Recent price drops in LED light bulbs may radically change the US lighting market, currently split between older incandescent and halogen bulbs and energy saving CFL and LED bulbs. The Environmental Protection Agency in the US recently changed its energy star definitions for light bulbs and LEDs fall under the new category. This rating will likely make LED prices drop by as much as 50 percent. These price drops, combined with low energy consumption of the bulbs, means the future of LEDs look very optimistic.
Although Tikkurila ranks relatively low in the global home paint market, the company has built a strong presence in Eastern and Northern Europe, alongside recent expansion in the Baltic and Balkan regions. With reduced demand and higher raw material costs challenging revenue growth in several of its markets, Tikkurila is pursuing a number of strategies to strengthen its present position and leverage a strong local reputation to prevent encroachment from larger global competitors.
Analyst Insight by Damian Shore, Contributing Analyst
Having been spun off by Siemens in early July 2013, the management of Osram Licht AG
now has greater flexibility to make the changes it deems necessary to
shift the company’s focus towards the rapidly expanding LED
(light-emitting diode) lighting category.
A burning platform
Osram is the world’s second largest lighting company after Philips
but has seen its share of the global light sources category decline
sharply in recent years, from 10.8% to 9.6% between 2009 and 2012. This
category was worth US$22.6 billion in 2012, with real annual value sales
declining by 2.9% between 2007 and 2009 before recovering strongly to
grow by 11.3% between 2009 and 2012.
Like mobile phone maker Nokia, Osram is clearly standing on a
“burning platform” as a result of technological development and needs to
adapt rapidly if it wants to avoid being marginalised in a similar
manner to the likes of Kodak in the photography market.
Managerial flexibility key to a successful transition
Such transitions are notoriously difficult to pull off as they
require ripping up established business models, something that is
difficult to do amid a conservative management structure with layers of
bureaucracy and entrenched (and often competing) interests. In this
regard, the spin-off makes sense. Osram has already initiated a major
reorganisation that is intended to prepare for the ongoing transition
from conventional to solid-state lighting (SSL) technology based on LED.
It currently employs around 40,000 people worldwide but is seeking to
cut this number by around a fifth and reduce the number of manufacturing
sites it operates from 43 to 33 in order to realise annual cost savings
of almost US$1 billion.
It has already made significant progress. According to Osram,
LED-based products already account for more than a quarter of its
revenue, with that proportion set to grow rapidly. The company
manufactures LED chips at production facilities in Regensburg, Germany
and Penang in Malaysia. Osram has taken another positive step by
settling a number of patent disputes with South Korean rival Samsung in
late 2012. This leaves Osram’s management with fewer distractions as it
seeks to manage a very difficult and ambitious transition process.
Ending legal wrangles a positive
The smaller, leaner and more flexible Osram that is gradually nudging
its way out of its chrysalis is likely to have a much better chance to
survive and thrive in the long term than a unit of a conglomerate like
Siemens. Facing fierce price competition in the LED category,
particularly in Asia, Osram is losing money and its future is on a knife
edge, with inertia at this point likely to prove fatal.
While the company’s future remains uncertain in a market undergoing a
swift and brutal transition, it has at least nudged the odds more in
its favour. Moreover, the potential rewards are great, with real growth
of 21.7% forecast in the global light sources category over 2012-2017 as
LED technology becomes increasingly mainstream.
is the global leader in the light sources market, accounting for more
than 12% of value sales in 2012. The company, however, failed to get the
top spot in three key markets: the US, Germany and Japan. In all three
countries, local companies General Electric, Siemens/Osram and
Panasonic, respectively, were the best-selling manufacturers.
After Sherwin Williams’ initial purchase of Comex at the end of 2012, the acquisition was considered complete until the Federal Competition Commission in Mexico blocked the purchase. Sherwin Williams continued with its acquisitions of Comex in the United States and Canada, where regulatory commissions approved the sale. The future of the acquisition in Mexico is still uncertain, and Cruz del Barrio, Head of Home and Garden Research at Euromonitor, states that Sherwin Williams will likely have to compromise to move forward with the acquisition.
La adquisición de Comex por parte de Sherwin-Williams se ha convertido en una novela por entregas. Aunque la compra se anunció a finales del 2012, en julio el regulador mexicano frenó la operación. Pero dado que tanto en EE. UU. como en Canadá había sido aprobada, S-W finalizó la compra de todas las tiendas y fábricas en ambos países en septiembre. S-W tendrá que hacer ciertas concesiones para completar la compra de Comex, posiblemente la venta de una parte de la red de negocios en México.
Legislation (or the lack of it) banning sales of incandescent bulbs will be a key driver of the light sources market over the next five years. In countries where a ban is already in place, retailers backing LED rather than CFL bulbs will also play an important role, with increasing competition already bringing unit prices down to make LED bulbs more accessible to consumers.
Company Natuzzi historically focuses on quality, a strategy that has led to
long term success but also recent difficulties in the wake of the global
economic recession. There is speculation the company is considering relocating
to China, and although the company denies this, a move could have negative
connotations for the company that touts “made in Italy,” a title often
associated with world renowned quality.
Natuzzi ha sempre puntato sulla qualità, strategia che ha determinato il lungo successo ma anche le recenti difficoltà finanziarie della società. Alcuni esperti ritengono che Natuzzi stia considerando di delocalizzare in Cina, decisione mai confermata dalla compagnia. Se questa strategia venisse implementata potrebbe seriamente compromettere l’immagine dei prodotti Natuzzi in quanto il made in Italy, sinomino di qualità in tutto il mondo, rappresenta la forza della compagnia, spiega Fabrizio D’Alete, analista presso Euromonitor International.