A strategic analysis of an engineering business unit

The Spindle Service Centre (SSC) of SKF China Ltd. is considering how to grow its revenue to be in line with the corporate parent’s strategy of offering value-added solutions using competencies from diverse platforms. Market demand for machine tool spindle maintenance is tremendous and has grown over last five years as China has experienced rapid economic development since the later 1990s. Additionally, SSC has competitive advantages derived from product functionality, workshop location, market coverage, and ability to provide complementary services. However, the strategically important service business is underdeveloped due to insufficient sales resources. This study was conducted to examine the impact of new product introduction on sales management strategy and the effectiveness of the full-line sales organization. A series of adjustments to the incentive plan, training program and sales role definition are recommended to explicitly accommodate new products added to the existing product line.