Electronics Production | January 05, 2011
Globalization means different things to midmarket OEMs and EMS
Globalization means different things to midmarket OEMs and EMS companies than to top tier (“Goliath fringe”) multinational enterprises (MNEs). Opportunities and challenges must be carefully assessed and each company must exercise due diligence to determine if, when and how it should attempt to do business in emerging markets.
CBA research points to a sequential approach emphasizing the importance of ‘FIT’ – flexibility, integration and timing – when choosing an outsourcing solution. Midmarket OEMs increasingly are starting with a ‘clean slate’ and revisiting the make-or-buy decision for electronics manufacturing.
Often, a ‘hybrid’ approach is undertaken, where outsourcing is considered a tool used strategically, rather than a rigid strategy used in every situation. Electronics manufacturing is complex and demanding, requiring close relationships among players; a midmarket company’s brand may be placed in jeopardy through ill- advised decisions related to globalization.
Some findings of the latest Charlie Barnhart & Associates LLC report Next Horizons for Electronics Manufacturing:
- Transportation and utilities infrastructures are critical to high tech industries. Companies selling products related to these areas will be attracted to a region that is investing in infrastructure. Companies that require infrastructure should investigate current status thoroughly.
- Electronics manufacturing requires an educated or at least educable workforce. Literacy rate, school life expectancy, labor force % by occupation and age structure are data points that address this issue.
- If a population is aging and has not made a transition to a primarily urban, industrial economy, it may be challenged to acquire the skills necessary to build electronic products. Labor rates alone do not comprehend the requirements for electronics manufacturing.
- Demand for high tech products is secondary to survival necessities. If people don’t have access to sanitation and clean water, they will not be able to buy electronic products.
- Just because a country has a lot of people, doesn’t mean there is a demand for all types of electronics. GDP/capita, cell phone usage, and number of internet users are factors that help determine readiness for high tech products, but more research into domestic demand for a particular country and product category is required.
- There are different types of customers in an emerging market: government entities, non- government organizations operating in the geography, multi-national enterprises (MNEs) already operating in the region, and lastly the domestic consumer. Companies must have the strategy and the relationships in place within the ecosystem that make sense for their products.
- Cultural differences have the potential to impact markets for electronics. Companies must understand the culture in order to create appropriate products and to bring them to market in a way that is acceptable. It is likely that distribution channels available to domestic companies will not be as easy to penetrate for foreign companies.
- There often are two economies in operation in emerging countries: one for local citizens and one for foreign nationals. Companies usually need a local presence to thoroughly understand the interplay between the parallel universes.
- It is difficult, although not impossible, to do business in countries where the government is corrupt and where there is no rule of law.
-----
Author: Jennifer Read, Associate at Charlie Barnhart & Associates LLC
Shell to acquire german battery manufacturer sonnen
Shell Overseas Investment B.V. has agreed to acquire 100% of sonnen, a manufacturer of...
Engaged & happy employees - clear drivers of growth & health for Season Group
EMS provider Season Group, is flagging a major change in its organisation, both operational and somewhat philosophical. Randy Ziegenhagel, previously VP Business Development, is moving to the new position of Global Culture Officer and...
BB Electronics expands into Eastern Europe via acquisition
Danish EMS provider BB Electronics has acquired Czech company Wendell Electronics.
UK manufacturer doubles work space in head office acquisition
Yorkshire-based Contract Production Ltd has acquired its current head office and production facilities in Pickering, expanding into a third adjoining unit as part of its expansion programme.
Aquantia and Sumitomo Electric to deliver multi-gig Ethernet connectivity to...
Sumitomo Electric Industries Ltd., based in Japan, and Silicon Valley’s Aquantia Corp. have...
Lockheed Martin opens Florida R&D center, adds jobs
Lockheed Martin has completed construction on its USD 50 million, 255,000 square foot...
UAT picks Veeco to bolster fan-out wafer-level packaging portfolio
Unisem Advanced Technologies Sdn Bhd (UAT) has purchased Veeco’s single-wafer solvent...
ESI gets Asia order for FPC laser via drilling system
Electro Scientific Industries (ESI), a division of MKS Instruments Inc. and provider of laser-based...
DMASS: 'the highest distribution sales ever reported in Europe'
DMASS reports 14.2% growth in semiconductor distribution for Q4/CY18. Smaller countries and Eastern Europe benefit over-proportionally. MOS Micro and Optoelectronics below average, says DMASS.
Merger between Widex and Sivantos receives final clearance
The European Commission has approved the merger between Sivantos (owned by EQT funds)...
Finmasi Group acquires German PCB manufacturer
On the 21st of January 2019 Finmasi Group bought 100% of the capital stock of EPN Electroprint GmbH, located in Neustadt in Thuringia region in Germany.
NCAB expands to Malaysia
NCAB Group starts the first quarter of 2019 by establishing operations in Malaysia. The...
Series A funding fuels May Mobility’s momentum
Millennium New Horizons and Cyrus Capital Partners have joined May Mobility’s...
ZAF Energy Systems Lands Strategic Investment from Wirtz...
Wirtz Manufacturing has made a strategic investment in battery developer ZAF Energy Systems...
Johnson & Johnson to acquire Auris Health for $3.4 billion
Johnson & Johnson says that its subsidiary, Ethicon, Inc., has entered into a definitive agreement to acquire surgical robotics company Auris Health, Inc. for approximately USD 3.4 billion in cash.
ZF plans to open new Serbian facility in April
German automotive technology company, ZF Friedrichshafen, is reportedly planning to open its...
Microlease and Electro Rent Europe to join forces
The two companies will unify their European operations to become one of the largest...
OHB awarded ESA contract for the development of...
OHB System AG, a subsidiary of the space and technology group OHB SE, has received funding...
Invotec expands its presence with new facility in Germany
Custom equipment provider Invotec is opening a facility in Villingen-Schwenningen...
WH executive order outlines AI plan, omits critical funding details
President Trump has signed an executive order creating the “American AI Initiative,” which serves as a high-level strategy guiding AI development within the U.S.
AIStorm snags USD 13.2 million in quest to advance edge processing
San Jose-based AI start-up AIStorm has secured USD 13.2 million in Series A financing from...
Related news
Most Read
Load more news