Globalization
Carrier is a major organization and a subsidiary of the United Technologies that has operations in 6 continents and in 170 countries where it seeks to provide consistent, noiseless, and energy-efficient products to its huge consumer base. The expansive presence in the global market is an opportunity for the company to introduce products into the market, enforce partnership, and foster innovation. However, Carrier faces stiff competition from cheap products from China especially in developing areas. To reduce operational costs, the company has instituted several strategies such as developing operational and manufacturing plants outside the United States. Like many other major organizations in the United States, such as Apple, Carrier has considered relocating a significant size of its operations to other countries to escape the high costs of input in the US. The recent decision by the company to move 1,400 jobs from Indianapolis to Mexico (Schwartz, 2016) affirming the assumption that free economic trade policy that is aimed at promoting the country’s corporate presence costs the US economy more job positions than it creates.
The Carrier Corporation, therefore, requires an expansion strategy outside the current slow markets to sustain presence and expand in both developed and developing markets globally. As an experienced and well-established company, Carrier should envision a more international competitive strategy by breaking from the over-reliance on the US markets. Strategic partnerships and acquisitions such as the Environment Market Solutions, Inc. will bolster the company’s performance in the global market. The alliance between Toshiba Corporation and Carrier Corporation is one way the company has fostered to improve its global presence (Carrier Corporate News, 2000). The union provides an opportunity for the company to improve its marketing, sales, manufacturing, quality assurance, and innovation in the ventilation, heating, refrigeration, and air conditioning industry.
Technology
Carrier is a leader in the manufacture of the commercial and residential heating, cooling, and ventilation technology systems and therefore enjoys a significant level of expertise and knowledge. This means that the company has an excellent ability to commission research and develop innovative products that satisfy market demands such as green technologies that will reduce its carbon footprint. The company primarily deals with ventilation, heating, and air conditioning technology, which means it, is significantly affected by technological competition in the global markets. Until recently, most of the American companies have lost their global market share for technological products due to the entrance of other major exporters especially China. As such, the company depends heavily on the US markets where it has already established a presence and enjoys the internal preference.
The company still struggles for space with Daikin Industries, Ltd, Hitachi, Ltd, and General air conditioners among others. The cheaper products from China and South Korea have made it hard for the company to penetrate new markets and expand its share in the areas it is already operating in such as Canada and India. However, due to its more than a century experience in providing air conditioning products to big commercial organizations, Carrier is recognized globally as an expert in air conditioning, which presents an opportunity for the company to develop and introduce cheaper and environmentally friendly products. The company, therefore, has a strong outlook in the global market for control systems, especially in the less developed countries.
Political
The stricter governmental regulations and policies on environmental regulations pose a critical threat to the operations of Carrier. The increasing emphasis on green energy solutions means that the company will have to make significant investments to adapt to this trend and cut back on the traditional strengths. The Climate Action Plan (Whitehouse, 2013), in particular, will have a far-reaching impact on the electric energy prices. This means that companies and homes will consume less of air and ventilation products, or forced to look for alternative conditioning products to reduce the costs of energy. Considering that 87 percent of US’s energy comes from carbon-emitting fuels such as natural gas, coal, and oil (U.S. Energy Information Administration, 2013) and that Carrier heavily relies on the American market, the company will have to make significant investments in developing products that consume green energy such as solar power.
Carrier’s major customers are the commercial organizations that are known to consume large amounts of electric energy for cooling and heating. Which are associated with massive fossil fuels and resulting greenhouse emissions? On average, the commercial sector consumes 200-300kW h/m² per year 40%-50% of which is due to ventilation, heating, and air conditioning (Moretti, Bonamente, Buratti, & Cotana, 2013). The increasing campaigns on environmentally responsible practices mean that organizations are adopting clean energy practices, which signifies moving away from the heavy electric dependent products to other green energy products such as solar powered air conditioners. Therefore, Carrier will have to make commitments in conformity to the trends lest it loses its current market share. Fortunately, the current US administration is expected to ease on some of the restrictions defined in the Climate Action Plan (Griffin, 2017). The argument is based on the current administration’s expansionary plans focused towards enhancing the country’s industries.
References
Carrier Corporate News. (2000). Carrier and Toshiba Make it Official, Form Global Strategic Alliance. Retrieved from hvacpartners.com: http://dms.hvacpartners.com/docs/1001/Public/0D/PR081.pdf
Griffin, A. (2017, January 20). Donald Trump will eliminate landmark climate protection plan, says first post on White House website. Retrieved from Indipendent: http://www.independent.co.uk/news/world/americas/donald-trump-white-house-president-global-warming-climate-change-environment-a7538206.html
Moretti, E., Bonamente, E., Buratti, C., & Cotana, F. (2013). Development of Innovative Heating and Cooling Systems Using Renewable Energy Sources for Non-Residential Buildings. Energies, 5114-5129.
Schwartz, N. D. (2016, March 19). Carrier Workers See Costs, Not Benefits, of Global Trade. Retrieved from New York Times: https://www.nytimes.com/2016/03/20/business/economy/carrier-workers-see-costs-not-benefits-of-global-trade.html?_r=0
U.S. Energy Information Administration. (2013, July 3). Energy Sources Have Changed Throughout the History of the United States. Retrieved from U.S. Energy Information Administration: http://www.eia.gov/todayinenergy/detail.cfm?id=11951
Whitehouse. (2013). The President's Climate Action Plan. Retrieved from Whitehouse.gov: https://obamawhitehouse.archives.gov/sites/default/files/image/president27sclimateactionplan.pdf
