When a market becomes overly consolidated, one or several companies hold power and can stamp out competition while overcharging and harming consumers. For now, the U.S. pro-AV integration is far from that level of consolidation, as AVIXA's research found that the market has low concentration. Hundreds of businesses of all different sizes are successfully operating in this market. Much of the industry remains somewhat mom-and-pop in nature, and AVIXA's data strongly indicates there will still be space for those who want to remain independent. But the global business world is constantly changing, so there isn't a guarantee that the current state of pro AV will continue.
"In any marketplace, your ability to set your business apart from your competitors is a top driver of success," said Peter Hansen, Economic Analyst, AVIXA. "Maybe you're the highest-quality integrator in your state, or perhaps the only all-in-one AV and IT solution source in your city. M&A can be the most effective way to attain this sort of profit-winning niche. Business leaders should watch for opportunities to differentiate their companies and stay current with trends to make sure they aren't falling behind."
Many factors are driving M&A activity in the pro-AV world. Globalization and wider market consolidation play a role, as multinational companies want pro-AV integrators that can install coordinated solutions in all their offices worldwide. Industry maturation is an aspect, too, as certain products win out and their manufacturers grow and snap up smaller competitors. Diversification - the best hedge against economic fluctuations - is another leading motivation, as businesses expand into other regions, markets, and solution areas through acquisitions.
With high M&A activity, businesses should be prepared to make and receive offers. It's important for business leaders to assess the value of their companies, their competitors, and their partners throughout the industry.
The quarterly META reports look at how macroeconomic trends - economic, sociological, political, demographic, and technological changes - affect the pro-AV space. To learn more, visit www.avixa.org/META.