Emerson Electric US: Analysis on Innovation & Leadership in the US
"Emerson in its domestic market of US has a well diversified product/service portfolio. The company offers a host of products and services for process management, network power, climate technologies, storage solutions, and industrial tools, among others. Its process management solutions include engineering services and precision tools for applications in oil refining, pulp/paper, pharmaceuticals, sewage treatment, community water supplies, or beverages. Its Industrial automation solutions find applications in bulk manufacturing services including motors, power fluid, transmissions, material joiners and other such equipment. Its network automation provide precision cooling, power systems and service operations for computers, data centres, telecommunication systems, security systems, and other sensitive equipment protecting them from power surges, blackouts, overheating, or freezing. The diversified product/service portfolio mitigates the risks arising out of any particular industry.
The company's operating margin growth was 13.68% for the fiscal year 2010. The company's compounded annual growth rate (CAGR) for revenue was 1.61% during 2006-2010. It generates a significant amount of revenue from the US region, which could have an adverse impact on its business operations. In 2010, the company generated 43.26% of its total revenue from the US. The global electronic manufacturing services (EMS) industry, in which the company operates, has been growing rapidly with better prospects for future growth. According to Analysts, the global market for EMS is projected to reach $435 billion by 2013. The market is likely to be driven by strong demand for electronic assembly services, which is expected to exceed $1.2 trillion by 2013.
In January 2011, Emerson completed the acquisition of Turbine Control Service Associates, Inc, a provider of generator excitation control systems for power plants. The acquisition enables Emerson to expand the breadth and depth of Emerson Process Management's product portfolio for the global power generation market. In October 2010, the company received a contract to supply power inverters and plant-wide controls from Quanta Services, Inc. (Quanta Services) for the zero-emission solar projects in Kings County, California. Further, in 2010, the company entered into a definitive agreement to acquire Avocent Corporation, a leader in delivering information technology operations management solutions for USD 1.2 billion. The Economic conditions of the US region are not favourable, which could affect the company's operations. The over dependence on a particular region could increase the risk of the company. If the business environment of the region turns adverse or the demand declines, then it will have an adverse affect on the operations of the company."