Managing the risks of counterfeiting in the information technology industry
As counterfeiting becomes one of the most challenging issues for the IT industry, with illegal replicas of brand name high technology products flooding the marketplace, AGMA and KPMG collaborated to reveal the threat of this growing activity and present working solutions. Despite the sophisticated design and complex manufacturing of most IT products, counterfeiting is a pervasive problem. As many as one in ten IT products sold may actually be counterfeit, according to interviews conducted with electronics industry executives. AGMA and KPMG estimate that about US$100 billion of global IT industry revenue is lost to counterfeiters annually. In addition, estimates by the International Chamber of Commerce suggest that counterfeit goods accounted for 6 percent of world trade in 2003, valued at US$456 billion. By reducing revenue and harming brand equity, counterfeiting IT and electronics products are eroding the integrity of the supply and demand business model. “Counterfeiting is one of the most significant threats to the free market,” says Richard Girgenti, partner in charge of the KPMG Forensic practice for the Americas. “It not only steals the value of intellectual capital, it stifles innovation and robs customers of the quality they expect from a brand.” The AGMA-KPMG whitepaper provides detailed insights into early warning signs that can signal when a company has a counterfeiting problem including: - sudden drop in raw-materials orders; increased orders for proprietary components; increased grey-market availability; increase in service returns; large volume of discounted products available. The whitepaper also offers anti-counterfeiting tactics that can bolster a holistic prevention, detection and response strategy. These tactics were identified by executives of leading high tech companies, including techniques pioneered by mature industries that are now being adopted by leading electronics companies. A copy of this whitepaper can be downloaded from http://www.agmaglobal.org/ICEWhitePaper_V5.pdf
•Date: 26th August 2005 • Region: US/World • Type:
Article •Topic: BC general |
