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Weg now made an extensive line of products. From its beginnings as a maker of small electric
motors, the company now also produced large single-phase motors used mainly in industriesmaking durable consumer goods, and three-phase motors used mainly by producers of capital
goods. Other business units included high-voltage motors and generators, servos, automation
equipment,transformers, and paints and varnishes. Its product range extended to transformers
and electrical control panels (see Appendix II for more details).
Weg had started out making products that lackeddifferentiation from its competitors, at the
low end of the value curve. With international expansion, it had gradually moved to products
with higher margins and of greater complexity, including “technologypackages and services”
for electricity generating companies and large energy consumers.
Weg’s main competitors could be divided into two groups. The first included multinationals
with diversifiedbusinesses, such as General Electric (GE), Siemens, Asea & Brown Boveri
(ABB) and Toshiba. The second consisted of smaller companies with a focus on motors and
transformers, including Emerson andBaldor (both from the United States).
GE, Siemens, ABB and Toshiba had annual revenues ranging from US$6 – 14 billion related
exclusively to energy infrastructure, and all offered a broader range ofproducts than Weg.
But these huge conglomerates were progressively shifting their focus to more complex
products in areas besides energy infrastructure, giving Weg more room. The combined
revenues ofits main competitors was estimated at US$50 billion.
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Copyright © 2012 INSEAD 11 02/2012-5857
How to move forward?
As Weg’s CEO is reflecting on the company’s 50 years history andthinking of how to move
forward, he is trying to answer the following questions:
1. How has Weg’s internationalization been carried out so far and what entry modes has it
used?
2. Which were Weg’s key...
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