The strong positions achieved by the industry leaders in the sales and distribution channel
create consuming challenges for other competitors. For example, Group Schneider from
France had unsuccessfully attempted to build a position in the US electrical equipment
market for over a decade prior to purchasing Square D. The acquisition was logical
because it provided Schneider with access to Square D’s channel. The difficulty of
achieving sufficient, high quality distribution and channel access is further illustrated by
the number of developers of new technologies which sell their businesses or create
alliances with industry leaders in order to gain distribution access.