- Thème:Commercial due diligence (CDD)
- Secteur:Industrial products
Issue
AMR’s client was an acquisitive international textiles group with interests in a number of product markets. As part of a European acquisition, the client asked AMR to investigate the Asian market for a particular type of technical textile, and to evaluate the potential threat for the company it was bidding for.
Approach
AMR analysed the relevant markets in China, India and Korea, and quantified the level of domestic production, consumption, imports and exports. AMR drew on published international trade data, backed up by interviews with over 40 manufacturers in the region. AMR showed that the majority of Chinese production was for export, primarily to North America. AMR also obtained pricing information from manufacturers in China, the US and Europe.
Recommendations
AMR showed that although Chinese manufacturers were price competitive and export-focused, they faced significant quality and logistical barriers when selling to the European market compared to the US, which they had successfully penetrated. Therefore while US domestic production had largely disappeared, in Europe it was far more secure.
Result
As well as giving our client confidence on the target company’s position in the European market, our research had the added benefit of identifying a list of potential cooperation partners in the Chinese market.
Insight from AMR’s research
The US market evolved differently from Europe because of lower quality standards and the existence of independent importers and wholesalers. In Europe the market is more quality-oriented and manufacturers control distribution and logistics to a much greater extent.