Gigant: Smart Move

From the October 2014 issue.

History has taught us to keep a keen eye on those small businesses shaking up the industry. More often than not, the alleged David can add real value to an industry Goliath if they decide to make common cause.

In January 2013, German powerhouse Krone took over family-owned axle manufacturer Gigant in a move to in-source product expertise and create new synergies in the field of purchasing, manufacturing and aftersales service. But what first seemed to be a common takeover soon turned out to be the start of something much more innovative. 

To understand just how shrewd the new alliance is, it’s important to acknowledge the industry’s rediscovery of vertical integration in the wake of the Eurozone crisis – be it to gain more control over raw material and parts supply or to boost strategic differentiation. Most often, a corporate Goliath would take a rather forthright approach to tie down a supplier for the long term – for example by playing them off against the competition or bringing them into the fold through acquisition. But the Krone/Gigant deal showed us there is a less hostile option – collaboration.

According to Markus Gehle, second-generation Managing Director of Gigant, the Davids and Goliaths are more than capable of leveraging each other’s strengths and perspectives to ensure everybody wins – even in a time of increasing economic pressure. Rather than swallowing Gigant whole, Krone not only preserved the brand’s innovative DNA, but actively disseminated it across the Group.

Q: Mr Gehle, Gigant just completed the first full business year as part of the Krone Group. Are you happy?
A: Yes, very much so. We have reached our target for the first full business year after merging with Krone and we still see growth potential for the time to come, so we’re very satisfied with our current situation.

Q: Obviously much has changed since Gigant joined the Krone family. How did you experience the transition period?
A: The first task was integrating the Gigant brand into the more complex Krone structure, which went really well as our entire team was very supportive. The Krone management was extremely helpful throughout the transition period too – so much so that we now consider Gigant part of Krone. For me personally, not much has changed. Yes, there are a lot more meetings than before as we re-set our goals in line with Krone’s overall strategy, but my job is still the same and very enjoyable.

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