B2B Marketing Management

Term Paper

On

Study of Business and Marketing strategies of Emerson

A report submitted to

Prof. DVR Sheshadri

On

August 14, 2015

By

Shivanand Pawar (144070)

Rahul Pateliya (144069)

Section B

Group No B20

PGP 2

Executive Summary

Emerson Electric Company is US based multinational organization which manufactures

engineering products and offers wide range of services to industrial, commercial and consumer

market. It has 115,000 employees and 220 manufacturing units spread across the globe. The

company registered US $ 24.5 billion for fiscal 2014. Emerson initiated its operations in India in

1980s through a major joint venture with Fisher-Rosemount India to offer process automation

products and services. Since then it has done number of important acquisitions to expand

business in India. Recently they acquired Virgo Valves which is a leading manufacturer of ball

valves and automation systems.

Business in India brings strategic importance in Emerson’s offering to its customers across

globe. As a result Emerson widely expanded their operation in India and developed five

engineering research and development center. For fiscal 2014 they achieved US $ 700 million

revenue in India. Emerson works across five verticals namely Process Management, Industrial

Automation, Network Power, Climate Technology and Commercial and Residential Solutions in

India. They face competition from global players like GE, ABB, Honeywell India, Siemens etc.

also local player like Forbes Marshall, Rotech, and Crompton Greaves etc.

We studied Emerson’s innovative business model which gives them edge in highly competitive

environment. Company’s most businesses are customer driven which strives to offer standard

products as well as tailor’s customer demands effectively. Technology expertise and market

leading innovation brings core competencies to their business and hence offers the best

engineering solutions and products to the customers.

Value based business strategy outlined for the company focuses on producing best quality

products through continuous innovation. Emerson India also defines target segments that it

focuses on for optimum reach and to better serve its customers. Better quality solutions offered

at comparable prices has been the hallmark of Emerson’s business. Emerson India’s strategy to

be a force in the international market can be attributed to increased footprint established

majorly through acquisitions and product innovation.

Introduction

Emerson Electric Company is US based multinational organization which manufactures

engineering products and offers wide range of services to industrial, commercial and consumer

market. Emerson is one of the giants in this segment which employees more than 115,000

employees and has 220 manufacturing units spread across the globe. Emerson was established

in 1890 as the electric manufacturing company, they were the first to sell electric fans in US.

Soon they expanded their offerings to several other machines such as sewing machine, electric

dental drill, power tools etc. Emerson has headquartered in Ferguson, Missouri, US under the

leadership of Mr. David N. Farr who is the Chairman and the Chief Executive of the company.

Over the 125 years journey Emerson emerged as a powerhouse in technology and engineering

industry which provides highly innovative and technologically advanced solutions to its

customers. Emerson offers its services and products majorly in Process Management, Industrial

Automation, Network Power, Climate Technologies and commercial and Residential solutions.

Emerson is offering is expertise in these five verticals across 150 countries in the world. In 2014,

they achieved $ 24.5 billion mark in international destination sales including US exports.

Emerson started its business in India in 1950s with the offerings of motors, drives and fans, to

become a part of India’s first step towards industrialization and economic growth after

independence. Emerson initiated its operations in India in 1980s through a major joint venture

with Fisher-Rosemount India to offer process automation products and services. After that by

1990s they spread across wide range of business solutions and products, mostly joint ventures

with respected business in India. In the recent years, to improve the efficiency and to integrate

jointly ventured companies into their business specific platform, Emerson has acquired those

joint ventures 100%.

As of 2014, Emerson has very strong foot hold in India. India adds lot of strategic importance to

their portfolio such as in India they got access to large pool of engineering skilled human

resource which enabled them to produce products better and faster which is giving them

competitive advantage. Emerson’s income statement aptly shows why India is a key location for

them for fiscal 2014 they posted around US $ 700 million in India. Emerson has 17

manufacturing units and more than 100 offices across in India having more than 10,000

employees working for them. They have established five global engineering and development

centers in Chennai, Mohali, Noida and Pune. Hence India has become an important hub of

global engineering and development initiative for Emerson. Emerson has many well-known

multinational competitors such as General Electric, Siemens, Honeywell India, 3M, B&R etc.

across different verticals. Also, they face lot of local competitors Crompton greaves, Rotech,

Voltage, Forbes Marshall.

Positioning in Business Market

Emerson India position themselves as a highly technologically driven and research oriented with

domain expertise in offering engineering solutions and products to their customers across five

verticals which are mainly Process Management, Industrial Automation, Network Power,

Climate Technology and Commercial and Residential Solutions.

In Emerson Process Management, the company promises to manage process operations under

constant pressure to increase output, reduce energy consumption and reduce cost, improve

safety and reduce emission all this while performing complex operations.

In Industrial Automation, Emerson is known for offering business specific specialized expertise

and solutions to every facet of the customer firm’s business operations. In this vertical Emerson

mostly works with electrical companies that produce power and mechanical companies that

deliver high quality finished products. They promises to deliver higher quality, greater energy

efficiency and lower design cost at any location in the world.

Network Power vertical ensures implement highly efficient network infrastructure which plays

an important role in IT industry, communication networks and healthcare and industrial

facilities. With the help of industry expertise and cutting edge technology Emerson can offer to

protect and optimize network infrastructure to store and secure customer firms’ important

applications, data, multimedia files etc.

Emerson’s climate technology have proven products and industry leading innovations which

delivers effective temperature control with high reliability, minimum energy consumption and

quieter operations without harming environment. Emerson promises to offer reliable and

energy efficient technology to costumer firm who are looking for refrigeration, heating and air

conditioning.

Emersion commercial and residential solutions offers, highly innovative and user friendly

appliances, tools and storage products. These products are intelligently design to consume

minimum space in residential and commercial settings. Emerson makes world’s best food

wastage disposer and complete line up of wet and dry vacuums.

Business Strategy – The Vision

Emerson has clearly outlined mission statement. It also has well laid out values that it adheres

to all times, which also reflect their deeply ingrained character. The company’s promise to

shareholders, customers, and employees alike is expressed through its mission and values. This

promise is, “Emerson is where technology and engineering come together to create solutions

for the benefit of our customers, driven without compromise for a world in action.”

Core Ideology

Core Values

Emerson is “committed to being a well-managed, results-oriented, engineering-driven

organization”

It wants to “build an organization with people who have a passion for progress and a

commitment to excellence”

More connected, forward-looking, and more focused to its customers

Everything that is accomplished rests on integrity, dedication, commitment, and skills of

the employees

Commitment to the highest standards of personal and corporate ethics

Purpose

“To create long-term value for our shareholders, customers, and employees through a

passionate commitment to excellence and a disciplined management process, which together

drive sustained competitive advantage in a dynamic global market. We achieve success by

developing industry-leading technology, investing globally, and delivering results for

customers”

Envisioned Future

BHAG (Big, Hairy, Audacious Goals)

To be the engineering and technology partner of choice and help their customers improve their

business.

Vivid Description

“Make strategic investments in innovation of the company’s core businesses and create

solutions for the benefit of our customers, driven without compromise for a world in action...

Increase exports to parts of Asia and Europe”

Business Model

                                  

Customer Value Proposition

Emerson have clearly identified target market segments such as gas and oil, energy and power,

healthcare etc. and they cater to these segments across five verticals. They are highly focused

towards delivering customer tailored solutions and products which help to gain the dependency

of the customer firm and hence retain customer for long term. Emerson offers market-leading

innovative solutions like process management to reduce cost and time in operation which gives

customer firm competitive advantage in price and time to market. Their key to success and high

revenue is high involvement with customer firms and solving their problems intensively by being

disciplined and persistent in their offerings. Once they understand customer requirements and

know competitors offerings to the same customer, Emerson strives to develop much focused

manufacturing strategy to produce competitive solution and provide much better services. Also,

they plan strategically to stay close to customer firm to achieve their goals and hence their own.

To offer the best in class solutions to customer firms Emerson have been consistently partnering

with technology leaders and distribution channel partner that helps them to produce products and

services which can be consistent in business critical and high pressure situations. Highly

proficient partners help Emerson to give innovative solutions to their customer and thereby to

increase their own profits.

Key Resources

From the time when Emerson entered into India it has been continuously acquiring and merging

with local player to leverage upon the advantage of being local. These acquisitions have helped

Emerson to expand its reach and target many customers which were not falling in their range

earlier. It also eventually helped them to achieve long term growth strategy. As a result of this

Emerson could establish more than 100 brands in India which is catering to various segments

and regions. Emerson’s success lies in effectively integrating those acquired firm into its

business specific platforms.

Key Processes

Emerson effectively manages key process such as portfolio management wherein they cater to

high net worth customers’ need and demands as and when needed. It also has integration process

which automates technology and services to their full product line.

Profit Formula

Emerson strives to offer the best price and highest value to their customer. We came to know that

from our secondary survey sometimes they tend to compromise upon price just to acquire the

customer and beat the competition. Operation in India adds strategic importance such as skilled

labors, low cost infrastructure and prolific engineering and development center hence Emerson is

continuously investigating investment opportunities in India.

Fundamental Value-Based Strategies

Product Leadership

Emerson India offers its clients leading-edge products. The company’s focus lies on producing

best-in-class engineering products. Emerson has also built major engineering capabilities of

global quality in India. It also constantly strives to improve customers’ use of the product. The

company has started manufacturing large process and industrial valves for use in major oil

industries in the middle-east, where quality is of prime importance.

Customer Intimacy

The company has well defined target segments and it provides offerings tailored to the

demands of its clients. Its businesses are divided across five major verticals which also form the

base of the broad category of target customers that Emerson caters to. It has segments defined

based on progressive bases including application and customer capability. Some of these

include clients requiring network power and power systems, intelligent control systems, etc.

Notable industries that Emerson has established itself in are oil and gas, power and energy,

healthcare among others.

With India in the process of an infrastructure boom and better economic growth, the company

recognizes its potential targets for its future strategy and is working in that regard.

Operational Excellence

Emerson India is a market leader in providing technology and engineering solutions to its

clients. Although priced at a premium over its local competitors, Emerson provides products

and services priced at par with its international competitors like GE, Honeywell, Siemens, etc.

However, the company has earned a reputation for higher quality and value delivered as

compared to these competitors. They constantly innovate and strive for reliable products to

customers at competitive prices. The company is focused on developing solutions that address

their Indian customers’ needs. This also explains why over 4,000 employees in Emerson India

are working towards innovating and engineering solutions.

Globalization Strategy – The AAA Triangle

Increase economies of scale and scope – by increasing geographic footprint

Focus on research and innovation

Absolute economies of scale – through number of smaller companies acquired

View India as best-cost market

Local relevance through national focus Decentralization for better management Focus on increasing global capabilities in

India