In January Johnson Controls and Tyco announced their plan to merge.  Johnson Controls also stated that they would establish their corporate headquarters in Ireland. The press releases and news reports detailed the tax benefits, how it affected shareholders, and the two companies combining their lines of business together. But how could the Johnson Controls and Tyco merger affect consumers who purchase fire protection products and solutions?

Choices

These companies manufacturer, distribute, and service their systems. As a consumer, this doesn’t give you a lot of choices because you have to work with their company to some extent. When they’re providing quality service and you’re happy with them then you won’t want to work with any other company. But if there’s an issue you can’t completely cut ties with them. You can switch service providers but you still have to work with their company for installations and programming. Ultimately, they still control pricing on replacement parts, installations, and programming.

Pricing

As two major companies in the fire and life safety industry, they may decide to revisit their pricing strategy. Consumers may benefit in the short term if they reduce the cost of their products and services. By dropping their prices consumers may decide to install their systems since it’s the most cost-effective option at that time. These low prices can hurt other companies if they can’t compete with their pricing. When there are only a few companies left in the marketplace they could decide to work together and instead of offering low prices they increase their pricing. This is why it’s important to have a number of choices in the marketplace because it makes companies strive to provide quality service and fair pricing.

Technology

If you have a Simplex or Johnson Controls fire alarm panel the merger will affect your system in the future. These are three common scenarios that happen when companies merge: the companies continue to produce all of their products, keep one company’s products and discontinue the others, or blend both of their technology and create a whole new line of products.

The company will most likely continue to produce all of their fire alarm products but it probably won’t last indefinitely. One company’s products will outsell the other and they’ll discontinue the products that aren’t selling. In the short term, consumers will continue to be able to purchase replacement parts. But you’ll run into problems if your system is the one they discontinue. It’ll be hard to find replacement parts and they’ll be expensive since they won’t produce them. At that point, you’ll have to decide whether it’s worth spending money on repairs or if it’s time for an upgrade.

Producing a new product by blending each companies’ technology has negative and positive effects on consumers. An advancement in fire alarm technology is beneficial to consumers as long as they continue to produce the original products until they’re phased out. Otherwise, consumers will run into problems if they recently installed a system since replacement parts will be hard to find.

The Johnson Controls and Tyco merger is in its infancy, so it’s hard to say how it will exactly affect consumers. But what’s known is that two companies merged meaning there’s one less competitor in the marketplace. There’s also one less choice for consumers. When the company decides to set their pricing structure and future plans for their products, reflect on the short and long-term implications these decisions have on yourself as the consumer.

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