Strategy: focusing on long-term success factors

  • Using synergies, tapping the full market potential
  • Taking advantage of a range of opportunities through a global approach
  • Project organisation for strategy implementation

Which needs and preferences will govern the purchasing decisions of our customers in the future? Answering this question was essential for the development of our current Group strategy, which will continue to be in focus in the coming years as well. We will continuously analyse the market, survey our customers and identify relevant technical trends. Our intention is to find and implement the best solutions for future customer problems early on. By doing so, we open up new sales opportunities and secure our long-term market position.

This solution-oriented approach, coupled with our expertise in technology and the pursuit of long-term success, is the driving force behind our work. We use the distinctive strengths of our corporate culture, and simultaneously align our organisation with our strategic goals.

Our primary goals include:

  • Taking a leading position in attractive markets
  • Being better than our competitors in the eyes
    of our customers
  • Ensuring sustainable, profitable growth to secure the future of KSB in the long term

To achieve these goals, we have created a “triad” made up of strategy, organisation and corporate culture. We are continuously developing our three-point management system and adapting it to needs arising from changes in external and internal conditions. The focus is on achieving flexibility.

Using regional skills globally

Our Group strategy calls for the further globalisation of our activities. We are ideally positioned for this. For more than 50 years KSB has been active in countries such as Argentina, Brazil, India, Mexico, Pakistan and South Africa with its own manufacturing plants and sales centres. In response to the specific customer requirements in these and other markets, our local companies have developed special technical skills. When developing our corporate strategy, we examined the extent to which these skills are also relevant in a global context. We will now extend the use of relevant expertise to provide even better service to customers in other markets too.

New organisation creates synergies

For this we needed to reorganise processes and structures within the Group. At the start of the reporting year, we decoupled production and sales responsibility and introduced a global product management system. At the same time we established a network of regional expert teams for project handling. We coordinate these teams on a cross-regional basis in order to be able to quickly serve our customers who operate internationally with the professionalism they have come to expect from us.

By interacting globally, the new organisation aims to exploit synergies and improve the profitability of KSB through economies of scale. Moreover, by making our solutions expertise available to an even larger extent, we can strengthen our quality position in many individual markets, helping to secure our corporate future.

In addition to developing new solutions, part of our strategy is to systematically exploit market potential with existing products and services. For this we draw on our long-standing, good relations with many companies. At the same time, we are striving to make our technologically advanced products and proven solutions available to even more customers.

We can build on our ability to produce a wide range of products and variants efficiently. This ability enables us to implement many individual user requests as part of standardised and partially standardised solutions. As a result we are, for example, able to offer our customers in highly developed industrial countries particularly energy-efficient and durable products that incorporate advanced drive technologies and proprietary materials. However, we can equally provide technical alternatives for less demanding applications.

By making use of the versatility of our existing product range worldwide, we generate the funds necessary to develop new business lines. Here we focus on those we consider to be the most promising for the future.

Minimising risks, expanding opportunities

We want our global business to be as focused as possible and as diverse as necessary. This applies to the activities in our various sales regions as well as to the various areas of application for our products, from building services to power plant processes.

To maintain or achieve the necessary strength in strategic business lines, we need to, on the one hand, temporarily concentrate our resources. On the other hand, because we are maintaining the breadth of our activities, we have a high degree of flexibility – not least to balance out economic fluctuations in individual business lines.

Regionally we wish to reduce our dependency on the European market through above-average growth in other regions in the coming years. This will enable us to benefit more from the dynamism of these markets, which include not only Brazil, Russia, India and China, but also attractive smaller markets that we have known for many years and to which we can supply suitable products and services. Still, we will not be neglecting our domestic market of Europe, but will rather be seeking out and taking advantage of new opportunities here as well.

In terms of content we diversify our risks by being involved in many diverse and complex areas such as energy supply and service. With our products for conventional and nuclear power applications, we support, for example, economies that are just embarking on industrialisation. At the same time, we are helping to reduce CO2 emissions in industrialised countries with our equipment for renewable energy supply systems. In emerging economies, we are also contributing to the establishment of decentralised supply infrastructures.

We have a similar aim when it comes to the deployment of our service expertise in both the industrialised countries – where there are a large number of existing plants – and the emerging markets, where availability, operating reliability and safety, and low life cycle costs are becoming increasingly important. Requirements and market reactions are quite different in both cases.

Project organisation instead of hierarchically managed expertise

At the same time as defining our strategic projects, we adopted a project methodology and organisation that allow us to prepare and implement our numerous individual projects efficiently. We have decentralised the responsibility for these projects and linked them to local resources, thus ensuring that all Group companies are involved in strategic tasks.

Thus, at KSB, many employees contribute to the success of our corporate strategy in national and international teams. Increased project work marks an organisational and cultural change. It leads away from a hierarchy-based structure to a flexible way of working involving temporary, decentralised responsibility.

Most of our strategic projects require more than a year, and consequently were not yet completed at the end of 2010. Such longer-term projects mainly aim at developing new products, accessing new markets and establishing sales channels.

We have implemented a series of short-term measures to reduce costs, globalise materials procurement and expand our service network. Two acquisition projects were successfully concluded in 2010 with the acquisition of a motor manufacturer in northern Italy and of the business operations of a service provider in the southern United States. They represent – along with some of the product launches – important milestones on the road to developing future areas of strategic relevance. We will continue working intensively on this task in 2011 as well. At the same time, we will strengthen our organisation and corporate culture and – where appropriate – improve it even further.