Dürr AG: From Premium to Mid-Market in China
(10 pages of text)
In the autumn of 2013, the president and chief executive officer of Schenck Shanghai Machinery Corp. Ltd., a subsidiary of the Dürr Group situated in Shanghai, China, was reviewing his business operations. The Dürr Group was a multinational machine tool manufacturer based in Germany. In emerging economies, the mid-market had become the battleground between foreign and local firms. Traditionally, foreign investors earned healthy margins in the premium segment, but many realized that they were missing out on fast-growing market segments and were facing potential threats from local competitors who were moving up-market. To remain competitive and to ensure future growth and profitability, while not compromising the brand's reputation, the Chinese subsidiary had to ensure continued support from headquarters in Germany.
The case has been designed for use in strategic management, business in emerging economies and international business courses. Its objectives are to:
- Assess the opportunities and risks associated with an entry into the mid-market in an emerging economy.
- Assess the competitive dynamics in business to business markets in China and identify key success factors.
- Assess the potential tensions between headquarters and subsidiaries in multinational enterprises and suggest how a subsidiary can best manage such tensions.
- Design strategy and action plans.
China, Large, 2013
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