Alliance management at

Forbes Marshall

Group 9
Oshin Vijay Kumar PGP/17/028
Rathod Jignesh Divyenbhai PGP/17/037
Tarang Shrikant Doifode PGP/17/38
Sama Shaily Kujur PGP/17/040
Sushant Kumar PGP/17/053

Brief introduction of Forbes Marshall

1926 J.N. Marshall started supplies Textile
accessories textile mills in Ahmedabad
1946 Started alliance with Spirax Sarco to
market Spirax Sarcos products in India. Thanks to
extraordinarily success of Durius Forbes, J.N.
Marshalls nephew, FM was able to sell much
more than what Spirax initially estimated which
paved the way for the oldest alliance of Forbes
Marshall with Spirax Sparco

Spirax Marshall
One of the oldest alliance of Forbes Marshall
Due to many environmental changes, form of Alliance also changed
accordingly
Product category : Steam Engineering solutions

Phase 1 :Initial Joint Venture from 1946-1957

Initially, Spirax will produce products and products were exported to India
Forbes Marshall will be responsible for sale of Spirax Sarcos products
During the course, Forbes Marshall developed stronger capabilities in Sales
and Distribution in India

Phase 2 : 1958-1980s
Changes in economic environment and Government policy lead to change in
the nature of the JV.
Spirax Marshall starts manufacturing facility in India, Spirax acquires 51%
stake in JV
Due to closed nature of Indian Economy, alliance becomes a lull in terms of
exchange and interaction
In 1980s, another change in the regulation(FERA), JV form changes again JV
converted into 40:60 between Forbes Marshall and Spirax Sarco

Spirax Marshall (Cont.)

Phase 3 Post liberalization era after 1990s:
Post liberalization, the profits of the JV increased
However a roadblock occurred since Spirax Sarco felt it did not
receive adequate share of the Joint Venture
Successful negotiations lead to agreement FM retains operational
control, JV becomes a 50:50 venture from 40:50 Venture
Important aspects affecting the Joint Venture:
Environmental changes
Leadership Naushad Forbes made conscious efforts to strengthen
the alliance in 1980s
Realization of synergy through JV for both the parties

Tie up with Cochran Boilers

Product : Steam boilers
Cochran Boilers, which was a leader in boiler
industry, was introduced by Spirax Sarco to FM
Cochrans agents in India were nationalized
and hence Cochran was looking for partners in
India for its product sells in India
Here environment factor becoming catalyst for
the alliance

Alliance with Vyncke

Product : Specialty boiler for waste fuels
1999 Initial contact
2006/2007 Formal decision on alliance with Vyncke
FMs strengths in technical sales was utilized by Vyncke,
FM adds another product in its portfolio
Factors leading to alliance
Strong leadership interaction
Possible synergy effects due to core competency of
each other were complementary

JV with Cambridge Instruments

Product : Measuring Instruments
1960s Local JV was established for manufacturing of
Cambridge Instruments products
Eventually JV was dissolved due to repeated
acquisitions of Cambridge instruments which
ultimately was acquired ABB competitor of Forbes
Marshall.
Another JV with Polymentron for the same product
category eventually leading to JV with Hach ultra
Analytics due to Polymentrons acquisition by Hach
Both the JVs were Responsible for making different
measuring products

Alliance with Krohne Messetechnik

Product : flow meters
1970s FM makes its own magnetic flow meter
1982 Krohne was identified as a potential partner to keep
FM at cutting edge technology
1984 After regulatory delays, Krohne Marshall joint
venture established
JV produced vortex flow meter for India as well as for the
world market
Environmental factors(regulation) in this case became a
hurdle for the joint venture
As intended, FM benefited from the superior R&D
processes of Krohne Messetechnik

JV with Arca Regler

Product : Specialty control valves
Another candidate for the alliance for this product category
was Samson, was however not pursued since Samson was a
competition for Spirax oldest alliance of Forbes Marshall
1985 Arca Regler JV formalized
Initially , technology from Arca Regler were transferred
however, further transfer did not occur during several years
from Arca Regler to JV
Despite that, Forbes Marshall continued to maintain
dialogue with JV partner and developed its products on its
own
2008 However, looking at the growth of JV, Arca signed
MoU and increased stake in JV from 33.35% to 50%

Case of Codel

Product :Emission Monitoring equipment

Earlier, Ametek and Maihak were alliance and both failed
1997-98 rapport based informal partnership with Codel
2007 Formal JV with Codel
Unique Features about this alliance
Codel itself approached Forbes Marshall for alliance partnership
Codel was significantly smaller company than the other
companies with which FM had alliances
FM chose to go for acquisition with equity arrangement due to
its cultural fit, size and value addition in FMs product portfolio
instead of just keeping it as an alliance

Value Creation
Adding
Volume

Gaining
knowledge

Decreasing
cost

Value
Creation
Normalizing

Differentiation

risk

Improving
Ind.
attractiveness

Benefits of Alliances in Nutshell for FM

Timeline

1946

1980

1985

2007

2007

Spirax

Krohne

Arca Reglar

Codel

Vyncke

Company

2009
Vyncke
Energieteciek

Steam
Engg.

Flow
meter

Marketing/Sales

Logistics

R&D
Management and
control

Market Entry

Manufacturing

New Technology

Control
valves

Emission
&
emission
monitorin
g

Boiler

Biomass
energy

Alliance vs. Acquisitions

Look before you Leap - alliance provides
less riskier option in new markets

Riskier compared to Alliance

Easier to form an alliance based on

capabilities

Requires capital requirements for

acquisitions

Difficult to manage partners cost of

managing alliances

Control is acquired and hence no issue of

managing partners, however, cost of merger
still exists

Cultural fit sometimes may not be required

Cultural fit is extremely important for a

merger to be successful

Less control and risk of break up, also

movement of Human Resources becomes
and issue dues to different priorities of
alliance and parent companies

Control is with the acquiring firm

In case of Forbes Marshall, due to its size(and hence its ability

to generate capital) , its capabilities, risks involved with
uncertain environmental factors, etc. were the reasons why
Alliance was more attractive option than acquisitions

JV Management Model
JV1
Mfg
Engineering
Marketing

Forbes Marshall

JV2
Mfg
Engineering
Marketing

Finance
MIS
HR

JV <n>
Mfg
Engineering
Marketing

JV3
Mfg
Engineering
Marketing

How Alliances Managed by Forbes Marshall

Aspects

Steps Taken by FM

Managing Alliance Partners

- Several meetings in a year to maintain

relationship
- Avoiding conflicting partners for
alliance
- Having patience with JV to become
successful(Arca Regler)

Managing Culture across Alliances

- Employees at various levels in the

were sent to partner site for Training

New alliances

- Role of leadership in finding out

alliance partner
- Learning from prior experiences,
Alliance formation became more
systematic and strategic

Apart from this, leadership of Forbes Marshall and their interpersonal skills become
important while managing alliances and with in house grooming program for
management positions, leadership skills required for managing alliance stemmed
from the practices of FM

Thank You!