Mueller Lehmkuhl
Mueller-Lehmkuhl encountered a difficult situation when vying to keep control of its market share with the entrance of a Japanese competitor by the name of Hiroto Industries (HI) into the market. Before then, Mueller’s marketing strategy would pride itself in being able to provide high quality products such as fasteners and accompanying attaching machines. Although the company had been relatively successful in the European market, this market was relatively mature and therefore only experiencing a 1% overall growth. At this point, it was deemed imperative for Mueller to expand to other markets.
The European market had limited Mueller’s ability to take control of additional market share due to a long standing agreement with major competitors to not undercut their prices in order to command their market share. The European marker was an oligopoly, which had four companies commanding 65% od the market share. The oligopoly along with the long standing agreement limited Mueller. Mueller was also limited from within by its merger with Atlas. Mueller was unable to expand into areas currently being serviced by other Atlas divisions. This left Mueller with an alternative of competing on three other facets of their products. This was the quality of their fasteners, the performance of their attaching machines, and the quality of their service.
Hiroto Industries eliminated Mueller’s competitive advantage as they were able to produce fasteners of relatively equal quality at a much lower price. This was due in part to the fact that HI did not carry the additional cost of maintaining and servicing attaching machines like Mueller. HI had been able to effectively transfer these costs directly to the customers, therefore, allowing them to price their products significantly lower. Additionally, HI had been able to produce universal fasteners that current Mueller customers could utilize with Mueller’s attaching machines. The consequence of this was that many