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Elevator Companies Term Paper
Elevator Companies and Competition
Abtract
The history of business in almost industry is one of initial diversification as a number of different firms move in to a new field and attempt to establish themselves with their particular blend of skills and innovations. As the industry matures, a relatively small number of firms become dominant; in many industries a handful of firms rise to a position of prominence and even near-monopoly status. The elevator industry is currently engaged in such a contraction of number of firms as the leaders in the industry (Otis, KONE and Schindler) are engaged in buying up smaller firms across the United States. In some cases the smaller and medium-sized firms are eager to be taken over by companies that can offer its workers better compensation and that can offer prestige and financial backing to the smaller firms. Other smaller companies have been taken over through a financial version of force majeure - through the process of hostile takeovers.
This research examines whether it is overall more advantageous in the current economic environment to be in the position of buying or selling a company that is engaged in a service industry, a sector of the economy that is especially vulnerable to economic uncertainty. Are small companies likely to benefit from being taken over - even through a hostile takeover? Or are larger firms more likely to benefit from acquiring smaller firms through either friendly or hostile takeovers?
Introduction
The primary rule within the world of business has always been the same as in the natural world: Evolve or die. Businesses are always engaged either in the process of constantly changing to meet changing market conditions or are losing (or about to lose) market share to their competitors. In the constant push to remain competitive and to increase productivity, quality and market share, companies and their leaders have a number of organizational weapons. One of these is the takeover: If one cannot compete successfully with another company, then one can simply buy it and fold it into one's own operations. Of course, this requires money (or the ability to borrow money) but the cost of acquisition…
Sample Source(s) Used
Other mergers followed in Germany, Portugal, Austria, Scandinavia, Switzerland and Spain -- a total of 30 by 1970. The association among Otis, Sumitomo and Matsu*****a to form Nippon Otis in Japan followed. Since then, there have been joint ventures in China and Russia to open up today's emerging markets and, of course, the acquisition in Korea in 1999 that formed Otis-LG, the largest acquisition in Otis' 150-year history.
The history of Otis has been described as a history of remarkably successful acquisitions, scores of companies from every part of the world.
An important period of acquisition for Otis was in Europe in the 1960s. That successful pattern has been repeated elsewhere in the world, strengthening the company through the energy of the new employees that have joined Otis every year (http://www.otis.com/otis150/section/1,2344,ARC2289_CLI1_RES1_SEC4,00.html).
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