Comparing internacionalization strategies within the power electronics industry

Power Electronics is the part of Electronics that is responsible for developing devices, circuits, systems and procedures for processing, control and conversion of electric power.

The need of using it in multiple sectors and industries is growing, so this way we can say that there is great growth in the consumer market of power electronics, seeking in most cases, the optimization of resources energetics. Currently, Power Electronics is present in the converters AC / DC (rectifiers), DC / DC (choppers), DC / AC (inverters) and AC / DC (converters) direct frequency or graders).

Therefore, we can say that Power Electronics is a fundamental element in the development of new structures for the processing of energy, which is taking more relevance every day.

In the industry, there are many companies that develop test equipment and programs simulation and design that help in the design and manufacture of power electronic converters.

Among them we have selected 3 of the companies that we will analyse their internationalization strategy.

Digatron

Digatron Power Electronics is an international group of companies with engineering, manufacturing and facilities services located in Germany, the United States, China and India.

Digatron develops and manufactures computer controlled test and training equipment for all kinds of batteries, such as batteries for mobile phones, cars batteries or huge underwater batteries. But also for other types of electrical energy storage devices such as fuel cells, superlayers and hybrid systems. Digatron provides high dynamic testing and loading simulation systems.

The combination of electronic heavy duty power in linear or switching mode technology together with digital controllers, data acquisition and integral management software is what makes Digatron unique in this field.

Its customers are battery and car manufacturers, as well as laboratories of research and institutes working on new technologies for the solutions of storage of tomorrow’s energy. Within this niche segment are the market leading world with an export rate of 75%.

With the continuous development of systems and techniques for battery testing and training is not surprising that Digatron is considered a competent partner for manufacturers of battery, the automotive industry, research institutes and integrators.

Digatron has acquired an excellent reputation because its equipment adapts exactly to the customer’s requirements. It is manufactured in small quantities with the standards of large-scale production. In addition to the standard equipment, the range of products has expanded and continuously improved..

Origins and location

Digatron was born after the merger in 1988 of two companies:

  • Digatron Industrie-Elektronik GmbH, founded in 1968 in Aachen, Germany. Since the beginning, the company specialized in electronic products purely based on hardware quickly emerged as the international standard factor accepted for the battery test.
  • Firing Circuits, Inc., founded in 1965 in Shelton, United States. The original alignment of the products was large investors in galvanic and drive trains and the necessary ignition circuits (and eponyms)

creating the world’s largest provider of battery testing and training systems. The synergy effects were obtained especially in the field of software development.

Entry modes

In 1994, after China opened the market for Western products, Digatron set up a production facility in Qingdao, China. In 2010 and 2011 the company again expanded its production and storage facilities.

In 2009 Digatron and TBS of England formed a joint venture in Qingdao to manufacture and service TBS equipment in China and other Asian countries. Digatron’s experience of manufacturing in China combined with TBS’ engineering excellence will provide a platform to supply its range of machines to this important area as well as local technical support and spare parts.

In 2013 ADOR DIGATRON Private Ltd. was founded as a Joint-venture for the production of test and formation equipment. The company is located in Pune, India. The city is recognized as the place for car production and components for the automotive industry, with a high level of German and European companies.

Now a team of 300 employees is working for the Digatron group worldwide. After 45 years in 2014 the management of the Aachen HQ was passed into the hands of Kevin Campbell while the ownership of the group remains in the hands of the founder and Chairman, Rolf Beckers.

Digatron also has sales agents in South Korea, Italy, Czech Republic, Spain, Poland and Scandinavia.

Internationalization strategy

Digitron, with almost 30 years of experience in the power electronics industry, has an International or Transnational Strategy, develops the products and services required in each area in which it operates.

Its Organizational Strategy is based on Decentralization and each office works independently.

Its international entry strategy is varied:
ACQUISITIONS / EXTERNAL GROWTH: Acquisitions, External Growth.
Join Venture TBS / Digatron – ADOR Digatron.
They do not follow any strategy in terms of proximity, culture or language.

Gigatron, power electronics company

Plexim

Plexim is a global leader in simulation software for power electronic systems. His software, PLECS, enables customers to speed up product development and innovation by reducing design time and cost.

Our leadership is based on the latest software technologies and simulation algorithms combined with pioneering concepts for modeling. By carefully listening to engineering experts, we offer our new solutions for our customers’ needs, today and tomorrow.

Since 2002, his software is the industry standard for power electronics simulation across various industries. Typical applications are renewable energy, automotive, aerospace, industrial and traction drives, and power supplies. Our customers include market leaders such as ABB, Bombardier, Bosch, Danfoss, GE, Philips, Siemens and SMA.

Plexim’s principal activity is the development and marketing of PLECS simulation software.  Plexim also regularly conducts seminars and hands-on workshops on simulation of power electronic systems.

Origins and location

Plexim GmbH was founded as a spinoff company from the Swiss Federal Institute of Technology ETH Zurich (Suizeland) in June 2002.  It was first hosted by the Power Systems Laboratory at the Department of Information Technology and Electrical Engineering.  In February 2005, the headquarters were moved to Technopark Zurich to accommodate the company’s growth.

Entry modes

In April 2009, Plexim opened an office in Cambridge, Massachusetts (United Estates) to provide direct technical support to our North American customers.

Besides having offices in Zurich and the Boston area, they also have the support of local representatives around the world.

China – Infomatic Pte. Ltd.
Japan – Advan Automation Co., Ltd.
Korea – Milim Syscon Co., Ltd.
Singapore, Vietnam, Malaysia – Infomatic Pte. Ltd.
Taiwan – Industrade Co., Ltd.
United Kingdom -Pulse Power & Measurement Ltd.

Internationalization strategy

Plexim, with 15 years of experience in the power electronic software field, has always followed a global internationalization strategy, selling the same product without any difference between countrys.

Its main structure its centralizated, and directed from Zurich.

ENTRY MODE: It has various international entry strategies.

Export: They export their products from Switzerland.

Greenfield: Internal growth. They have opened a subsidiary company in the United States to support their customers.

Export through local agents: They have distribution contracts in several countries in Asia and also in the United Kingdom.

They don’t follow any strategy in terms of proximity, culture or language, appart from their sales agents, mostly concentrated in East Asia.

Etap

Nowadays, ETAP is recognized as the global market leader in providing solutions for power systems analysis, design, simulation, operation, control, optimization and automation. Operation Technology, Inc. / ETAP is the designer and developer of the ETAP software, the most comprehensive modeling, design, analysis, optimization, monitoring, control, and automation solution for electrical power systems. ETAP is committed to providing quality solutions for electrical power systems. ETAP employs a research and development team supported by a staff of engineers and scientists who have a combined knowledge of over 500 years of experience. The company has been powering success for 30 years by providing the most comprehensive and widely-used enterprise solutions for generation, transmission, distribution, industrial, transportation, and low-voltage power systems.

Origins and location

Founded in 1986, ETAP is headquartered in Irvine, California, USA, with offices around the world, Operation Technology, Inc. (OTI) released the first version of Electrical Transient Analyzer Program (ETAP) power system analysis and design software.

ETAP offices around the world serve as value-added engineering and integration centers for our products and services to meet the growing needs in the region. ETAP’s corporate office encompasses the entire research and development team, engineering division, and supporting staf-ETAP group of companies extends its global reach with over 75 regional sales and support offices in more than 80 countries. ETAP Enterprise Solution serves the international markets by complying with numerous technical standards.

ETAP's yearly expansion in power electronics

 

ETAP sales and support bases amongst the power electronic industry

Internationalization strategy

ETAP, with 30 years of existence in the software industry specializing in power electronics, has followed a global internationalization strategy, selling the same product worldwide, which has evolved over the years, but without differences by region.

Its organizational structure its centralized and directed from California.

It has a varied international entry strategy, with a huge amount of offices, some of them created from the beginning (GREENFIELD), others derived from acquisitions, and others through collaboration agreements (Join Venture).

A comparison chart between 3 companies within the power electronics industry

A conclusion of the three power electronic companies

One: On the one hand, both PLEXIM and ETAP, are companies dedicated to marketing software specialized in power electronics, and both of them have used a similar internationalization strategy, using a global strategy, and creating a specific product , which they sell worldwide without variations, except for those when they evolve their own product. Also both of them are focus on increasing their profitability in improving the product they make, reducing production costs on a global scale.

In terms of their location strategy, both have a central headquarters, from where they started and from which they direct the rest of subsidiaries or agents.

On the other hand, the way of international entry has been different between them, maybe because of their different longevity in the industry. ETAP, with 30 years of experience, has more than 75 offices worldwide, part of them owning and part as agents; while PLEXIM, with half the experience in the sector, only has its own headquarters in Switzerland, and another in the USA that is dedicated to providing support, with only 8 agents to supply its customers.

Two: On the other hand, DIGATRON, also in the same field as he previous companies but with many differences. It has used an International or Transnational strategy, initially elaborating its products in its initial market, and selling them later in other countries where it has opened branches or subsidiaries, with the required variations depending on the needs of its potential clients, therefore its production costs are higher and independent in each of the venues.

Its location strategy was born from the unity of two large companies located in distant geographical areas, therefore their entry way has been through acquisitions initially, and through commercial agreements or join ventures with other companies later. To end, it also has 6 sales agents that serve the rest of international clients.