The Goodman acquisition: full entry into North American residential air conditioning (2012)

What was tested was less the decision to buy than the power to take root

The meaning of this acquisition shows less in the size of the sum than in the choice of entry method. In China, Daikin teamed up with a firm from another industry and built its own direct-sales network; in Europe, it bought up local sales companies one after another to gain its channels. A company that had widened abroad with the flexibility to change its hand market by market chose, in North America, the heaviest move of all — buying the top firm whole. To take on, at the third attempt, a market it had twice retreated from required resolve on that scale.

But buying something whole does not guarantee making it take root. That the model which had worked in China and Europe did not work the same way in North America shows that the success or failure of an acquisition rests not only on price and strategy but on how far you can adapt to the market after you buy. Which method to adopt in which market — this question, which has run through the whole of Daikin’s overseas expansion, rebounded most heavily precisely in its largest acquisition.