A. O. Smith in China: From Failure to Success

An American Company, Built on Integrity

When A. O. Smith USA set up shop in China, it only had a stronghold in America. Their ambitious move to capture the large Chinese market had just begun. Starting out as a small team, they slowly built up their brand on the founding principles of integrity and technology.

“A. O. Smith [USA] actually set the bar for energy efficiency back before the government made it a requirement. Since A. O. Smith was the leader in efficiency, the [American] government required that all water heaters produced meet the energy savings of an A. O. Smith water heater.”

The Daring Move to China

China was a difficult market. Water Heaters in the Asian region required a high level of customization and R&D for weather conditions completely different from that of America and Europe. Furthermore, many of their competitors were global powerhouses such as Ariston and Rinnai who chose not to invest in this research. The focus in China for many of these competitors was to go in fast and sell the cheapest heaters in the largest quantities possible.

This setback however, gave A. O. Smith an opportunity to do what they did best – research. The guys at the AOS wanted to produce something less mainstream; a high technology product that was good for the environment and good on customer’s pockets in the long run.

This set the stage for the establishment of the ‘Robert J. O’Toole Global Engineering Center’, and A. O. Smith’s forage into producing revolutionary high technology heaters in Asia began.

What were the results?

The result? It has been a long journey for A. O. Smith but the customers have spoken and results point to a remarkable success. People want technology that brings them more convenience and saves them money. From starting out as one of the smallest companies in 2001, A. O. Smith has shown that working principles of integrity and listening to what customers really want do play a part in growing from strength to strength.

A. O. Smith is currently the number one water heater company in USA, the number one water heater in China and the largest water heater manufacturer in the world.

External Links:

More on A. O. Smith’s Strategic Moves:

»A. O. Smith: This Water Heater Manufacturer is Sizzling

»A. O. Smith logs 25% Earnings Increase

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