ABB-PBS Joint Venture Case Study

This case study examines the ABB-PBS joint venture, analyzing the company's restructuring efforts following the merger. It explores the challenges encountered in global operations, particularly within the supply chain. The analysis delves into the strengths and weaknesses of different business units, highlighting the impact of environmental concerns on technology development. Ultimately, the case aims to understand how ABB-PBS navigated these complexities and sought to optimize its performance.

Running head: GLOBAL BUSINESS MANAGEMENT i
Global Business Management
Student’s name
Institutional affiliation

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Executive Summary
The ABB began in the nineteenth century and bears an illustrious and long record of
technological and innovative leadership in different industries. In 1987, the Swiss
engineering company merged with the Swedish electrical engineering resulting in the ABB
Limited. With the merger of Brown Boveri and Asea created the largest firm in Europe. It has
over 4500 workers. Although it began in Switzerland, the company has spread its operations
across the world where it has helped in the building, developing, and maintaining the
infrastructure of many countries. Currently, the company has diversified into advanced
technologies, products and alternative energy in automation and power. The paper focuses on
the supply chain analysis based on the primary and support activities of ABB.

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Table of Contents
Executive Summary...................................................................................................................ii
1. Introduction.........................................................................................................................1
2. Value Chain Analysis of ABB PBS....................................................................................2
3. Primary Activities of ABB PBS.........................................................................................2
3.1. Inbound logistics.........................................................................................................2
3.2. Operations....................................................................................................................3
3.3. Outbound logistics.......................................................................................................3
3.4. Marketing & Sales.......................................................................................................3
3.5. Service.........................................................................................................................3
4. Support Activities of ABB PBS.............................................................................................4
4.1 Procurement......................................................................................................................4
4.2 Technology development.................................................................................................4
4.3 Human Resource Management.........................................................................................4
4.4 Firm Infrastructure............................................................................................................5
5. Recommendation....................................................................................................................5
6. Conclusion..............................................................................................................................6
7. References..............................................................................................................................8
Appendix....................................................................................................................................9

Running head: GLOBAL BUSINESS MANAGEMENT 1
Global Business Management
1. Introduction
ABB PBS is a leading engineering company in the modern world. Since its inception,
the company has increased its industrial productivity sustainably. It has also allowed its
clients to use electrical power efficiently thus maximize their performance. The ABB PBS
serves water, gas, and electric utilities. It also serves its customers with commercial and
industrial systems, products, and services for distributing and transmitting power (Cullen &
Parboteeah, 2011). The products offered have enhanced power plant automation. The ABB
PBS is critical to this research because it delivers automation systems that have been used to
control, measure, protect, and optimize plans across industries.
The company is worth study because it focuses on improving operating performance;
productivity and grid reliability thus save energy and reduce environmental impact. The
company has also focused on driving innovation and quality of systems, products, and
services. The company has further responsible actions and attracting talents because of its
global and attractive work environment (Hansen & Mowen, 2009). Given the current debate
on the climate change, ABB has opted to act responsibility thus invest in business ethics and
lower environmental impact. Therefore, the value chain analysis provides the best approach
to determine the role of the company in meeting its mission. This report has selected the ABB
PBS, as it provides the best example of an organization that is managed globally. With its
joint venture operations, it shades light to the challenges and opportunities the current
businesses experience (Cullen & Parboteeah, 2005). Therefore, the report investigates these
challenges and opportunities thus making it possible to understand the situation in the market.

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2. Value Chain Analysis of ABB PBS
The value chain analysis is the process undertaken to evaluate ABB-PBS’s value
chain elements. This process helps the company to identify the strengths and weaknesses of
various elements of the value chain (Cullen & Parboteeah, 2011). However, the value chain
analysis can never be used to determine the threats and external opportunities. The SWOT
analysis is critical in analyzing the situation. It involves the groundwork thus match the
strategy of the organization to internal resources and external market. According to studies,
the value chain analysis focuses on the value chain (Peng, 2009). It disaggregates the views
of ABB-PBS. This systematic approach encompasses various activities of firms to providing
products to the customers. Without a doubt, the value chain consists of support and primary
activities.
3. Primary Activities of ABB PBS
These are activities involve the after-sales services, distribution and marketing, and
physical creations of its products (Cullen & Parboteeah, 2011). The leading primary activities
encompass the marketing and service, outbound logistics, operations/production, and inbound
logistics.
3.1. Inbound logistics
The inbound logistics have also been part of ABB’s strategy to meet the expectations
of clients. Through the inbound logistics, the company has received, stored, and handled
inputs. The inbound logistics focuses on a return to suppliers, material handling, scheduling
of transporting products, and storing products in warehouses (Bamford & West, 2010).
Through the joint venture, the company needed to improve its supply chain system by
improving the flow of products.

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3.2. Operations
The operations of the company have defined its success and performance in the
industry. The operations focus on maintenance, machining, assembly, packaging, testing, and
equipment. Following the company’s move to merge, its operations improved (Cullen &
Parboteeah, 2014). The activities transformed inputs into the company’s outstanding
products. However, the operations were below the expectation because of the joint venture.
The joint venture introduced new perception and operations.
3.3. Outbound logistics
The conversion of inputs into outputs, the processes involved are different. Outbound
logistics have helped ABB to collect, store, and distribute inputs. Conversely, some of its
logistics processes have failed to serve its interests and address the concerns of customers.
3.4. Marketing & Sales
ABB-PBS has relied on its marketing strategies to improve its market opportunities.
Given the fierce competition in the market, ABB-PBS used proper advertising, public
relations, sales promotion, pricing of products, and sales force. Personal selling and selection
of distribution have defined the company’s success (Bensoussan & Fleisher, 2012). The joint
venture created an opportunity for the company to improve the distribution of its boilers.
However, ABB needed IT systems to facilitate the marketing activities. Without relevant
resources like markets, it became difficult for the organization to improve its market position
and improve sales.
3.5. Service
ABB had invested in various services to improve its market position. The most
important services included the supply of parts, installing machinery, repairing machines, and

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training its dealers and suppliers. The organization also took the responsibility of responding
to the customer query promptly. The economic outlook has been bad thus affecting the
outflow of the organization.
4. Support Activities of ABB PBS
4.1 Procurement
The company focuses on acquiring resources and inputs for its operations. Through
proper procurement systems, ABB has managed to support its operations because its
suppliers have distributed the inputs as ordered. However, the organization needed to
consider new systems and infrastructure to improve performance.
4.2 Technology development
ABB focused on improving its operations by investing in physical capital
improvements, information systems, and plant logistics. This involved restructuring the
company including renovating the engineering facilities and transferring technology (Powell,
2010). However, the impact of this technological development will be a costly affair. The
firm will have to increase its budgets to install and use new systems to improve performance.
4.3 Human Resource Management
The company has scored high regarding the HR practices and employee satisfaction
among its enterprises. The company has invested in an inclusive approach to improve the
relations within the workplace (Peng, 2009). It offers workers financial security using its
pension schemes. Importantly, it has opted for share acquisition options thus use internal and
external training mechanisms to develop its human resources (Powell, 2010). Recently, the
organization increased its training budgets instead of cutting the spending. This has justified
the consciousness of the employees as it offers them better tools and benefits for personal

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growth. However, the company has to address the management issues to retrench the
irrelevant workers to avoid wastage.
4.4 Firm Infrastructure
The infrastructure of ABB-PBS has been designed to accommodate its enthralling
operations. The turnkey, for instance, used the delivery system to enhance transporting the
industrial steam. ABB-PBS has designed its steam turbines thus generate boilers and power
thus facilitate the recovery of its power. Harnessing power is the greatest objective of ABB-
PBS because the facility engineers are responsible for managing these systems. By 1995, the
organization established the greatest infrastructure that made it the giant in its business,
boiler. Despite these strengths, the company’s job turnouts emerged as the critical constraints.
This has promoted the emergence of competitors from the domestic market. Similarly, the
European boiler market has declined thus affecting the company’s operations leading to the
retrofitting surge. In 1995, the company witnessed the worst decline in the boilers orders.
5. Recommendation
Based on the value chain analysis of this company, ABB needs to improve the way it
undertakes its business operations. This company has to identify new niches in emerging
markets to serve the international community thus expand the export activities. Following the
fall of the Soviet Union, the sustainability of the economy is no more. Therefore, ABB-PBS
has to seek solace in new niches overseas to substitute for the Soviet Union market. As such,
the company can maintain the firm’s financial strength.
The company should also focus on improving its technology base. Currently, the
organization has limited technology thus making ABB PBS vulnerable to rivals. It is critical
for the company to use new and efficient technologies to improve its earnings (Mayoux,
2005). The use of the technology will see ABB-PBS introduce the just-in-time ordering

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system. This implies that the firm maintains its strong ties with stakeholders including
customers because many customers expect the company to respond to their needs frequently.
The approach will ensure the company reduces unnecessary to lock up and slacks that can
disrupt the value chain.
The company operates different units that must operate in cooperation. The
collaboration among the units will increase their synergy. These units must work together to
better the results and outcomes (Sekhar, 2010 ). This makes the need for connection and
cooperation with various units relevant. Besides, the outsourcing is becoming an important
element that can improve the firm’s performance and value chain. The firm’s in-house
workers have proved problematic because most of them are unproductive. The company
needs to eliminate the costs regarding its value chain operations (Cullen & Parboteeah, 2014).
It is critical to retrench some workers and pay the external entities a smaller percentage to
offer similar services. Finally, the company needs to re-examine the unproductive
businesses and abandon them if necessary (Sekhar, 2010 ). For example, the boiler business
is threatening the company’s economy and productivity. Therefore, re-examining the
businesses will make it possible to determine the most profitable business line thus directs its
investments on these profitable business lines.
6. Conclusion
ABB-PBS entered into a joint venture business after they addressed the contractual
and legal constraints. The merger made it necessary for the company to consider
restructuring. However, the aspects of restricting and governance defined the core operations
of the company. The company experienced challenges in its operations globally. Since ABB
is an international organization, its operations and supply chain becomes important to
analyze. Indeed, the supply chain analysis has helped to identify the strengths and
weaknesses of the company.

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7. References
Bamford, C. E., & West, G. (2010). Strategic Management. Mason, OH: Cengage.
Bensoussan, B. E., & Fleisher, C. S. (2012). Analysis without Paralysis. London: FT Press.
Cullen, J. B., & Parboteeah, K. (2011). Multinational management: A strategic approach.
Mason, OH: South-Western Cengage.
Cullen, J. B., & Parboteeah, K. (2014). Multinational management: A strategic approach (6th
ed.). Mason, OH: South-Western Cengage.
Cullen, J. B., & Parboteeah, P. (2005). Multinational management: A strategic approach.
Mason, OH: South-Western Cengage.
Hansen, D. R., & Mowen, M. M. (2009). Cost Management: Accounting and Control.
Mason, OH: Cengage.
Mayoux, F. (2005). Value Chain Analysis. New York: Searchlight Publishing.
Peng, M. W. (2009). Global Business. Mason, OH: Cengage.
Powell, B. (2010). Fundamental Principles of Management. London: Sage Publications.
Sekhar, G. V. (2010). Business Policy and Strategic Management. Delhi: IK International
Publications.

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Appendix
Table 1: Summary table for value chain analysis of ABB PBS
Strengths Weaknesses
Firm Infrastructure Supports intriguing
operations
Design of the steam turbines
harnesses power and generate
boiler and power
Low job turnouts, fierce
competition, Retrofitting
surge
HRM Good working environment
to attract new talents
Many workers whose roles
have become redundant
leading to layoff
Technological development Strong and leading steam
boiler technology
Failure to restructure
technology to address the
environmental needs
Procurement Strong procurement policies
to acquire resources and
inputs for the operations
Different procurement
strategies between PBS and
ABB
Inbound logistics Good relationships with
suppliers
Many suppliers with
competing interests due to
the merger
Outbound logistics Maximizes the networks of
each other due to the merger
Lack of sufficient outlets and
warehouses in new markers

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Operations Uses different operations to
transform its inputs into
boilers
Obsolete operational systems
that require restructuring
Marketing and sales Strong buyer base leading to
high financial base
Reduced market share in
Europe due to increased
competition
Service Strong supply chain to
improve delivery and
distribution of steam boilers
Restructuring the delivery
process to improve efficiency