Exactly where must industrial and manufacturing leaders spend?
Beyond the immediate economic environment, numerous industrial and manufacturing organizations are struggling with problems about just how and exactly where they ought to use desirable workforce characteristics and manufacturing strengths. Should they deploy extra resources to the promising markets of Asia? And if so, what are the tradeoffs, and is it necessary for large industrial and manufacturing organisations to sustain a base of operations and ability in the West even if they are committing more in the East?
The realities of today’s commodity-driven industrial and manufacturing markets make emerging Asian markets an evergrowing aspect to consider for businesses that want to be competitive on price. That is, of course, unless of course quality is very important. “In the event you are competing on manufactured costs then it only makes good sense to locate your production operations in the most cost efficient locations, ” says Gary Williams, a regional consultant in the TRANSEARCH International Shanghai office. “These locations are likely to be in the Far East. The only time you need to to locate your manufacturing operation in Europe or the United States is when the shipping/transport costs to send the goods to the customer are way too high or the desired/perceived quality will not be attained remotely. ”
Sanjiv Desai, a consultant in the New Delhi office, adds: “In some markets where the scales of operations are much larger in the West, it seems sensible for the organisations to have a base there though in alternative sectors where the scales are a lot larger in India or Asia Pacific, it may well not be the case. Having said this, there will be lots of opportunity for developing an R&D or innovation centre based where the sharpest and smartest people are located, which in many hi-tech sectors is still the West. ”
His colleague in Germany, Hans Berg, says that notwithstanding the progression of markets and operating environments in Asia, various industrial and manufacturing organisations have determined that a sturdy European presence is essential. “You can not be the world wide market leader without presence in Europe, ” Berg says. “A large number of big organisations currently have this presence, in most cases with local leadership and, depending of the size of the company, with some expatriate talent from the United States, who can thus improve the international experience and skills which will be required later by those among them who will become global leaders of their organisations. ”
If the recent engagement experience of Transearch Global Industry Practice is reflective of wider market movements, an important issue for industrial and manufacturing organisations is to strike a balance between establishing new business in mature markets versus emerging markets in the developing world.
“Companies will go where there is a need for their products. It’s about supply and demand, ” says Gary Williams from the TRANSEARCH International executive search firm office in Shanghai. “If they do not adopt and embrace the ever changing environment they won’t be very competitive. ” Hans Berg in Germany agrees. “They mustn’t neglect the emerging markets, in particular when volume counts. It delivers the platform and customer base for developing the market further globally in a profitable way afterwards. Developing new business in mature markets provides not only business but also the reputation of being an innovator and leader, thus creating the right reputation for growth in the emerging markets, where state-of-the-art or even avant-garde answers are requested. ”
As the principles of doing business within a fiercely competitive industrial and manufacturing environment continue to evolve, so too, do the demands for world-class management leadership within these markets. In fact, the demands of corporate leadership have never been greater in the industrial and manufacturing markets.
Note to Editors: About executive search firm TRANSEARCH International
Executive search firm TRANSEARCH International has representation in most of the major economic centres of the world with 59 offices in 37 countries. TRANSEARCH International was founded in 1982 and is a leading international executive search firm.
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