Markets and Large Companies: Case Study of Parker Hannifin
THE COMPANY Parker Hannifin (PH) is something of a mystery. How does economic theory explain the existence of a large capital goods corporation that produces 800,000 different industrial products, many of them commodities that could be produced by specialized small companies? Parker Hannifin (PH) is a $12 billion industrial parts manufacturer that produces its 800,000 parts and systems in 100 divisions. They produce valves, hoses, motors, pumps, tubing systems, metering devices, and many other products that are components in larger industrial products or systems. PH competes with other large, diversified capital goods companies. Customers are large companies and wholesale distributors, in virtually all parts of the transportation, aerospace and manufacturing industries. One example is Ingersoll-Rand, a large producer of industrial equipment, including Bobcat loaders and excavators. The hydraulic system that opens and closes the d...