Rethink Your Business Strategy
Staying with what is familiar might mean the end of your company. In order to survive, moldmakers may need to look at new opportunities and take some business risks.
Not too long ago, business was somewhat simple. Moldmakers functioned under a set of specific rules. But times have changed. The rules have changed. In fact, no one is certain what the rules are.
Today's businesses are facing issues and problems manifested by the economic downturn, and the downsizing, reorganization, restructuring, cost cuts, hiring freezes and other measures that they have had to take - and have yet to take - in order to survive. Manufacturers and their suppliers have been hit hardest, as loss of business to foreign outsourcing continues and uncertainty abounds.
Competition always has been tough. About five years back, Bill Almon, president of Conner Peripherals - a disc drive manufacturer-stated, "We've got to be ready to battle formidable competitors everyday, forever, without a break. We want to think about competition as if it's the Super Bowl. We want to play hard for the season, win the big game, and sit around during the off-season and gloat about how great we are. But the competitors we face in business today don't want to wait until next year for a rematch. They want to play again next week and every week until they finally win. It's tough for us to accept that we don't control the rules of the game anymore."
That was five years ago. Today, there is an unprecedented level of competition in the moldmaking sector. Moldmakers are losing business to foreign competition, and it appears that things will continue this way into the foreseeable future. Under these conditions, business leaders are asking some hard questions, such as "What can we do to survive?"
Steps to Survival
Business in all industries must take a good hard look at reality, understand what is occurring, accept it and create structures for a more successful future. A major problem confronting companies in the moldmaking sector as well as other industrial sectors is over- capacity. Companies are hesitant to expand and invest in additional products and technologies given the current climate of uncertainty. However, as we all have heard before, sometimes the best time to reevaluate your business and look for new avenues of growth is precisely when everyone else is holding back and not investing.
For moldmakers who want to survive, now is a good time to look at international strategic alliances such as licenses, joint ventures and even company acquisitions, since companies are more receptive to these steps than they used to be during the 1990s. Business is slow and companies are more open to looking at cooperations in order to enter new markets or develop products at a lower cost or on a shared basis.
For companies in the U.S., this means that it is an excellent time to explore possibilities with respect to opportunities in Europe, Japan and other parts of the world. Central Europe has continued to be an excellent repository of highly developed moldmaking technologies. In fact, some companies trace their early beginnings to individuals that immigrated to the U.S. with expertise in moldmaking.
Opportunities abound for those companies with the flexibility and speed to rapidly capitalize on expanding sectors that will continue to grow in the future, such as health care, products for the aging baby boomer population and new types of renewable energy products - especially in relation to wind and solar power generation. There are continuing opportunities in terms of certain basic changes taking place in the manufacturing sector overall with respect to flexible and custom manufacturing and shorter runs that incorporate custom mold bases and new technologies in certain areas such as high cavitation, micromolding and other similar technologies.
The Asian suppliers, especially many smaller Japanese companies in the moldmaking area and certain companies in Germany in the mid-sized segment are more and more moving toward smaller production runs specially tailored to customer requirements so as to fulfill the demand for special products and smaller custom runs. It is very important that U.S. companies continue to upgrade their capabilities in terms of being able to compete and to serve these up and coming markets through new technologies as well as by adding new customers both domestically and internationally.
All industries are going through a consolidation phase based upon the low level of growth in the industrial sector since the Fall of 2000. This means that more companies are open to mergers and acquisitions - and prices for such acquisitions are more in line with current earnings. On this basis it is certainly worthwhile to consider acquisitions, mergers, etc., especially in the small/medium-sized company sector in which a company has developed unique technologies and products. In the future it may turn out that it will once again be more difficult and more costly to find these sorts of acquisitions. Rethink your entire business strategy and be bold! Too scary? Too risky? Consider this: Risk-taking, supported by reason, can be a force of unlimited potential.
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