Michael Früh: “It is crucial to position yourself in the right niche”

Robots from F&P Robotics support staff in retirement and nursing homes and can be used for body therapy or in the industrial sector. The company from Glattbrugg, Zurich, was founded five years ago and currently operates successfully in Germany and China. But how can entry and growth be achieved in these competitive markets? An interview with Michael Früh, CFO and Deputy Director at F&P Robotics.   

Michael Früh, CFO of F&P Robotics
Michael Früh, CFO of F&P Robotics

Michael, Germany is an important export market for F&P Robotics. Why are you focusing on this country?
We have good access to Germany, as the country is very similar to Switzerland. The culture, language, mentality and attitude are very similar. And we are no stranger to its structural characteristics, such as an aging society and the increase in healthcare costs. In addition, Germany is the most important country in Europe in the industrial sector. These are decisive factors for our good access to the German market. But it is also important from a strategic point of view. It is advantage to function in Germany for many European research and foundation projects.

How hard was it for F&P Robotics to gain a foothold in a mature market like Germany?
Of course, the competition in robotics is huge – but that’s the case everywhere, including China, our second most important market. However, we are convinced that with our robotic applications we have an opportunity in niche markets and that we can grow. Particularly in the healthcare sector, there are no marketable products that can compete with us. We are the ones developing the market. In the industrial sector, where quality improvement and increasing efficiency are sought, the market is much more saturated and exhausted. We are nevertheless convinced that we can be part of this market, because the demand is there. Our robots are used by companies such as Fielmann and Volkswagen.The advantage is that we receive support for the German market from Switzerland Global Enterprise (S-GE). Among other things, they helped us find a partner company in Stuttgart, which helped us a lot. We were able to build a partnership quickly without any great hurdles or expensive investments.

We are convinced that our robotics applications offer us success and opportunities for growth.   

What tips can you give to other Swiss SMEs who would like to export to Germany?
Companies should clarify their interests at an early stage, select customer groups and evaluate potential customers. We were already in contact with potential customers before we signed a partnership in Germany. That is how we knew that demand was there. Companies also need to consider whether they want to have their own local office or work together with a business partner.

In addition to Germany, F&P Robotics operates in China. The company has founded a joint venture there. How is business developing in the Middle Kingdom?
The joint venture with a Chinese company has the advantage for us that we can use the strengths of both companies. We deliver the technology, and our partner has the scalability and market knowledge. Moreover, the market mechanisms in China work differently than they do here. As a joint venture, we benefit from subsidies from the local government, which promotes collaborative companies. Since August 2018, we have also had a subsidiary in Shanghai to promote our products and provide a direct point of contact for Chinese customers.

How does the market situation in China differ from that in Germany?
The Chinese market can hardly be compared with Germany. China is regulated by the government, and depending on the sector, companies benefit from special subsidies. This is different in Europe; here we are used to a rather freer market economy, and companies operate independently of the state. The rhythm is different in China as well. Companies work meticulously and launch products very quickly. It may be less planned and precise, but the Chinese market does not like to wait. This also affects quantities. They don’t just produce a hundred units; they start off with a thousand, or ten thousand. When it comes to our products specifically, we also feel that the culture is different. The affinity to robotics is very pronounced in China. For the Chinese, robots are not just machines, but beings with a soul and feelings. This means that people develop relationships with these systems relatively frequently and quickly. As a result, “dehumanization” is rarely an issue.

What markets do you want to become active in in the future?
Our focus is currently on Europe and China. Due to a lack of capacity, we cannot tackle all countries at the same time; that would be too time-consuming. If the European markets and China do well, we would like to tap into the US. But that would also mean adjusting our production. We currently produce around 100 robots a year in Zurich, and we are proud of these Swiss products. However, if production increases, we will have to depend on partnerships, which we are currently developing. 

How does F&P Robotics work in robotics without being lagging behind in terms of technology?
To be successful, it is crucial to develop the right technology at the right time and position yourself in the right niche. That was our biggest challenge. We had to clearly define which niche we fit into with our spirit and our strengths. Because robotics is an enormous area and it is not possible to be involved everywhere at the same time. It is also important to decide which systems to develop on your own and which components to purchase.


In January 2019, F&P Robotics celebrates its 5-year anniversary. How has the company developed during this time?
At the beginning we had one employee; now there are 50 of us. As a result, we have developed structures and processes. Commercialization has also made a big leap.  

Did you expect growth this fast?
We knew that things had to move forward quickly. The robotics industry is very dynamic and fast-moving, with an incredible amount of developments worldwide. If a company does not reach a critical size quickly enough, it is difficult to be competitive. That’s why we made a lot of investments in advance even though we couldn’t afford it. But we were always one to two steps ahead.

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