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66 SMT Magazine • December 2016 by Susan Mucha POWELL-MUCHA CONSULTING INC. Decades ago, executives in the Tier One seg- ment of the electronics manufacturing servic- es industry were predicting that the industry would consolidate into two or three big play- ers. While merger and acquisition activity helps keep names changing in the top 10 EMS pro- viders, the consolidation down to a handful of companies hasn't happened. There are two big reasons. First, market en- try and business growth is still primarily con- trolled by original equipment manufacturers (OEMs). That severe an industry consolidation would limit their options and ultimately in- crease pricing, so they source business in ways that always keeps diversity in Tier One and op- tions in the lower tiers. Second, the range of support needs varies widely within the mar- ket in terms of capabilities, response speed, de- mand frequency, product size and preferred lot size. This opens the door to multiple tiers of ser- vice providers specializing in different region- al and industry market segments. This diversity of business models also drives diversity in sales and marketing strategy. To better illustrate some of the differences, this article looks at four different EMS compa- nies in the global and regional space. I've con- sciously focused on companies outside of Tier One, because while Tier One reflects the largest share of the market in terms of total revenue, the sheer size of these players drives their sales and marketing strategies in ways different from what is typically found in the far larger number of companies in the lower tiers. Generally, every EMS companies' core mar- keting value propositions aligns in some way with one or more of the bullets on the list below: • Access to shared manufacturing capacity at a fraction of the cost of in-house capacity • Ability to level load internal production capability • Improved financial inventory turns as product may be generating revenue before invoice is paid • Access to wider range of expertise • Access to lower cost labor markets • Access to specific manufacturing technology EMS Industry Sales and Marketing: Why Strategies Vary Widely FEATURE