Positioning for opportunity | KPMG | BE

Positioning for opportunity

Positioning for opportunity

While companies look to global markets to leverage opportunities, mergers and acquisitions feature on the agenda of nearly a third of our respondents; this number jumps to 47 percent for larger companies(US $5 billion and over).

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Positioning for opportunity

“Large A&D players were 30 percent more likely than the industry average to say they would be cutting back or delaying planned investments and almost 10 percent more likely to say they would exit unprofitable product lines in the next two years. Some may say this is simply a `hunker down’ mentality; others would suggest these organizations are focused on trimming fat and growing their core business to prepare for the future. ”

- Doug Gates, KPMG Global Head of Aerospace and Defense

Indeed, only 16 percent of companies are not considering any transaction activity - a low level compared to past years.

Forty-four percent of larger companies say they will invest in Greenfield projects to increase capacity in growth markets. Companies are also using transaction activity to rationalize operations: over a third say they will divest noncore assets or activities in the next two years. Companies have also recognized the need to reassess their current operations as four in ten respondents say their cost-control priorities over the next two years consist of exiting unprofitable or non-core product lines and business units.

As companies look to maintaining—and widening—their global footprint, it will become even more critical to ensure that their operations are efficient and minimize waste. This report finds that companies have many opportunities to make significant improvements in these areas.

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