Product & Service Mix
Molex Incorporated is a global manufacturer of electronic, electrical and fiber optic interconnect systems. The company manufactures components for original equipment manufacturers (OEMs) in industries such as automotive, business equipment, computer, computer peripherals, consumer products, industrial equipment, premise wiring and telecommunications.
Molex was established in 1938 as a manufacturer of toy submarines and flowerpots. The firm originally used a plastic regrind material called Molex to produce its components and products. In the 1940s, the company began to develop interconnect products for the appliance market in the American Midwest. From then on, Molex has focused on creating components for the electronics industry.
In January of 2009, Molex entered the light-emitting diode (LED) market, launching its Solid State Lighting (SSL) business unit. Through this effort, the company has developed the Transcend™ Lighting Series, a fully-integrated LED module for lighting fixture OEMs. The modules are interchangeable, which allows lighting fixture manufacturers to convert their existing fixture designs to LEDs, as well as adapt future fixtures as LED technology continues to advance.
Michael Picini, vice president of Molex’s Solid State Lighting business unit, describes that the company’s recent entry into the LED industry was a natural evolution:
"Molex has a long history of providing electronic solutions to customers in many industries. Over the years, we have been able to leverage our expertise in innovative design and development into new industries including telecommunications, industrial, aviation and medical. This entry into lighting is a natural extension of our innovative design, development and customized service for our customers. It also further demonstrates our unique ability to engage in smart partnerships with industry leaders."
Company Location Logic
The company’s global headquarters is based in Lisle, Illinois, Molex has 43 manufacturing locations across 18 countries. Brian Krause, vice president of marketing and communications at Molex, discusses the company’s local roots and global reach:
"Molex originated in Midwest because our founders were from the greater Chicago area. Although we’re headquarterd in Lisle, Ill., we’re truly a global company. From our humble Midwest beginnings in the appliance industry has grown a multi-billion dollar global electronics company."
Company Size & Structure
Molex has approximately 25,240 employees across the globe, and reported $2.6 billion in net revenue in FY2009. The firm’s engineering, development, and manufacturing capabilities are organized into three product divisions: Commercial Products, Micro Products, and Integrated Products. The company’s Global Sales and Marketing division services all three product divisions.
Relationships with Partners in the Value Chain
The research and development of the company’s lighting modules is carried out in Illinois. Picini notes that Molex manufactures the components in Shanghai, “where the technology already exists and [where] they have high-volume capabilities.” Molex partnered with Seoul Semiconductor in 2008 to produce its lighting modules for Seoul Semiconductor’s LEDs.
In May 2009, Molex entered into a strategic alliance with Leviton Manufacturing Company, Inc., a New York based manufacturer of electrical wiring devices for OEM lighting fixture customers. Through the alliance, Leviton distributes and sells Molex’s lighting components to manufacturers of commercial, industrial, and residential lighting fixtures in North America.
Molex is currently focused on growth. While the company is evaluating the markets to determine on which segments to focus, Molex plans to continue investing in new industries such as LEDs. Krause highlights Molex’s strategy for coming back strongly from the economic downturn:
"While this was one of the worst recessions our industry has seen, Molex historically has emerged from such periods faster than our competition because of our financial strength, our focus on reinvesting in new products and technology, and our ability to win industry standards."
Top Opportunities for Future Growth
As the public becomes more environmentally concerned, and as governments accelerate their environmental efforts, Picini believes that Molex’s lighting business unit will grow:
"Eco-consciousness around the globe is a good thing. With more and more local and state governments and municipalities striving to become more environmentally conscious, we see more opportunities for the growth of the Solid State Lighting business unit."
Top Requirements to Capitalize on Opportunities
Picini emphasizes that the direction toward industry standards for LEDs is essential for the industry to flourish:
"More standardization in the industry will benefit companies such as Molex, and also lighting fixture manufacturers. Currently, LED implementation is more of a custom execution. Standardization would make it much easier to use more products in more applications."
This case study was prepared by Collaborative Economics for Environmental Defense Fund.
Posted: 24-Nov-2009; Updated: 17-Feb-2009