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Question: Discuss about the Case Study of Aalborg Industries. Answer: Introduction AALBORG industries is one of the leading manufacturer and supplier of burners, boilers, inert gas systems and heat exchangers for many years (Aalborg.com 2018).. This company mainly caters to three industries which are marine, oil and gas and industrial units. The company Aalborg industries was started in the year 1919 as a boiler manufacturing and engineering company. Aalborg Industries since its inception as Aalborg shipyard has developed a business for service and supply of power stations and industrial boilers. The aforementioned company started its first abroad subsidiary in the year 1978. It was till the late 1960s that the company provided boiler services around the world. However, in recent times the company has developed an expertise in equipment supply and service for the floating productions system in the offshore market. This has been possible due to investment into additional resources. It can be stated that the Aalborg industry now operates on a global scale. The main p roduct centers of Aalborg industries are located in Denmark, Brazil, Rotterdam, Australia, China and Vietnam. It can be mentioned that the company Aalborg industries is owned by Nordic Investment companies and the company exists as a private limited company. The aforementioned company has undertaken and successfully completed many large projects which include boiler repairs, installation of new boilers with control systems, boiler retrofits and complete burners. The company has installed complete modularized units on decks in areas which are hazardous. However the company has also installed systems in engine rooms which are based on normal marine standards. Background of trade The marine sector is one, which has been benefitted by the increase of international trade. Many industries have emerged in this sector which includes shipyard industries, suppliers to the shipyard industries, companies which deal in buying and selling ships. Aalborg industries is on such industry existing in the marine sector which acts as a supplier to the shipyards. All these industries together constitute the marine sector. Due to the increasing focus of trade on the Asian countries the maritime industry has evolved in the recent times. Most of the Ships are produced in countries South Korea, China Germany, Turkey, Croatia, Poland and Australia. It has been noted that in recent times that the tendency of marine industry is to build larger vessels in large numbers to cope with the increasing demand of global trade. The marine industry can be described as a fairly conservative industry due to the high cost of production and the risks associated with the breakdown and accidents of s hips. A makers list is maintained by the ship-owners which makes it difficult for the companies like Aalborg to change suppliers or accept a new supplier. A makers list particularly specifies the types of components and the brands of such components which are required by the ship owners. In recent times the rapid growth of the Maritime industry has been hampered by the global financial crisis and the rapid drop in global trade. A simple connection exists between global trade and global transportation. The demand for International transportation decreases when International Trade decreases. Thus it can be assessed that economic growth is ultimate factor that contributes to the growth of the marine industry. Due to decrease in Global trade and the financial turmoil, globalized companies have suffered greater losses. Process of Internationalization Internationalization can be defined as the process expanding the operations of an organization in international markets. It also means increased involvement of enterprises in international markets (Pietrovito, Pozzolo and Salvatici 2016). However there is no widely accepted definition of the term internationalization. The company Aalborg industries is a Danish Company which specializes in Boiler manufacturing and boiler production and engineering. It has its headquarters in Aalborg. Aalborg industries originated as a part of Aalborg shipyard. Aalborg Industries since its inception has expanded to and supplying marine boilers to international shipyards. It has also developed a business of supplying and servicing of PowerStation and industrial boilers. The aforementioned company has been carrying on boiler services all across the world since the 1960s. However, it first opened its first subsidiary in an abroad nation in the year 1978. In recent times the company operates on a global sc ale as a multinational company which has factories in countries like Brazil, Denmark, China and Vietnam. The company Aalborg industries has a long history of engineering and manufacturing of boilers. The first marine boiler that had been made by the company was in the year 1919. The process of manufacturing small boilers by Aalborg industries went on till the 1920s. The company started manufacturing gas and oil fired burners in the 1930s. The aforementioned company became hugely successful after it was acquired by the Danish ship owner J. Lauritzen, subsequent to which the company was renamed as Aalborg Shipyard Ltd. The company Alborg Shipyard began to manufacture marine boilers for international shipowers and shipyards in the 1950s (Aalborg 2018). This was a huge step towards the success of the company and its internationalization. The formation of Aalborg industries service organization created competitive advantage by offering reliable and accurate after sales services to ships and vessels all over the world. The process of internationalization of the company continued at fast pace after the formation of the sales offices at major and busy ports of the world. Alborg Shipyard closed down in the year 1987. The company Aalborg Marine Boilers and Engineering was extracted from the remains of the closure of the aforementioned company. The shutdown of Aalborg shipyard meant that the new company, Alborg Marine Boiler and Engineering had to look for new customers in markets abroad. Aalborg industries focused on locating its activities near the important markets. It also focused on maintaining accuracy and product quality. The 1990s and 2000s marked the growth and success of Aalborg industries as a lot of its competitors and complimentary companies were acquired by the owners of Aalborg industries. New manufacturing sites for boilers were also established in abroad nations during this period. As stated before the company experienced positive growth and expansion in late 90s and 2000s. The ownership of Aalborg industries was sold off by J. Lauritzen in the year 2000 to a Danish Investor group, which were headed by an investment company called excel. It was further sold to a Nordic investment group called Altor 2003 Fund. Altor introduced a new strategy, which involved realization for unexploited opportunities in global markets (Pietrovito, Pozzolo and Salvatici 2016). In order to experience a suitable result, the company implemented global procurement, global technology and global manufacturing functions. The pricing was done in relation to the local production costs incurred and portrayed an average pricing for the product. The rate of success was comparatively lower in 2009 than that in the previous year, however the financial profits were favorable for the organization. It was during this time that Aalborg industries experienced a drop in its orders and a small percentage of which were cancelled as well. However, the company through its cost cutting techniques was effective in the handling of the situation and this led to risk management becoming an essential part of the strategic development policy of the company. It was assumed that the shipbuilding industry would experience a greater drop in sales. This led the company to identify the risks as competition, purchase and sales affected by the global economy, new trends, product failure and the cancellation of orders. The marine boilers and heat exchangers turned out to be the biggest strength for the company as it owned almost 50% of the worlds market regarding the sale of these products. This allowed the company an opportunity to expand into more potential markets. Aalborg Industries utilizes the Global After Sales business group to provide various services on their products, ranging from training, repairs inspections and others. Over the years, the company has shifted its focus from prioritizing on the production and engineering of boilers towards understanding and fulfilling the wants and needs of the consumers. The expansion of the company into the markets of Brazil and Vietnam still remain unclear, but the expansion on to these markets provided a great scope to the company to target the markets of other developing countries. The company has been efficient in its operation of manufacturing in Asian countries and then bringing the product back t o its home country since, the costs of production are lower in these countries than in Denmark. The low cost of wages in the Asian countries has been beneficial in this case. This strategy of the company was a clever one, which also ensured the penetration onto the Asian markets as well as lowering production costs with ease. Lastly, the company makes sure that it provides a certified high quality of product to its customers, along with providing proper documentation as well as the power to trace back all its components to the original source in order to verify the authenticity of its products. The company stresses on the need of certification of its products solely for the purpose of establishing a sense of trust among its consumers and increasing the brand value and goodwill of the company in the process. The company has also made it a point to deliver the products on the exact date that is mentioned and thus, requires effective management in the ship building process. The ship building process is a long process and with proper supervision and use of skilled workforce, it is possible to complete the project and meet the promised deadline. Although China has the presence of many small enterprises that manufacture ship boilers, its main drawback has been the lack of proper certification from reliable sources. This has led to the Chinese maritime industry being unable to conduct their business on the international market making Aalborg Industries experience very few or almost no competition in the Asian market (Poulsen 2013). Kangrim Heavy industries Ltd., which is located in Korea can be considered to be one of the dominant competitors in the maritime industry since it has efficiently captured almost 14 to 15% of the global market and is dominant on the Korean market as well. The company concluded its shipyard operation in 1984 but the acquisition of many subsidiary companies throughout the world ensured that this has very little impact on the business operations of the company. The company soon implemented a strategy to set up a target of profits and losses incurred by these subsidiaries, to understand which areas showed the best results and had the potential of delivering more. Once this analysis was complete, the company unified all its subsidiaries into business groups in order to manage them better. This led to a greater degree of collaboration among the numerous departments and employees. The employees, including the managers and executive staff were all aware of the goals and objectives of the company and worked towards achieving them. Global Trends The rising trend of globalization of the industries has had a great impact on the numerous barriers to trade as well as cultural differences. Every country has its own separate set of laws, political environment and cultural practices. However, these new areas of market provide great opportunities for sales for the company and this serves as an important factor. In case of the Aalborg Industries, globalization had a great affect on the policies of the company and it started offering a standardized product instead of a customizable and unique product. The cost cutting strategy of the company by shifting its manufacturing outlets to regions where the cost of operations is cheap had been quite effective in the implementation of providing standardized products. Even though there have been advancements in technology that have helped in the free flow of information between the borders, the issue regarding the rate of tax, legal policies pertaining to business operations and so on, still pe rsist. The Aalborg industries were founded in Scandinavia and the country has minimum restrictions regarding the cross border trade that takes place. Hence, the areas close to the Scandinavian borders served as easy to penetrate markets due to the similarity that exists in the language and culture of these areas with Scandinavia. Porters Diamond Model According to the statement by Porter, the scope of conducting business in a nation relies very much on the development and innovation activities taking place. Any company that wishes to gain a competitive advantage needs to consider these factors as well. Porter believed that the diverse nature of culture, education and economy would be greatly beneficial to an organization if it is utilized properly. Aalborg industries, due to its association with the oil and gas business has faced many criticisms for the rising impacts on global warming as well as pollution. Countries such as Denmark, have strict rules regarding the emissions of pollutants and use of natural resources, with the International Maritime Organization making sure that the established protocols are followed. Hence, Aalborg Industries needs to check the rate of emissions from its ships. This has also led to the company investing more on RD activities in order to implement the necessary changes on the architectural designs of its ships. The use of environment friendly goods and resources lead to a great rise in the operating cost. However, the Aalborg Industries enjoys a favorable competitive position since it had already implemented these regulations on its production/manufacturing process a long time ago (Momme and Hvolby 2013). Apart from this the, education imparted on topics of engineering, biotechnology and others, through the Aalborg University have been greatly significant in the development of Denmark and also had a positive impact on the economy of the country (Fernandez-Guerrero and Evers 2018). This provides a greater availability of highly qualified and skilled labor force in the country. Conclusion Thus, the conclusion can be drawn stating that the globalization and cross border business has allowed Aalborg Industries in widening its area of operations onto other countries and regions. However, this would not have been possible without the implementation of the carefully planned strategies in the expansion plans of the company. Being established in Denmark, the company experienced no problem in adjusting to the changes in the environmental laws on a global scale, since most of its operations were already following the established protocols of Denmark. This gave the company a great boost in terms of its competitive position. Regardless, the most important strategic decision of the company to change its focus from only conducting international business, to looking after the needs of the consumers played a major role in the growth and increase in sales of the company. In recent times, it is essential to cater to the consumer needs and wants of the consumers for the survival and gr owth of business operations for any organization and Aalborg has been successful in this process. References Aalborg.com. (2018).Aalborg, Manufacturer of High Quality Flow Instrumentation. [online] Available at: https://www.aalborg.com/ [Accessed 2 Apr. 2018]. Fernandez-Guerrero, D. and Evers, G., 2018. Co-creation of localised capabilities between universities and nascent industries: The case of Aalborg University and the North Denmark Region. Momme, J. and Hvolby, H.H., 2013, April. How to approach and implement strategic outsourcing programme in a global contextcase study of Danish. InGlobal Production Management: IFIP WG5. 7 International Conference on Advances in Production Management Systems September 610, 1999, Berlin, Germany(Vol. 24, p. 332). Springer. Pietrovito, F., Pozzolo, A.F. and Salvatici, L., 2016. Internationalization choices: an ordered probit analysis at industry level.Empirical Economics,50(2), pp.561-594. Poulsen, R.T., 2013. Diverting developmentsthe Danish shipbuilding and marine equipment industries, 1970-2010.Erhvervshistorisk rbog,62(2), pp.57-77.