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Competing with Southeast Asia: A Strategic Plan
While SE Asia and other areas of the globe present a new challenge to US shops, success has not become an impossibility. It is vital that today's North American manufacturer carefully analyze the market and capitalize on all available advantages. SWOT (Strength, Weakness, Opportunity, Threat) analysis provides a particularly effective tool for taking inventory of your shop's position and maximizing your potential for profit.
Below you will find a SWOT matrix that compares the advantages and disadvantages of the typical American job shop in relation to SE Asia. You can also download a worksheet to help you start and complete your own, personalized SWOT analysis. By recognizing where you're strong, you'll discover the best areas to focus your efforts and enjoy continued success in this global marketplace.
SE Asia SWOT Matrix
| STRENGTHS |
WEAKNESSES |
• US/Local
| • Visits |
| • Freight & Duty |
| • Delivery |
| • Easy to correct files |
| • Same culture |
| • Not dependent on IT for communication |
| • Same time zone |
| • Common Language |
| • Credibility through visibility |
| • Closer Relationships |
| • Stable exchange rate for ongoing orders |
| • War time availability |
| • Short/Strong supply chain |
|
• Other
| • Basic and skills education |
| • Chinese take the long term view |
• Less committed to process and product
improvement |
|
• Mature Economy
• Subject to enforceable product liability
(vs. China & somewhat vs. L. America) |
• Subject to enforceable confidentiality regarding
intellectual property |
| • Environmental regulations |
| • Known source vs. many uncontrolled levels |
| • Known material |
| • Quality (real or perceived) |
| • Some material costs, e.g. Nickel & tool steel |
| • More experience |
| • Political stability |
| • Personal safety |
| • Ingenuity |
| • Low staff turnover |
|
• Mature Economy
| • Labor rates/total compensation direct and indirect |
| • Skilled labor availability |
| • US Government regulations and taxes |
| • Long deliveries because of poor 24/7 Manning |
| • Manufacturing's image |
| • Unions |
• Low annual investment in new technology
(40% of China's) |
|
| OPPORTUNITIES |
THREATS |
• Markets with Natural Preference for Domestic
Sources - e.g. medical, defense, aerospace |
• Chinese Currency Not Revalued |
• China reduced export subsidies on many products
7/1/07 |
• Loss Of Proprietary Technology/Processes |
• Chinese costs are up in Yuan and the Yuan is up
moderately |
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