In a recent announcement Simmtronics, the world’s third leading PC tablet manufacturer, and Jumbo Electronics, the leading distributor and retailer of IT and consumer electronics in the United Arab Emirates (UAE), have formed a strategic alliance to distribute PC tablets throughout the Gulf Cooperation Council (GCC). Simmtronics’ motivation for penning the deal is an effort to remain true to its commitment to expand in to as many new markets as possible.
According to Chris Ruggeri, M&A services leader at Deloitte Financial Advisory Services, the recent decline in M&A activity is due to economic uncertainty in the euro zone, new regulations in the US and slowing growth in emerging markets. As a less risky means of fusing the benefits of separate entities, the trend towards strategic alliances is continuing to become increasingly popular among CFOs.
After the Simmtronics, Jumbo agreement was signed the Managing Director of Simmtronics, Indrajit Sabharwal, was quoted as saying,
“The UAE has been one of our important markets and our agreement with Jumbo continues our expansion in as many new markets as possible,”
As the exclusive UAE distributor of Sony and a trusted distributor of many leading global electronic brands, Jumbo’s market position coupled with Simmtronics’ position as the original equipment manufacturer of PC tablets for industry giants like Acer, LG Electronics and IBM should help to maintain Jumbo’s commitment to price uniformity throughout the price-sensitive region.
This announcement comes on the heels of Simmtronics’ $10 million deal to produce high-end PC tablets for three Middle-East based companies-the deal was aided by the Jumbo alliance.
A well thought out business alliance can provide several benefits to a company, as is evident in the Simmtronics, Jumbo agreement. Access to emerging markets while avoiding the political obstacles sometimes faced by companies trying to access foreign consumers is one of the benefits of strategic alliances. The right alliance can increase a company’s revenue while strengthening their brand value.
If you are looking for a partnering solution that compliments your corporate strategy while providing an opportunity for accelerated global revenue growth contact us.
— by George Tyler