Zahnradfabrik is a German car parts maker which was established in 1915 in Friedrichshafen, Germany by luftschiffbauZeppeinGmbh to produce gears for Zeppelins and other airships. Zahnradfabrik is agerman word which means ‘Gear factory’.
Specialising in engineering, it is primarily known for its design, manufacturing and research and development activities in the automotive industry.Zahnradfabrik is a worldwide supplier of chassis…show more content… Since there are pros and cons to each and everything there are a few disadvantages as well.
• There are capacity balancing problems. The way that you carried your supplier manufacturer relation previously gets disturbed and therefore working with the same supplier under the same environment gets a little difficult.
• There is a decreased flexibility. The same problem that we mentioned above is that working or carrying out two different functions under the same roof creates a higher level of difficulty for them.
• Creates a barrier to market entry. As we saw before as well that whenever there is a vertical merger the firm becomes stronger and it creates a market barrier for the other firms to enter. This perfectly gets associated with the acquisition that we have in this case because turning out to be a market leader after a second largest acquisition in this case makes it a market leader of a perfect sort.
EFFECTS OF THE ACQUISITION:
The revenue for ZF & TRW automotive initially after the merger was $ 4442 Million. Three months after the merger the revenue increased to $ 4593 Million. This was mainly because of the stature of the acquisition perceived in the automobile market by the