Carrier Corporation Case Study Analysis

Topics: Marketing, The Carrier, Carrier Corporation Pages: 11 (3639 words) Published: March 19, 2013
During the 1990’s the Carrier Corporation was working on a highly innovative new global chiller under 300 kW, called Aquasnap. The new design would integrate a Hydronic Kit inside the chiller, all previous versions required installation of the kit outside the chiller. While the new design would cost less, require less installation time, and save floor space, it did raise some concerns. Carrier was becoming deeply invested in the design and was worried if the world was ready for such an innovative product. The following sections answer some of the issues; what should Thierry Jomard’s (lead engineer) decision be, should the hydronic kit be integrated and how does Carrier address future environmental regulations, what are the challenges in creating a global chiller, and how does Carrier reduce market uncertainty.

1.Thierry Jomard’s decision:
Thierry Jomard needs to weight the pros and cons about releasing Aquasnap. One of the positive aspects is that Carrier would increase their market share of chillers under 300 kW. By integrating the hydronic kit into the chiller Carrier would save the customers about $833 in installation costs, cut the installation time in half, and save floor space, as the buffer tank would be eliminated. .

The negative aspects of releasing Aquasnap are; original software would need to be modified and relationships with installation specialists are expected to weaken. Also parts production and price will decrease, therefore raising demand and creating inflation. This will raise the cost of maintenance.

Jomard should release Aquasnap with the integrated hydronic kit to expand the company’s market. The potential outweighs the associated risk. As stated in an article by John Lord, “success and failure can be measured, but it depends on ones definition of ‘failure’ and ‘success’. Obviously, a new item’s sales cannot be tracked unless the product is launched, at least into a test market.” This is just the situation that Jomard is in; the product needs to be launched at least into the test market to see if more investment is worth it. In the article Lord also states, “This problem takes on more importance in an era of more and more precise target-marketing, with product variations created to serve very specific consumer (and even trade) niches in search of very specific product benefits.” This is exactly what Jomard and Carrier are trying to accomplish with the integrated hydronic kit. They would be directing/targeting this product to customers who need a smaller less expensive 300kW or smaller chiller in their home or business.

New products will be successful if they are planned out and executed with good management and full delivery on product concept. Chart 6 (right) shows the success of a new product over the course of weeks. It also illustrates the failure of a new product. The light gray line (inclining) is successful products, the dark gray line (declining) is a product that had rapid failure after it was launched. This study is one that shows that research and knowledge of the market and potential users are key factors to launching a successful product. These failures will appear shortly after the launch date of a product – and failure according to Horban can be complied into a complete set of reasons including poor planning, poor management, poor concept, and poor execution. Overall Aquasnap is a great opportunity for Carrier, they have executed and planned out scenarios, their concept is strong and the installation and changes in manufacturing have been reconfigured to allow the integration to be possible. Jomard should go ahead and push for the launch of this product and take the risk of it being a success.

2. Integrating the Hydronic Kit and Environmental Regulations Jomard should push this design because the projections that have been made would make it seem irresponsible as a company to not integrate the hydronic kit into the aquasnap project. “In the late 1990s, Carrier...
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