American Expansion Challenges for Advanced Tech Manufacturers
Over the past two decades, the Americas market has experienced a dramatic shift of North American manufacturing to low-cost-regions, a precipitous decline in the U.S. Dollar, and one of the deepest economic recessions in history. These factors have dramatically altered the corporate climate for international companies doing business in the Americas, and new challenges continue to emerge.
Massive shift of volume manufacturing to low cost regions (LCR)
Even as the United States begins to recognize the urgency to create and/or reshore manufacturing jobs to strengthen the economy, the past two decades have witnessed a massive shift of North American manufacturing to China, Southeast Asia and other low-cost regions. While the United States remains a highly attractive consumer market, generating over 24% of the worldwide gross domestic product (GDP) in 2017, only 12% of overall U.S. GDP was derived from its manufacturing sector as much of the historically high-volume production has shifted to low-cost regions.
Intensive focus on new technology adoption
Remaining North American manufacturers are continuously driving new technologies and seeking cost-effective suppliers to maintain their global competitiveness. This intensive focus on new technology has enabled industry leaders in semiconductor equipment, medical instrumentation, homeland security and related high-technology markets to maintain significant research and development decision-making in the United States, even while much of their production has shifted overseas. For international businesses and investors, success in the Americas region relies heavily on supporting these key decision makers, developing strong key account relationships, and securing positions on global approved vendor lists (AVLs).
Extremely demanding customer base
The American customer is notorious for high expectations and a keen sense of urgency. Engineers often expect immediate responses to technical questions or service issues, and “no” is simply not an acceptable answer without a reasonable explanation and a viable alternative solution when possible. These intense expectations are often viewed as unreasonable to international business partners, so a skilled liaison between cultures is essential.
Comparative devaluation of the US Dollar
Despite the relative stability of the United States Dollar (USD) in recent years, we have witnessed a dramatic relative devaluation of the USD versus the Euro (EUR), Swiss Franc (CHF) and other major international currencies since the turn of the century. The loss of more than 50% of the dollar’s value has presented a potential opportunity for North America based manufacturers to strengthen their operations, and to extend their global market share and competitive position.
Historical Currency Exchange Rates: CHF, EUR, GBP, USD
A Committed Partner for Success in the Americas
Alliance Technologies distinguishes its business model by offering direct operational management and expert guidance for all aspects of business enhancement, including Sales, Marketing, Finance, Technical Services, Operations, Logistics, Quality, Human Resources Business Development and M&A.
Keeping our clients’ strategic growth and profitability top of mind, we’ve demonstrated a track record of trust, commitment and success in the Americas.