Market Entry Strategies Case Study

Will China emerge as the second home for Danfoss?

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Abstract:

Danfoss Inc. was one of the largest industrial components manufacturing companies in Denmark. It engaged in manufacturing of refrigeration controls, motion controls, compressors, thermostats for household appliances. It had manufacturing facilities in four continents, branches and distributors in more than 100 countries and employed 17,000 employees across the world and reached global sales figures of 2.2 billion Euros in 2004.

After attaining the market leadership in Denmark, Danfoss ventured into Chinese market in 1995 and by 2005 it invested around $100 million. Initially Danfoss catered to high and medium end segments in China. Gradually Danfoss identified the immense opportunity available in the lower end segments and in 2006 decided to employ local engineers and engage in production of customised products for the lower end segment customers.

Pedagogical Objectives:

• To study the entry strategies undertaken by Danfoss in China
• To discuss the challenges ahead of Danfoss in its strategy to tap low-end segments
• To discuss the growth strategies followed by Danfoss in China
• To analyse the future prospects of Danfoss in China.

Keywords : Danfoss; Industrial components; Market expansion; international venture; Refrigeration industry; Motion Controls; Wuqing; Jorgen Clausen; Market Entry Strategies Case Study; Low end products; cultural integration; customisation of technology

Contents : 
Early history of Danfoss
Late History
Journey towards globalization
China – The dream destination
Affirming its position