TFI releases forecasts for M&A activity through 2001 and beyond
TFI releases forecasts for M&A activity through 2001 and beyond
Keywords TFI, Manufacturing, Market trends
Although original equipment manufacturers (OEMs) and contract electronics manufactures (CEMs) are moving toward alliances and acquisitions to keep up with outsourcing demand, those companies engaging in M&A activity solely to keep up with competition without sound business strategies are at risk of severe problems and dissatisfactory outcomes. This and other predictions about acquisitions in the CEM market are set forth by Technology Forecasters, Inc. In the new Mergers and Acquisitions report, Mergers in the control manufacturing industry Trends and Best Practices – 2000 edition, released in September.
TFI's industry Consultant Helen Hashimoto indicates, "As OEMs and CMs move along this mutual path of growth and expansion, their relationship has become increasingly closer and more integrated. With each side both supporting and relying upon the other in its quest to increase market share. Thus the CEMs'focus nowadays is not only on acquiring OEMs' divested assets, but also on establishing and maintaining ongoing relationships in which both parties have a vested interest in seeing the other succeed."
OEMs, will continue to look for talent and technology. They will make building staff and acquiring new technology two of their key criteria especially when buying up smaller start-up companies.
CEMs will continue to acquire, merge, or any with a wide range of companies offering electronic design, components, subsystem, systems integration, software and other products and services along the value chain.
OEMs' focus will become less on divesting and more on establishing ongoing relationships with CEMs. These relationships can be considered a type of strategic partnership in which both CEMs and OEMs share a vested interest in seeing the other succeed.
CEMs will expand their scope of services by providing integrated supply-chain management (SCM) services for CEMs. They will look to add value, reduce costs and improve quality within the supply chain by minimising service duplication from suppliers, evaluating the numbers of suppliers, improving time to market. exploring better pricing options and reviewing areas of possible inefficiencies,such as in distribution, logistics management, manufacturing and inventory management. Suppliers, for their part will strive to link with the large, major CEMs whose attractive growth rate in recent years was 42 per cent.
Forecasting the next several years, TFI sees that OEMs will adopt a virtual manufacturing strategy and Continue to use strategic outsourcing as a key element of their growth strategies: TFI consultants predict that OEMs'outsourcing strategy will take the following turns, with respect to divesting facilities.
The Mergers and Acquisitions report will assist decision-makers within the electronics manufacturing industry to meet, if not exceed, their business goals,while leading their organisation down the path to increased productivity,revenue and ultimately, better success.
Further information: +1 510 747 1900; http://www.techforecasters.com
