The case examines the supply chain, management, and organizational challenges of a large European industrial companies competing in a mature industry with a strong price pressure. Founded in the 1930s in South Jutland, Denmark, Danfoss produces first automatic valves for refrigeration systems. The company has since grown into a large industry group. Until the mid-1990s, was very Danfoss European focus, gives the majority of its sales and production. This changed, however, with … Read more »

The case examines the supply chain, management, and organizational challenges of a large European industrial companies competing in a mature industry with a strong price pressure. Founded in the 1930s in South Jutland, Denmark, Danfoss produces first automatic valves for refrigeration systems. The company has since grown into a large industry group. Until the mid-1990s, was very Danfoss European focus, gives the majority of its sales and production. However, this changed with the arrival of the founder’s son, Jorgen Mads Clausen, the new CEO of the company. He initiated a process to change the company into a global player in all key business areas. After this process of internationalization, the company has a number of challenges. There were three main issues that top management was concerned: namely Danfoss processing network, and its continued global growth, and its very engineering-based culture. The first issue came from the fact that Danfoss had followed a strategy of a product, a work. This meant that all his plants were set up to focus on the manufacture of a product. This was a situation with a lot of very specialized product lines and created very few similarities between them. On the other side of the internationalization strategy had so far successfully managed for Danfoss in both Eastern Europe and China. In the United States, but the company was still struggling despite high investments in its production capacity in Mexico. In China, the company had experienced success and wanted to secure the long-term growth in the market. The third point was the technology-based culture of the company, among other things, in the fact that previously developed products Danfoss was manifested at the expense of consumer demand and preferences.
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from
Torben Pedersen,
Jacob Pyndt
Source: Ivey Publishing
19 pages.
Release date: 25 May 2011. Prod #: W11283-PDF-ENG
Danfoss – Global Manufacturing Footprint HBR case solution