Abstract

The case examines the 'China Strategy' of Danfoss, the Danish heating, ventilation and air conditioning equipment manufacturer. It describes the reasons why Danfoss entered the Chinese market and the initial hurdles faced by the company. Danfoss plans to make China its 'second home' after Europe. The company had been making losses in the country until 2001, after which the company broke even and started making profits. Danfoss had set a sales target of US$ 480 million in China by 2008. The case explains the strategies followed by the company to turn its operations profitable and debates whether the company will be able to achieve its 2008 revenue target or not.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Examine the advantages and disadvantages of doing business in China
• Study the strategies adopted by Danfoss in the Chinese market
• Analyze the future of Danfoss' operations in China
• Study the air-conditioning and refrigeration equipment industry in China.

Keywords

Danfoss, China Strategy, Second Home Market, Business Strategy, Manufacturing Facility, Cold Food Chain, World Trade Organization, Capital Intensive Techniques, Gunaxi, Counterfeit Products Product Categories