Case Study Of Timken

Acquiring Torrington seems to fit well with Timken's long term growing strategy. Torrington and Timken share 80% of their customers but only overlap 5% in their product offerings. Not only would this allow customers to make Timken a one stop shop for many of their needs but also according to a survey done by the University of Michigan, companies that were integrated were more profitable than those who focused on only one good. Acquiring Torrington would help in their efforts of becoming more

They have been able to generate different sources of revenues through commercial banking, credit card and retail financial services, which separates them from competing with some investment banking companies. The accounts, products and features the company offers sometimes have fees which it is willing to waive. Since the company wants the “share of wallet” of high balanced customers, it will take such actions. This action of course has the potential to deepen relationships. In the article by author Charles Keenen he states, “According to Bancography, a consulting firm in Birmingham, Ala., a customer who has just one product with a bank will stick with that bank for about 18 months, but add even one product - a savings account, perhaps - and the average jumps to four years. Customers with three products will stay with the bank for about 6.8 years.”

Economies of scale: Timken has started consolidating operations into global business units to reduce costs. They have expected annual savings of $80 million by the end of 2007 after Torrington’s acquisition.(case) As large size is usually expected to yield production economies if manufacturing operations can be amalgamated, marketing economies if similar distribution channels can be utilised, and financial economies if size confers access of capital markets on more favourable terms.(book).Moreover, by reducing the combined sales forces, Timken expected to realize significant purchasing synergies by giving much large volume to a reduced list of suppliers in exchange for price reductions. One analyst estimated that those

product and starting a price war with competitors that would damage margins. In addition, a low priced

For the corporation that has acquired another company, merged with another company, or been acquired by another company, evaluate the strategy that led to the merger or acquisition to determine whether or not this merger or acquisition was a wise choice. Justify your opinion.

There are various categories of banking; these include retail banking, directly dealing with small businesses and persons. Commercial and Corporate banking which offers services to medium and large businesses (Koch & MacDonald 2010). Private banking, deals with individuals, offering them one on one service. The last category is investment banking. These help clients to raise capital and often invest in financial markets. Most global banking institutions provide all these services combined. With all these institutions in existence within the same localities and offering similar services, there is a need to regulate the industry so as to protect the consumer and provide fair working environment for all banks (Du & Girma, 2011).

With this acquisition, Timken could break into and dominate the European market and use it as the leverage to be the leader in bearing industry.

The Timken Company – a leader in the bearing industry, is considering acquiring the Torrington Company. Torrington Company, a leading manufacturer of needle roller bearings which is an engineering solution segment from Ingersoll-Rand. Both companies operate and compete in same business and therefore, Timken is seeking substantial operating synergies from this largest acquisition of its history. With this acquisition, Timken is increasing the size of company by almost 50 percent. And, Timken will continue to concentrate on what it do best by buying a company in an industry, where it has a leadership position built on decades of expertise. Timken expects to expand its worldwide business base with new products and services as both companies

After several failed attempt of internal diversification, they realized the lack of knowledge of their management about businesses outside the automotive area. so acquisition brought them quick fix where it brought already knowledgeable people in respective areas in their payroll.

Banks take deposits from savers and pay interest on these accounts. They receive interest on loans when they pass these funds on to borrowers. The spread between the rate they pay for funds and the rate they receive from borrowers is where their profits are derived from. This practice of combining deposits from many sources which can be lent to many borrowers forms a interchange of funds

Thus, each bank needs to differentiate their product offers to customer, strengthen their portfolio, and improve services, etc depending on its strategies.

With this acquisition, Timken is increasing the size of company by almost 50 percent. And, Timken will continue to concentrate on what it do best by buying a company in an industry, where it has a leadership position built on decades of expertise. Timken expects to expand its worldwide business base with new products and services as both companies have only 5 percent overlap in their product

and the sale of noncore assets were common. Moreover, in anticipation of sluggish sales in the

All industries need raw materials as inputs to their process. This includes labor for some companies, and parts and components for others. This is an essential function that requires solid buyer and seller relationships. If there are fewer suppliers or if they have certain strengths and knowledge, then they may control significant power over the industry. Threat of substitute is also high, there are more than enough B&R bearing companies out there willing to increase their customer base and if a certain company isn’t producing up to par, than customers will have no problem finding another supplier to satisfy their needs. Bargaining power of buyer will be high due to the increasing number of competitors who are willing to compete for their business and the increasing amount of substitute products available. Buyers tend to have more power when there are many suppliers in the industry and the products are standardized. Rivalry among competition will most likely be the most crucial force affecting Timken due to the high demand for ball bearings in industrializing countries and opportunities available to those companies who are successful in this market. Timken’s competitive edge is in its superior product quality.

It is aimed at the broad mass market and involves the creation of a product or service that is perceived unique throughout the industry. The company or