If there is sizable chance that a single product would outplay the competition then there will be less change for major investment in product development. I think Microsoft is classic example which block most of the innovation. Recent example is Apple which capture most of the market share and force companies such as HP to discontinue its produt. In such scenario, executives would be wary about putting money in new product development especially during such weak economic times.
In general, all other thiings being equal, businesses are more encouraged to invest when the business environment is stable and predictable. Lack of visibility to - 1) government budget 2) government regulations 3) predictability of tax code/structure - all tends to increase the real risk for any investment decision.
I agree with you Barbara. This is indeed a dangerous path. It is one thing for companies to horde cash and not want to invest in new employees, but if they don't invest in their future, then they basically won't have one. I understand getting out of one market all together, as long as you heavily invest in the ones in which you decide to remain. Consumers may be stingy with their money but they are still buying good reliable technology and products. They just need a reason to part with their money. If the companies that manufacture the products don't believe in their own future, why should a consumer believe in their products?
It is a good point Barbara, anyway I believe the status, right now, is heterogeneous and changes region-by-region. Maybe for Western part of the globe, past strategy "make or buy?" has full become "buy", but in addition to India or China, other regions (for example Brasil or other countries from Southern America) are taking the leadership in manufacturing.
Companies are moving down a dangerous path. Even during the worst of times R&D spending is the last thing to go. If companies continue with this attitude we might as well cede the industry to the Chinese (or India) or the next great source of innovation. I have mixed feeling about OEMs going to ODM route. So now what is the role of OEM? Someone used this term once" Outsource Everything but Marketing."
I find it hard to believe that the recent acquisitions regarding patents and old turf are going to be enough to fuel any significant growth. In fact I think in some instances it might cause some job losses based on combining efforts and reducing costs.
What the segment really needs is for companies to come up with some new innovations or major product improvements to draw more customers in. If consumers are being stingy, they are only going to be spending their money on something they think is a game changer. The key is going to make sure this product/s are in the right price category as to not scare people away with too much capital investment.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.