Solectron - The invisible multinational
Solectron is the multinational you've almost certainly never heard of.
If, however, you own a mobile phone, a video games console or a digital television receiver, there's a pretty good chance it was made by Solectron.
The California-based company is an invisible giant. With sales of around $12 billion a year, and employing 70,000 people in 23 countries, it manufactures high-tech products for big brand-name owners like Dutch electronics company Philips, as well as a lot of others firms who would prefer that their names were not divulged.
Why does Solectron maintain this air of secrecy?
In the highly competitive electronics and technology sectors, brand owners are often unwilling to take on the risk of building the factories and hiring the workers needed to make their products. Instead, they pay companies like Solectron to do it for them.
It is a way of sharing the cost of capital investment. It also means that brand owners often do not manufacture the products they sell, a fact they are not usually keen to publicise.
Solectron used to be the world leader in what it calls "manufacturing services", which includes making, packaging and distributing goods for brand owners. But now the firm is losing money.
The reason for its slumping economic performance is that demand for its products collapsed during the recent global downturn. Meanwhile its rivals, like Hong Kong based Flextronics, have arguably been quicker in adapting to tougher conditions.
Solectron now faces a daunting prospect. It operates in a competitive business where consumers expect electronics goods to get cheaper and more sophisticated every year. If it is to survive, it needs to evolve and find new ways to generate income.
It has done this before - the name Solectron derives from its origins in 1977 making control equipment for solar panels. Over the year, it then evolved into a contract manufacturer for a wide range of technology products.
Solectron must now again manage to successfully modify its business if it is to continue trading.
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