Wednesday, May 27, 2009

Trend #2: Diversifying the Customer Base

Suppliers are diversifying their base for both survival and revenue growth. No longer can the supplier rely on a single primary customer as a source of growth. The auto industry has become too fluid; a string of acquisitions, mergers, and restructuring could leave a dedicated supplier in desperate straits before preventive action can be taken. Of equal importance, the supplier’s growth potential in the years ahead will more likely reside in the ability to provide innovative, integrated, and niche products to a variety of auto makers, rather than in reliance on expansion within an individual OEM’s production.

And finally, as suppliers go global to meet the needs of their customers, they will find it increasingly valuable to service not only the domestic companies that they originally followed, but also local manufacturers in these new nations, capitalizing on the security and additional revenue that true globalization can bring.

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