Acquisition of ZF & TRW And 5 Forces Module on ZF&TRw

5 forces for ZF & TRW
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In 2014, ZF Friedrichshafen a German auto parts supplier acquired TRW Automotive also US auto supplier and manufacturer based in the U.S. The acquisition of TRW was necessary to improve the company’s competitiveness in the automotive industry, with TRW having expertise in safety and braking industry (Lee, 2015). Driver-assistance technology can improve the company’s differentiation to improve competitiveness since it would have better financial prospects and research capability to improve innovation. The ZF TRW Company conducts research and integrates technology to improve autonomous driving, while it is now the second largest automotive suppliers in the world (Bolduc, 2016). Acquisition is crucial to creating synergy by integrating new technologies to provide solutions to the customer, and meeting their needs (Bolduc, 2016).
The production of more safety systems in the automotive Markets industry will be beneficial to improved operations and the company has a high growth potential (ZF.com, 2016). However, buyers are buying vehicles with the intention of owning them for long. With buyers increasingly calling for improved safety standards and comfort in vehicles. The bargaining power of buyers is moderate, as advances in technology influence the direction of the company. Buyers demand high quality inputs, they may lack information to influence services.
Even though, ZF and TRW merged there is low vertical integration among the suppliers, while the bargaining power of suppliers is moderate. Market players like Volkswagen have forded relationships with suppliers to cut costs (Bray, 2014). The acquisition of TRW allows the consolidated auto supplier to play a bigger role in automotives. As such, ZF TRW has strengthened its position in automotive Market as the company will be better placed to acquire components for the manufacture of automated driving components than before, but other external factors influencing the supply chain should be considered (ZF TRW, 2016).
ZF TRW faces competition from other major players in the automotive sector, and this is especially companies that adopt technology. The competitive rivalry in the automotive market is strong. The merger gives the company a competitive edge, while Bosch and Japanese based Denso Corp. are some of the competitors in diverse markets across the globe. In the case of heavy vehicle tie rods that is highly concentrated, Urresko is the main competitor in North American market (FIND, 2015). There are high costs of investments and the market players are unlikely to exit unless they remain uncompetitive.
The threat of new international entrants is moderate, but there could be other mergers and acquisitions as companies seek to expand into new areas of operation. One of the reasons for weak threats of new entrants is that there are high switching costs, capital costs, strong position of the major players, while developing brands also takes time (FIND, 2015). ...