American Companies Losing The Most Business To Foreign Rivals

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The US has not been an important player in the TV manufacturing business for as long as most people can remember. Many of the goods sold by huge superstores such as Wal-Mart are made in China. The Big Three had more than 90% of the domestic car industry a half a century ago. Their share of the market fell below 50% in 2007 for the first time in history and continues to erode.  American-made apparel is almost as rare as American-made toys and American-made steel. It’s sad but true.

The US stopped being the world’s largest manufacturer starting in the 1960s. First, it was inexpensive goods like toys, then TVs, and then cars. The areas the US still dominated were in technology and services. But, most of the components of a product like the iPad are made outside the country. The invention may be “American Made,” but the product is not. Even a portion of the software and apps made for products like the iPad are developed outside the US.

A relatively small number of foreign companies have brought the giants of American industry to their knees over the past few decades – companies such as Toyota.  The Japanese automaker gained more share than any other company which operates in the American car market in the last twenty years. GM lost the most. But, GM had to contend with many rivals from Europe and Japan, each of which aimed products at niches in the US market.  Toyota does not deserve the credit alone for GM’s downfall.

The tales of most of the US companies that suffered large sales losses to foreign competitors involve poor management, or the inability to innovate quickly or buy valuable assets as they became available. It is not that simple. Almost every case discussed here is in an industry which is still changing. GM may have lost ground to Toyota. Now, each loses ground to South Korean firms Kia and Hyundai. China-based Acer was able to take sales from Dell because of the success of the netbook. Acer was early. U.S.-based Dell was late. By the time each was building netbook sales, Apple introduced a tablet PC–the iPad. The race course has been redrawn twice in less than four years.

These are eight stories of American companies which lost substantial market share to foreign rivals. There are cases where most of the sales loss came within the US itself. Other cases are ones where an American company with a large worldwide presence lost an important portion of its market share to a company based outside the US. The geographic expanse of the failure is often nowhere near as important as the effect of the financial loss. A company that has a 50% drop in sales will probably go out of business or be permanently crippled whether all of that loss came in Asia, Europe, or the US.

The lesson to be learned here is that the next big thing keeps coming year after year after year. That’s even true for the US company that just came out with it.