Component of the Project: Eaton Corporation Industrials
Overview of the Company
Eaton Corporation Industrials is a global power management company that is involved in the provision of solutions, which are energy efficient and are aimed at helping customers towards effective management of electrical, hydraulic and mechanical power so as to operate in a more efficient, reliable, safe, and sustainable way. The company employs approximately 101,000 employees and operates in more than 175 countries across the globe (ETN, 2014). Eaton Corporation Industrials was started by Joseph Eaton in 1911 and has since evolved from a leader and innovator in vehicle technologies to become a leader in power management globally. Eaton Corporation Industrials also serves aerospace, hydraulics and electrical markets in various countries of its operations. Through its proven technologies and products, the company plays an important role in management of power in various applications that have an impact on the daily lives of human beings, such as green buildings, infrastructures, cities, trucks, and cars among other machines.
Eaton Corporation provides an interesting focus for the application of economic ideas. It is because the company has been able to apply various economic ideas since its inception and it has contributed significantly to its success in the global market. Since the economic ideas can be attributed to the success of Eaton Corporation in its markets, it is appropriate to consider the company so as to be able to illustrate how it applies economic ideas in its strategy. It can help understand and illustrate the reasons that lead to the success of the company in the global market.
Economic ideas are important for the development of the strategies that organizations implement so as to be able to meet their aims and objectives in the market. There are various economic ideas that management of organizations can use to help them towards implementation of their strategies (Blyth, 2002). The main aim of economic ideas is to act as a guideline for the organization strategic objectives. Two main economic ideas that have played the major role towards the growth and success of Eatn Corporation include the comparative advantage and sustainable development. These two economic ideas have been applied to the activities of the Corporation so as to help in meeting its objectives.
Competitive advantage occurs as a result of an organization acquiring or developing an attribute or a number of attributes that may enable it to outperform its rival firms in the market. Some of the attributes that organizations can use to gain competitive advantage in the market include access to the essential resources, technological developments, and access to important markets among others.
Eaton Corporation has used the economic idea of competitive advantage as one of its strategy so as to ensure that it becomes one of the leading players in provision of power management solution in the automotive industry as well as attracts a large number of customers and gains a significant market share. The competitive advantage of the company lies on the use of the advanced level of technology. The company uses the advanced level of technology to provide various solutions that are related to the power management to its customers.
Several factors have helped Eaton Corporation to build its competitive advantage in the market and include diversification, globalization and decentralized structures. In terms of diversification, Eaton Corporation started operating in an automotive business. The company has since diversified to other businesses that include aerospace, hydraulics and electrical businesses. Globalization strategy has enabled the company to expand to the markets that are outside of the United States. It has increased its sales volume as 50 percent of the organization sales comes from foreign markets. Decentralized structures have enabled the company to gain the competitive advantage by ensuring that its regional teams are close to its customers, hence better understands the needs of the local customers.
The products of the company are made using high level of technology that is unique in the market. It makes it to be valued by its customers, hence makes it have the competitive advantage in the market. AAnother area that the company has used to gain the competitive advantage in the market is through its acquisition strategy. The company has realized the rapid growth due to acquisition of some of the reputable companies in the automotive industry. It has made it enter various markets around the world, hence increase its market share. Through acquiring of reputable companies involved in manufacturing of various automotive products, the company has been able to diversify its products and it keeps the company ahead of other automotive companies that mainly deal in one product line. For example, Eaton manufactures various automotive products, such as hydraulic, aerospace, automotive, electrical, brakes, trucks, filtration and industrial clutches. It contributes to its competitive advantage in the market as customers will be able to access different products from the company as opposed to other rival companies that only offer one product line.
Sustainable development can be termed as the development that meets the needs of the current society without compromising the needs of the future generation. Sustainable development has become an important strategy that organizations use so as to help meet the needs of various stakeholders (Montecinos, & Markoff, 2001). Companies that implement sustainable development strategies are not only interested in serving the shareholders’ interest through profit maximization but are also interested in serving the interest of other stakeholders, such as customers, community, suppliers, governments, and employees among other relevant stakeholders. One of the strategies of Eaton is to manufacture and offer products that are environment-friendly. The products of the company are designed and manufactured in such a way that ensures that they are energy efficient and less harmful to the environment. The company develops customer solutions that ensure sustainable growth around the globe and include activities, such as efficient use and conservation of natural resources, reducing of greenhouse gas emission, protecting the environment and facilitations of community development programs.