Say good-bye to business as usual The past few years have been some of the toughest in recent memory for the electronics industry. When the technology bubble burst, it left behind an intolerant and unforgiving market. Survivors of the bust have restructured -- some more successfully than others -- and are making long-term capital investments very cautiously, if at all. As the economy recovers, companies that have made severe cuts will need to make difficult decisions to position themselves for growth. Despite recent upturns in the industry, electronics companies will continue to face both unpredictable demand and unrelenting competition. Profit margins are still tight but can also vary greatly; though the industry average is only three percent, the range for the major players is between -16 and +21 percent. To pull away from the pack, electronics companies will have to think in broader terms than basic survival with slim margins and develop leading-edge practices that help them maneuver quickly and react dynamically to future booms and busts in the electronics market. In a recent study, IBM Institute for Business Value researchers interviewed 35 electronics executives from 20 major electronics firms and gathered insights from numerous discussions with clients and from financial analysis of various companies. They then assessed each company's performance to identify what made some firms industry front-runners and others followers. In what was possibly the most important survey finding, researchers found that no major company scored perfectly in their ability to both tap into opportunities afforded by an upbeat economy and remain prepared for unforeseen market challenges and threats. Even though the gap between the companies that scored best and worst in the assessment was, on average, a significant 11 percentage points in earnings before interest and taxes (EBIT), the front-runners still have a good distance to travel to reach the leading edge. To read the complete study, download the PDF file at the top of this page. | 
