Multiplication into New Markets

New Business Segments

New BusinessSegments

Existing Nuclei

Segmentation AC Multiplication Internationalisation

into Divisions

New BusinessSegments

Sub-Divisions / Distribution ChannelsMarket Product Distribution

Channel-Würth Air

-Real estate (Facility

Management)

-Training courses – Academy

for customers, employees

and the public

-Divisionalization by

branches of industry

(mechanics, catering trade,

health, office equipment,

agriculture

-Multiplication of existing

companies in foreign

countries: Eastern Europe /

China / Mexico / Brazil

-Automotive repair home

service

-Home dry-cleaner‘s

-WOW!

-Fittings

-Workwear / protective

clothing and equipment

-Hydraulics

…

-Homeshopping TV

-Internet shop

-Department store range

-Cash and carry branches /

branch offices

-Catalog sales

-Shop in shop

-Tupperware concept

-Supervise parallel lines (Reca /

Würth / InterInox…)

-Franchising

Criteria / Prerequisites for Establishing a Division

Customer group suitable for direct sellingSufficient number of customersRange of consumablesGross profit must finance the sales force and yield a good profitBuying potential per order (order value)Relatively low market entry barriers (competition, purchasing behavior)Capable of multiplicationName that clearly and unmistakably defines the Division

Analysis of the Sequence

Growth MatrixExamples taken from the Würth Line

CompanyAU (mit logo?)

CA Agro ME Install Maint Wood Constr. Bikeline Nautic INDORSY mobil

WOW Modyf

DE-WürthIT-Würth FR-WürthES-WürthFI-WürthAT-WürthBE-WürthCH-WürthNL-WürthPL-Würth RU-WürthAR-Würth….…US-WürthCN-WürthIL-WürthNZ-Würth….…

Growth MatrixExamples taken from the AC LineLänder

Standard Parts

TradeElectro

WholesaleElektronik Production RECA

Deutschland -WASI -Reisser -Ebus -Eisos -Mepla-Alfit -INOX -Conmetall -Unielektro -Solar -Grass -Normfest -Hahn & Kolb -IMS -Fega -CBT -Arnold -SCAR -Kissling -SWG-Trade -… -ICS -SWG -…-… -DiY -… -Reisser

Italien INOX Glessdox FIME HHW Pianeta SCARSpinelli Unifix SWG SOFIMFink Vaja Masten

Frankreich Inter Inox Radialex Arnold Reca Union Hahn & Kolb Normfest

Spanien HHW RECA Normfest SCAR FIME ....

China Hahn & Kolb RECAWASI W-Electronics

Serbien / Montenegro

Hahn & Kolb RECA

Kroatien WASI RECA

Romänien Reisser

Portugal

Controlling Model – focus productivity

Existing Nuclei

Segmentation AC Multiplication Internationalization

in Divisions

Example of A Success ModelHow many Würth Line Companies are there “suitable for a Metal Division“? 91In how many countries/markets is the Metal Division actually active? 43What would happen if …the remaining 48 Würth Companies recruited an additional 10 sales representatives in 2007?

ADM Sales Growth+ 480 + 57.6 mill + 4.9 %

Example of A Success ModelHow many Würth Line Companies are there “suitable for Cargo“? 91In how many countries/markets is the Cargo Division actually active? 17What would happen if …the remaining 74 Würth Companies recruited 10 sales representatives in 2007?

ADM Sales Growth+ 740 + 88.8 million + 33.5 %

Example of the Modyf Success Model

The Würth Line is active in 81 countries!Würth Modyf Companies are active in 11 countries.What would happen if …Modyf started in every remaining country with 200,000 € annual sales in 2007?

No. of Modyf SalesGrowthCompanies81 + 14 million + 63.6 %

Example of the Reca Success Model

The Würth Group is active in 81 countries!The Reca Group is active in 20 countries.What would happen if …Reca recruited 10 sales representatives with an average of 10,000 € in the remaining 61 countries in 2007?ADM Sales Growth+ 610 + 73.2 million + 23 %

Other Examples of New Markets

Stone DivisionHairdressers Division Catering Division GlessdoxTradeNauticalAgriculture

New BusinessSegments

External Growth OpportunitiesAcquisition of1. Competitors2. Manufacturers with the aim of optimizing

procurement - More favorable manufacturing opportunities

abroad- Innovative top performers in terms of competence- Acquisition of well-known suppliers …

3. Dealers – technical trade- Acquisition “close to home“- Industry: oil / gas industry- Protective clothing and equipment- Sale of gaskets and washers - Acquisition of a hydraulics specialist- …

Success Stories and Real Examples

Technical Trade:INDUNORM Hydraulik

Competitors:NORMFEST

Suppliers:MeplaAlfit

New BusinessSegments

Services from A to ZA) Money / finance

B) Consulting

C) Logistics D) Other services

Banking establishment Insurance AllfinanzGlobalization –

China Acquisition Banks Trust accounting

for Würth customers …

Personnel recruitment Business

consulting Employee

recruitment …

Logistics Würth Sea Service offer / outsourcing

–procurement service for customers Overnight delivery /

customer service School buses …

Security service Events Training courses Customer training …

Life Cycle & Demographics (Employees / Company)

0 – 6 Years (Education)

6 – 20 Years (Training)

20 – 65 Years (Work)

65 + (Old Age / Retirement)

-Playschool / After-school daycare-Kindergardens- …

-Theme parks-Training centers-Universities/colleges- …

-Further training institutions-Recreational activities- …

- Sanatoriums / living in one‘s old age (assisted, carefree living, everything is taken care of)-Support by a notary public in inheritance matters- …

Energy & EnvironmentSolar energy / photovoltaics / thermal energyEnergy (wind, water, terrestrial heat)Recycling Water supply …

Example of the Solar Success Model

What is the volume of the international photovoltaics market in 2007 :

~1,800 MWp 2015: 10,000 MWpWhat will the production capacity of Würth Solar be in 2007 : ~15 MWp , Sales ~ 42 million €Market share: 0.8 %What would happen if …Würth Solar had 10 production facilities with 150 MWp production capacity by 2015 ?Capacity incrrease:

1,000 % Sales:~ 270 million €Market share: 1.5 %

Call to the Managers of the Würth Group:

The search for new markets and

possibilities for multiplication must become an integral

element of our corporate culture!

Possibilities for Implementation:1. Commitment2. M & A Team3. R & D Group for all companies4. Trend scouts5. Budget for all FÜKO members to be

used for the investment in new ideas