whirlpool case study
1. Reason for the merger and acquisitions in the US and European appliance industry:
Reactive reasons:
1. International competition: International competition arises when a company from one country goes for manufacturing in other country. In US the appliance industry was highly competitive because of the domestic and foreign competition. The competitors were Korean, Japanese and European appliance industries. More over the appliance industries was so competitive that no single domestic manufacturer could keep an innovation to itself for more than a year without patent. So the big five-appliance company decide to merge with European companies to cope with the international competition as well as to enlarge existing facilities.
2. Trade barriers: When companies go for globalization, the trade and tariff barrier has become an important issue. So the government regulation outside the US is also very significant because the environmental standard prevailing in the European community would become a law in the United States. To avoid the trade barrier the appliance industries of US merge with the European industry.
3. Regulation and restrictions: If the home country may have regulation and restriction upon particular product then domestic industry can merge with foreign company and sell product in other country. In US government have regulation upon appliance industry, national Appliance energy Conservation Act limited energy consumption and reducing energy uses by 25% in every 5 years. More over the ozone-depleting CFCs force the industry to redesign its refrigerators, washer and dishwasher to reduce water consumption and noise level. So US companies merges with Europe to sell their products in Europe to avoid government restriction.
4. Customer demand: Though the demand of appliance of US is unattractive but the customers of US prefer the style of European appliance because of its fashionable white-on-white look. In other hand, almost 320 million customers were in
Reactive reasons:
1. International competition: International competition arises when a company from one country goes for manufacturing in other country. In US the appliance industry was highly competitive because of the domestic and foreign competition. The competitors were Korean, Japanese and European appliance industries. More over the appliance industries was so competitive that no single domestic manufacturer could keep an innovation to itself for more than a year without patent. So the big five-appliance company decide to merge with European companies to cope with the international competition as well as to enlarge existing facilities.
2. Trade barriers: When companies go for globalization, the trade and tariff barrier has become an important issue. So the government regulation outside the US is also very significant because the environmental standard prevailing in the European community would become a law in the United States. To avoid the trade barrier the appliance industries of US merge with the European industry.
3. Regulation and restrictions: If the home country may have regulation and restriction upon particular product then domestic industry can merge with foreign company and sell product in other country. In US government have regulation upon appliance industry, national Appliance energy Conservation Act limited energy consumption and reducing energy uses by 25% in every 5 years. More over the ozone-depleting CFCs force the industry to redesign its refrigerators, washer and dishwasher to reduce water consumption and noise level. So US companies merges with Europe to sell their products in Europe to avoid government restriction.
4. Customer demand: Though the demand of appliance of US is unattractive but the customers of US prefer the style of European appliance because of its fashionable white-on-white look. In other hand, almost 320 million customers were in