Saurer: the China Challenge
SAURER: THE CHINA CHALLENGE (A)
The text talks about the enterprise Saurer, its history and strategy to face to the challenge of Asians competitors and at same time take advantage of the opportunities in that market.
In December 2003, the management team of Saurer Twisting Systems was having difficulties with the choice of the functioning of their business. It appears a really strong competitor: Asia (specially China) who starts to hoard a big part of the market. There's a recession in the market and Volkmann (one of the brands of Saurer) realized that the sales of machines for making staple yarn for apparel are declining. Volkmann achieve to take the market segment of European and Japaneses competitors but now China competitors (specially Rifa who is the major competitor) have invested in research and development upgrading their process and lowering their costs.
So now, Saurer has to face a big challenge: to produce a machine with a lower cost and good quality targeted at Asians consumers. This machine would have a lower margin in comparison with the others and for its lower costs could replace the existing high end machines. The management team would have to take some really hard decisions about: positioning, pricing, naming the product and sales strategy. And there's still the question about how the Chinese competitors would react with the launch of the new product
Saurer was founded in 1853 by Franz Saurer, at the beginning it was a small foundry and engineering workshop, 15 years later it begins building embroidery machines and starts diversification with a variety of industries. Saurer acquires some enterprises like: Hamel, Volkmann, Allma, Schlafhorst, Melco and Zinser. Most of the acquisitions were in textile machinery and based in Germany. With the acquisition of Barmag and Neumag in 1999, Saurer leads the production of machines for producing and finishing chemical fibers.
The enterprise creates Saurer Textile Solutions (STS),
The text talks about the enterprise Saurer, its history and strategy to face to the challenge of Asians competitors and at same time take advantage of the opportunities in that market.
In December 2003, the management team of Saurer Twisting Systems was having difficulties with the choice of the functioning of their business. It appears a really strong competitor: Asia (specially China) who starts to hoard a big part of the market. There's a recession in the market and Volkmann (one of the brands of Saurer) realized that the sales of machines for making staple yarn for apparel are declining. Volkmann achieve to take the market segment of European and Japaneses competitors but now China competitors (specially Rifa who is the major competitor) have invested in research and development upgrading their process and lowering their costs.
So now, Saurer has to face a big challenge: to produce a machine with a lower cost and good quality targeted at Asians consumers. This machine would have a lower margin in comparison with the others and for its lower costs could replace the existing high end machines. The management team would have to take some really hard decisions about: positioning, pricing, naming the product and sales strategy. And there's still the question about how the Chinese competitors would react with the launch of the new product
Saurer was founded in 1853 by Franz Saurer, at the beginning it was a small foundry and engineering workshop, 15 years later it begins building embroidery machines and starts diversification with a variety of industries. Saurer acquires some enterprises like: Hamel, Volkmann, Allma, Schlafhorst, Melco and Zinser. Most of the acquisitions were in textile machinery and based in Germany. With the acquisition of Barmag and Neumag in 1999, Saurer leads the production of machines for producing and finishing chemical fibers.
The enterprise creates Saurer Textile Solutions (STS),