Haier Acquisition of Maytag

1097 WordsJan 15, 20085 Pages
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…show more content…
Haier appliances were sold primarily through large chain retailers like Lowe 's and WalMart, while Maytag did this too but in addition had its own storefronts and a large distribution network of smaller, independent retailers which Haier could leverage advantageously. Independent retailers accounted for only 25% of appliance sales, and that %age was falling each year. Best Buy and Maytag had severed ties in early 2005, while Home Depot was adding competing brands Samsung and LG to its inventory. Haier 's Asian competitors were entering the US market with products in the mid-to-high end range. Haier 's products were primarily offered in the low range, and high-end was not an intended focus for them. Maytag 's brands were more focused on the middle-market. The appliance market in the US was splitting into higher-end affordable luxuries, or machines that offered good benefit at reduced costs. Middle-of-the-road brands, which were the core of Maytag 's offerings, were being squeezed out. Haier already priced its own brands lower than Maytag 's lower end, and Maytag had recently raised its prices by 8% to compensate for higher materials costs. If I were CEO of Haier I would not have made a bid for Maytag. The public image of both companies in the US was totally different and integrating them would have been very difficult. Haier was a younger, more aggressive company and the things that American consumers liked about Maytag, its long

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