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Group 5, Sec B Rohit Nath Gaurav Patange Mahtaab Kajla Mangesh Patil Sachin Kumar

ABB, world leader in power and automation technologies supplied to Caterpillar which was worlds leading manufacturer of construction and mining equipment More than USD 67 millions of ABB revenue is generated from Caterpillar. Almost 2/3rd of this was generates by sale of turbochargers

Turbochargers represented only 10% of the engine cost and generated less than 10% of revenues for ABBs business unit
Caterpillar was unhappy with ABBs service and felt that they were holding them hostage by charging premium SVP turbochargers did not want Dan of ABB to interfere in the matter

The ever degradation of relationship between Caterpillar and ABB arising partly due to the internal power struggle between BU and GAM

Alternatives
Do nothing

Pros
No efforts required as Caterpillars current share in ABBs revenue is very small

Cons
Lost future prospects of building relationship with such important client Turbochargers emerge as having greater power over group account manager Gives away sense of lower bargaining power to client Client can be more demanding in future Too much of efforts for small revenue share from client Group account manager emerge as powerful than Turbocharger Balance of internal power maintained Client relationship and hence future business prospects increased Win-win for all internal and external stakeholders

Communicate to internal decision making centers of ABB the importance of client and satisfy all demands of Caterpillar

Future prospects may be good from Caterpillar

ABB can negotiate with Caterpillar to increase business if they want flexibility

Since Caterpillars share in ABBs revenue is very small

Since Caterpillar is a world leader in its domain and a prestigious clientele ABB should strive to improve its relationship with them ABB should attempt and remove the misconception that Caterpillar has about its commitment through greater transparency ABB should focus on generating more revenues from other product sales to Caterpillar and reduce dependence on Turbochargers ABB should also deal with the conflict that is arising between the BUs and GAMs. Key member of BU as well as GAM should be on the steering committee to avoid any confusion