ABB and Caterpillar case submission PDF

Preview

Summary

Download ABB and Caterpillar case submission PDF

Description

Managing Business Markets Case Assignment ABB and Caterpillar (A) Key Account Management

Submitted By Rakesh Mukundan Perinchery EPGP-11-093

Q1. Why was Caterpillar planning to discontinue relationship with ABB?  

  





ABB Turbo System was one of the 3 main turbocharger suppliers to Caterpillar’s plant in Kiel, Germany. Caterpillar’s managers acknowledged the fact that ABB was a very technically sound company, had very good products and that ABB business units possessed extensive knowledge of the products features and utilities. However, Caterpillar was unhappy with the way ABB dealt with the Caterpillar account and interfered in their operational activities. The Caterpillar managers felt that ABB was being too dominant in terms of delivery and pricing of their products. The Business Units in charge of the ABB Turbo systems operated in silos without involving the group key account managers and were unrelenting regarding the product delivery and pricing experience. They were oblivious to the fact that any negative events in the turbo systems unit could have a cascading impact on the rest of the products ABB provided to Caterpillar. This is evident from the Turbo Systems management team writing a mail to Dan Ahern to stop interfering in their specific workings and processes. Caterpillar’s managers were hence of the opinion that they should reduce reliance on Turbo Systems for their turbochargers and look for other alternatives in the market.

Q2. What changes are required in both procurement and selling to rebuild the ABBCAT relationship? 







 

Presently, the procurement and selling teams in ABB are working independently without consulting or informing each other on the decisions being made regarding the Caterpillar account. The ABB Business units must collaborate with their Group Key Account Management team to resolve the Caterpillar delivery, pricing issue and prevent other ABB product businesses from facing any future backlash from Caterpillar management. While Dan Ahern has reiterated that he will not get involved in the working groups that work out the specific details such as pricing, delivery, he must be mandatorily be involved with the entire Caterpillar process The ABB Turbo Systems BU must look to understand the varied needs of Caterpillar prior to superimposing their delivery features and pricing options. A collaborative relationship will benefit both ABB and Caterpillar. The ABB Group Key Account Management team should be notified and be agreeable about any communication from the Turbo Systems BU to Caterpillar The ABB Business Units should understand the ABB organisational structure and realize the value proposition that the Group Key Account Management team is bringing to improve the Caterpillar account relationship....