Haier Acquisition of Maytag
In 2005, sales at appliance manufacturer Maytag were suffering due to a combination of rising material and labor costs, increasing competition, and a decreasing market share. When Maytag received a takeover bid from a private US investment group, they opened up the bidding to other offers. One of the companies considering a bid was China 's largest home appliance maker, Haier.
Pros: Cons:
Chinese government policy encouraged its large companies to acquire overseas brands and combine them into a single corporate global brand name. The Maytag bid would fit well with this national goal and with Haier 's own stated goal of trying to make Americans feel like Haier was an established US brand instead of an imported Chinese brand. There was a growing backlash in the US and other areas of the world against this very practice, which threatened to impact sales of Maytag if consumers resented its purchase by a foreign company.
North America was the most profitable Regon for home appliance sales, in which Haier only had a 3% market share. The acquisition of Maytag, with 15% of the market, would have substantially increased Haier 's North American share through the existing brand. Haier could have used their higher global presence and experience to bring the Maytag brand to new markets. The North American market was mature & saturated, and potential for increased growth was less than in other areas of the world like Latin America and Asia, where Haier already had a much larger market share than Maytag. In fact Maytag had very little presence in markets outside the US following an unsuccessful globalization initiative in the 1980s. The burden of moving Maytag out of the US would have been borne entirely by Haier. Also, Haier had to consider whether it would be more advantageous to try to grow the Haier brand in North America independently in the same way that Sony and Samsung had, by establishing emotional relationships with customers instead of trying to do it
Pros: Cons:
Chinese government policy encouraged its large companies to acquire overseas brands and combine them into a single corporate global brand name. The Maytag bid would fit well with this national goal and with Haier 's own stated goal of trying to make Americans feel like Haier was an established US brand instead of an imported Chinese brand. There was a growing backlash in the US and other areas of the world against this very practice, which threatened to impact sales of Maytag if consumers resented its purchase by a foreign company.
North America was the most profitable Regon for home appliance sales, in which Haier only had a 3% market share. The acquisition of Maytag, with 15% of the market, would have substantially increased Haier 's North American share through the existing brand. Haier could have used their higher global presence and experience to bring the Maytag brand to new markets. The North American market was mature & saturated, and potential for increased growth was less than in other areas of the world like Latin America and Asia, where Haier already had a much larger market share than Maytag. In fact Maytag had very little presence in markets outside the US following an unsuccessful globalization initiative in the 1980s. The burden of moving Maytag out of the US would have been borne entirely by Haier. Also, Haier had to consider whether it would be more advantageous to try to grow the Haier brand in North America independently in the same way that Sony and Samsung had, by establishing emotional relationships with customers instead of trying to do it