Manpower Complements China's Revamp - Analyst Blog
08 Giugno 2011 - 12:15PM
Zacks
In an attempt to penetrate deeper
and solidify its operational roots in China, Manpower
Inc. (MAN), one of the leading employment services
provider, recently announced the acquisition of Xi'an Fesco, a
leading human capital contributor having 10,000 associates in
Shaanxi Province.
The buyout was in line with the
company’s farsighted strategy of nurturing and supporting China's
industrial employees, thus helping in revamping its industrial
zones and stretching its business into new domestic hubs.
Further, as the manufacturing
output in China is touching new heights, the acquisition is highly
accretive to the ManpowerGroup as it positions the company as the
dominant leader in providing pioneering workforce solutions into
the new and flourishing domestic regions.
Going with its extensive strategy,
Manpower entered into a partnership with the City of Kaifeng in
Henan Province, thus gaining access to the millions of workforce in
North Central China. The move not only broadens Manpower's position
in China but also places it among the country's largest provider of
pioneering staff solutions, starting from administrative or
managerial hunt and recruitment process outsourcing (RPO) to
outsized recruitments and short-term staffing.
Current scenario reflects that
China is having a dearth of trained workforce with the right
technical skills for its five-year-plan which includes
infrastructure development in the inland regions. Moreover, China’s
total industrial output is forecasted at $1.8 trillion, making the
manufactures and producers the key drivers of China's economy.
Hence, Manpower’s strategy is
developed in tandem with the China's five-year plan, in which
Manpower will facilitate the momentous repositioning of the sector
by providing the required human capital.
Moreover, ManpowerGroup also
entered into a partnership with China's Ministry of Industry &
Information Technology (MIIT), an important landmark in the
company’s China operations, for developing a talent exchange
center, helping its partners to provide a wide-range of workforce
solutions that falls in line not only with the policies of single
manufacturers but also with China's manufacturing growth
projections.
Founded in 1948 and headquartered
in Milwaukee, Wisconsin, Manpower is the global leader in
employment services industry and commands a well-established
network of nearly 3,900 offices in 80 countries.
Manpower’s comprehensive range of
services makes the company a true global staffing firm. The company
provides services to the entire employment and business cycle
including permanent, temporary and contract recruitment, employee
assessment and selection, training, outplacement, outsourcing and
consulting.
Further, the company’s brand value
and strong global network provide a competitive advantage to the
company and reinforces its dominant position in the market.
Moreover, Manpower benefits from growth prospects in under
penetrated staffing markets of Italy, Germanyand the Nordic region,
and has significant operations in high-growth emerging markets of
India, Chinaand Eastern Europe. Consequently, the company has a
strong upside potential.
However, the employment services
industry is highly competitive with limited barriers to entry, and
Manpower faces stiff competition in both domestic and international
markets from other established players, such as
Randstad (RAND.AS) and Kelly Services
Inc. (KELYA). An intense competition may limit the
company’s market share and profitability.
After evaluating the pros &
cons, we prefer to maintain a long-term ‘Neutral’ recommendation on
the stock. Moreover, Manpower holds a Zacks #1 Rank, which
translates into a short-term ‘Strong Buy’ rating.
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MANPOWER INC WI (MAN): Free Stock Analysis Report
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