Clayton Industries Case Study
Clayton Industries Inc. was founded in 1938 Milwaukee. Their business was built around window-mounted room air conditioners for residential and light-commercial applications. In the early 1980’s Clayton saw growth opportunities within the North American commercial sector, as well as in European residential and commercial sectors. In its expansion, Clayton acquired Corliss, Fontaire, Control del Clima, and AeroPuro, all European-based companies. These four companies made up what was then known as Clayton Europe. However, Clayton’s entry into this market was not without issue. Issues
Per the case study,
“Early progress was slow. While the European market for air conditioning began to grow in the 1990’s, it was from a low base. Even in 1998, air-conditioning was only in 7% of homes in Italy, and 11% in Spain, compared with U.S. penetration of 71%. Many Europeans saw air conditioning as an expensive American luxury that harmed the environment.” This represents the first, and broadest, of several issues Clayton encountered in regard to taking on a new market. Obviously, the European market does not see air conditioning as a necessity like many people in the American market do. This week’s text material and discussion board talked cultural intelligence. Specifically, I talked about several successful state-side companies who essentially flopped because they weren’t familiar with the wants and/or needs of that particular marketplace. It is essential for a company to know the market they are trying to enter; otherwise, failure is a likely possibility.
More specifically, Clayton Industries Italian subsidiary, Clayton SpA, was the main focus for this case study, and described several struggles they dealt with. SpA took a major hit due to the global recession. “Sales were down 19%, and after decades of solid returns, Clayton SpA was in its third year of...
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