Monika- 17

Devan- 18
(A): Key Account Management
Natarajan - 21
Surendra KVD 23
B2B-Marketing
Kunal Kaushal - 24
Submitted by: Group -3

ABB & Caterpillar

------------------------------------------------------------------------------------------------------------------------Problem identification:
1. Degradation of relationship between Caterpillar and ABB
arising due to the internal power struggle between BU and
GAM
2. Agency problem between Daniel Ahern GAM, Oliver SVP
marketing turbochargers.
3. Clarity of Daniels power and responsibilities and as an
extension for the whole organisation
Situation Analysis
About Caterpillar: A leading construction and mining equipment, diesel
and natural gas engines. $36.3 billion dollar sales and machinery, engines
and financial products divisions.
About ABB:

A Swiss-Swedish Company with $20.7 billion a world leader in power

and automation
Five Product Divisions: Process Automation Product Portals, Power
Products Division, Power Systems Division, Automation Products
Division and Robotics Division and Organized into a matrix structure
by BU and Geographic market.

Group Account Manager Initiative: Current Account Managers are

moved to the group level from the division level under the leadership of
Frank Duggan with a 30 member team. In 2005 Daniel Arhern is appointed
as the Caterpillar Global Account Manager.
Caterpillar as Key Account: Current the revenues from Caterpillar are
only $ 67 million revenues but is classified as key account for product mix
reasons

Cross-selling other products-Exhibit2 (Turbochargers, AC machines,

LV controls, Instrumentation and Robotics.)

Importance to Turbocharger to Caterpillar relation: $ 40 million

dollars revenue is only from turbochargers. (60 % of sales current revenue
from turbochargers).
Issues with Caterpillar & ABB System Baden: 30% Supplies but only
10% BU revenue.
Personal Goals vs Organisational Goals: Oliver is concerned about
performance of the Turbocharger BU vs Daniel is concerned about
relationship with Caterpillar.
Group Account Manager: Responsibilities of GAM is not communicated
across the group business divisions.
Recommendations:

There needs to be a proper communication regarding clarity of roles

and responsibility within ABB regarding Key Account Managers (like
Dan Aherns power) as well as the key accounts service levels and
standards to be maintained including that of Caterpillars.
1. Top Management should communicate the Importance of GAM
and strategic consideration to nurture the relationship
2. Set Differentiated Service Levels for Key Account.
3. To separate the KPIs for the different SBUs (Strategic Business
Units) for achieving maximum realization of potential.
SBU
KPI

Business Division
GAM
Service
Levels
and Profitability and Growth
Fulfillment

4. To make effective use of Group Account Workshop being

scheduled to take place in Prague on January 17-19 th as an
initial step to promote synergistic collaboration between the

two firms.
ABBs Dan Ahern should try to resolve the cross conflict between the
two organizations by interacting more on a social level with Paul

Monika- 17
Devan- 18
(A): Key Account Management
Natarajan - 21
Surendra KVD 23
B2B-Marketing
Kunal Kaushal - 24
Submitted by: Group -3

ABB & Caterpillar

who happens to be the main influencer in Caterpillar so as to reach

a common aim of leading to a mutual benefit for both.

Dan Ahern needs to be there in the steering committee.
There needs to be a change in the orientation from being a supplier
to a partner. There is a need to become more customer centric from
ABBs point of view and incorporate Caterpillars flexible demands
as well.