Kanthal Case Essay

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The paper is for communication, please delete the paper in 24 hours. For the exclusive use of S. ZHANG Harvard Business School 9-190-002 Rev. April 27, 2001 Kanthal (A) Carl-Erik Ridderstråle, president of Kanthal, was describing his motivation for developing a system to measure customer profitability. Before, when we got an order from a big, important customer, we didn’t ask questions. We were glad to get the business. But a small company, competing around the world, has to concentrate its sales and marketing resources. We needed an account management system if we were to achieve our strategy for higher growth and profitability. An account management system as part of the Kanthal 90 Strategy will enable us to get sales managers to accept responsibility for promoting highmargin products to high-profit customers. History Kanthal, the largest of six divisions in the Kanthal-Hoganas group of Sweden, was headquartered in Hallstahammar a town of 17,000 persons about 150 km. northwest of Stockholm. The company’s history can be traced back to an ironworks founded in the 17th century to exploit the water power available from the stream running through the town. Kanthal specialized in the production and sales of electrical resistance heating elements. “We work for a warmer world,” was its motto. Kanthal had about 10,000 customers and 15,000 items that it produced. Sales during 1985 through 1987 had been level at about SEK 850 million.1 Export sales, outside of Sweden, accounted for 95% of the total. Summary statistics for the past two years appear in Exhibit 1. Kanthal consisted of three divisions: Kanthal Heating Technology supplied manufacturers of electrical appliances and heating systems with wire that generated heat through electrical resistance. Products included heating wire and ribbon, foil elements, machinery and precision wire.

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