The Paradigm Shift
Asia's impact is being felt in two ways:
- Western corporations are having their products manufactured overseas at competitive price points.
- Asian corporations are entering the western market on their own under an existing corporation or simply buying a western brand.
Corporations that are not actively maintaining (or growing) their market share will soon fall victim to the "China syndrome." Countries in that part of the world are able to offer value to western customers (Wal-Mart, Lowes, Target, etc.) due to lower wage cost, better pricing on raw materials, and subsidized tooling programs.
All things being equal, a product made overseas can in most cases be manufactured at 20-30 percent cheaper. This savings is then passed on to the buyers for retail outlets, which takes market share away from a company that proudly advertises, "Made in the USA." It's safe to assume that if you're meeting with customers and your products are very similar to ones that other corporations are presenting, in the eyes of the buyer, it becomes a price war. Most companies cannot afford to play this game long-term.
As discouraging as this may seem, we have noticed that corporations that create and introduce new and unique products are still able to command a higher price point and maintain market share. They offer their customers new thinking (instead of ME 2 products) for product introductions, and with products that can be protected through a patent, which minimizes the competition the product would otherwise face.
A company's best course of action is to beat the competition at the source by outthinking them with new product designs that offer value to the end consumer (this is the easiest way to sell the customers you present to).
If you've come to the realization that you need to take action now to weather, beat, and ultimately prevent this increasing shift in product trends, contact us, and we can help you retain what you've worked so long and hard build.