“Everyone expects to grow their market share and everyone plans to be aggressive in their strategies, yet there are no indications that the size of the market is going to increase. Competition is going to be do-or-die.” – Doug Gates, Global Sector Chair, Industrial Manufacturing, KPMG International
Manufacturers had better be ready to compete on every front. New products, new markets, new innovations
Manufacturing executives clearly recognize that they will need to fight for growth. And many plan to be aggressive in the pursuit of their growth objectives. In fact, according to KPMG International’s 2016 Global Manufacturing Outlook, the majority of manufacturers around the world now say they plan to execute an ‘aggressive’ growth strategy. More than one-in-six said their growth strategy would be ‘very aggressive’.
“With limited baseline growth expected in most markets, manufacturers will need to either invest into new technologies in order to ‘grow the pie’ or resort to a brutal competitive fight to steal market share away from rivals,” notes KPMG’s Doug Gates, Global Sector Chair of Industrial Manufacturing and author of the report. “The only certainty is that there will be winners and losers.”
Notwithstanding another major blow to the global economy, manufacturers expect to make some fairly fundamental changes to their business in order to secure new growth opportunities. Four out of every five manufacturers say they will change their range of products and/or services over the next 2 years. Almost every company – 92 percent – says they will try to break into a new geographic market in the near future.
“From automakers investing into mobility platforms to defense contractors investing into commercial cyber security services, manufacturers are looking for ways to remain relevant to their customers while defending against potential disruptors and disruptive business models in their core sectors,” says Tom Mayor, a Principal in KPMG’s US Strategy practice.
We recognize that manufacturers are optimistic about their growth potential. But it is also clear that the pie is not growing fast enough to meet manufacturers appetite. What is clear is that there are going to be really fierce competitions fought over every scrap of market share available and there will certainly be winners and losers.
What are leading manufacturers doing to respond?