Looking For Breathing Room: Manufacturers In 2016 And Beyond

Our recent global survey about manufacturing points to one main truth: for manufacturers, it's currently all about growth. An astounding 97% of the survey respondents ranked "exploiting opportunities for growth" as either a medium, high, or extremely high priority—with 74% falling into the latter two categories. But as Doug Gates, KPMG's Global Chair of Industrial Manufacturing, points out: "everyone says they expect to grow their market share... yet there are no indications that the size of the market is going to increase dramatically." What that means is that even if there's a will, there may not be a way—for everyone.

Competition here, there, and everywhere

Some sectors seem particularly likely to bottleneck, points out KPMG Global Head of High Growth Markets Mark Barnes, because market experts foresee slow growth and pricing issues—the aerospace, defence, and automotive industries fall into this category.

The answer will be to start looking at new markets and adjacent sectors for growth opportunities. Indeed, 56% of the survey respondents report planning, to a "significant" degree, to enter new geographical markets in the next two years. In discussing expanding to new markets, Kim Metcalf-Kupres, VP and CMO of Johnson Controls, had the following to say: "China needs to be part of your strategic roadmap. Whether or not you are investing in China, the reality is that you will certainly be competing with China."

Leading manufacturers are preparing for these changes by making sure their business models are demand-driven and responsive, and reassessing the long-term market outlook and tweaking their business objectives accordingly.

Out with the old

Besides distancing themselves physically, manufacturers can also put some distance between themselves and their competitors by investing in new products and services. Nine in ten of our survey participants report "significantly" or "to...