36
SWOT ANALYSIS
STRENGTHS
WEAKNESSES
OPPORTUNITIES
THREATS
Growth of manufacturing and directly related
sectors such as automotive and aerospace
Reshoring – bringing more manufacturing
production back to the UK
Lack of availability of bank funding
Fund concentration on one specific sub sector
of engineering – lack of diversification
Embedded supplier/customer
relationships constitute valuable
and under exploited asset
Large and growing number of target Precision
Engineering companies with low valuations
suitable for new investment and restructuring
The market is young in terms of smaller
investors and there are a limited number
of investments available to them – lack of
competition
No guarantee of interested third parties to
acquire the asset at the desired price (Precision
Engineering companies) and facilitate investor
exit at expected level
The UK’s reputation for excellence
in Precision Engineering, as well as
political support and goodwill for
the sector
Strong government support in the form
of grants and eligibility for state aid and
qualification for incentivised investment
schemes
Difficult market for the poorly
advised amateur – problematic to
access information and understand
market nuances and technicalities
Skilled labour shortage – potential to
restrict growth because of difficulty of
employing staff qualified to undertake
the work
Potential for significant capital growth
with the right investment at the right
price and the right management
Evidence that aggregating smaller companies
into a single entity to be sold at a higher
premium can be a successful strategy
Private investors have only recently
started to become aware of the market
Deterioration of general market
conditions which directly impact
customers – i.e. manufacturers and as a
result, Precision Engineering suppliers
Barriers to entry (cost of setup, required
skills, embedded supplier/customer
relationships) making the threat of
increased competition less likely
Precision Engineering investment
market has recently been opened up
to a new class of smaller investors
Lack of single index for easy reference to
data and deals thus far mostly private,
with little detail about performance
Exit of UK from European Union
leading to trade tariffs, additional
costs and other trading difficulties
affecting competitiveness of UK
industry
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