LONDON Size and scale are no advantage when it comes to overall financial success, according to a new study by Electronics Manufacturers industry analysts Plimsoll Publishing. It seems the industry's smaller players are putting their larger counterparts to shame when it comes to overall financial performance.
The study has looked at the industry's largest 250 companies and compared their financial performance with that of 1000 smaller UK Electronics Manufacturers competitors.
There is no doubting the dominance of these 250 “major players”- they currently control almost 94% of the market. Yet look beyond their size at their individual financial performance and their image appears somewhat staid.
Of the Top 250 companies profiled, 113 failed to increase sales beyond that of the industry average – dispelling the myth that they are capturing ever more market share – and 131 made less profit than the average industry performer – dispelling the myth that their monopolisation of the market has led to inflatedprofitability.
Plimsoll found that 102 are less efficient in their use of people while 83 are rated as being in financial danger.
Of the smaller 1000 companies profiled, 420 increased sales at over 1% last year proving that good growth ispossible in a stable market and 229 delivered over 8% pre-tax margins showing higher profitability isachievable irrespective of size.
With 133 delivering over £188,000 sales per employee which Plimsoll says proves that you do not need economies of scale to be efficient while 422 are rated as financially strong – proving that many of the industry's smaller companies are well managed businesses.