’s expansion strategies was to move away from being dependent on Western Europe and move toward a stronger presence in North America and expand into Eastern Europe and Asia.He adopted a matrix structure. But this had caused some problems between executives. This led to communication speeds being damaged and Barnevik’s ideal of developing effective communication not being reached. Because of the conflicts between management he would spend a lot of time intervening and interacting with the managers to solve conflicts. To solve the problem, he introduced more management.
Factors that caused used key areas to go awry and affect the performance of the business.
1988 to1998
He began major restructuring in the company to change it to a more “knowledge-based” company. This involved moving manufacturing jobs from the USA and Europe to Asia to limit costs. He continued with moving jobs and ten thousand jobs would be cut over eighteen months. Geographical regional reporting structure was also restructured and reduced so that business activities were realigned on global lines. When he first came to power, business segments were more general, and began to make them smaller so that they were more focused. These were changed to automation, products/contracting, and oil/gas/petrochemical segments.
Factors that caused used key areas to go awry and affect the performance of the business.
1997 to 2000
Key areas
Financial Services Problems
Power Generation Quality Control
Unrelated Diversification
Combustion Engineering Problems in the USA
Major restructuring,
New acquisition
Cost cutting
Strong market position
Diversified portfolios
Key strategic initiatives implemented by the various CEOs appointed and take the company out of the “crumbling mess” . Which CEO performed better and why?
2001 to 2002
His leadership caused a severe loss in investor confidence in the company due to its over-diversified portfolios, acute financial strain, and adverse interest rate movements.
Increased CompetitivenessReduce overhead costs
Key strategic initiatives implemented by the various CEOs appointed and take the company out of the “crumbling mess” . Which CEO performed better and why?
2001 to 2007
Dormann's leadership skills helped ABB turn in stronger than forecast returns and as a result, helped increase the share prices. Not only that, after ABB experienced three years of losses, ABB saw a profit.
Increased CompetitivenessReduce overhead costs
Key strategic initiatives implemented by the various CEOs appointed and take the company out of the “crumbling mess” . Which CEO performed better and why?
2004 to 2008
His initiatives resulted in double figure EBIT (Earnings before income tax) and Sales Margin, which was never achieved in the past. Kindle was not focused on pushing growth in Asian markets however, Kindle favoured small acquisitions of around $2billion too.
Strategic leadership style
Cost and scarcity of project funding
Demand in ABB’s industrial
Improve efficiency and productivity
Acquisitions (Ber Mae Electrical Instrumentation Ltd.)
Key strategic initiatives implemented by the various CEOs appointed and take the company out of the “crumbling mess” . Which CEO performed better and why?
2008
Hogan helped achieve growth in revenues (20 percent from 2007), EBIT (13 percent growth from 2007), operating cash flow (30 percent), orders logged (11 percent).
ABB's performance in Q1-2011 and the outlook!
Answer 3
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L/O/G/O
Submitted by Group No. 5Harshal Buranpuri
Jeet Shaha
Rashid Khan
Ishdeep Shinh
Gurtej Dhillon
Thank You!
