WHITEFISH, MT / June 17, 2014 / With manufacturing data steadily on the up-tick and US industrial orders
across the board showing signs of a long-term, sustainable recovery
from the first decade of this century, there is meaningful optimism
among companies occupying the industrial supply sector in the US and
abroad. This optimism is being fueled by supply chain players of all
sizes and capacities who are executing on proven growth strategies
designed to leverage demand that continues to move in their direction.
Well-defined and executable business plans combined with intimate,
regional understanding of customer needs are vital tools for any measure
of success going forward. Here we discuss three examples of public
companies currently executing such strategies.
When Fastenal Company (NASDAQ: FAST) talks about who they are, the
message is not, "how big we are," but "how local we are." They’ve built
a following over the years by connecting with the hometown clientele’s
unique needs and requirements, catering to local contractors with needs
unique to the area within which they work.
When Bob Kierlin collected $30,000 from four friends in 1967 and opened a
1,000 sq. ft. shop in his hometown of Winona, MN, he originally thought
he would dispense nuts and bolts through custom vending machines.
After one too many technology snafus and several decades of focus and
good old fashioned hard work, Fastenal today finds itself as a leader in
what’s now viewed as popularized industrial vending. Surviving what
all startup companies experience in the way of business miscues en route
to growth and business success, Fastenal over time settled into its
niche by way of exceeding customer expectations and providing a level of
service that differentiated them from their competitors. Kierlin
hitched his wagon to the motto, "Growth Through Customer Service." Put
another way, the message here is that they achieve success through
knowing their customer. The motto remains the company’s reference point
to this day.
This motto has guided the company forward as it has grown from a small
regional supplier into a global growth company. Two thousand and six
hundred stores later, the company continues to grow and expand its
retail footprint. Fastenal continues to aggressively invest in things
that make a difference for its customers such as, but not limited to,
employing a stringent quality management system anchored by engineering
teams and testing laboratories around the world. Fastenal stock price
has risen 197% in the last five years, and has been one of the overall top-performing stocks
since the market crash of 1987.
Sterling Consolidated Corp.
Sterling Consolidated Corp. (OTCQB: STCC) supplies hydraulic and
pneumatic seals to a variety of industries, including automotive, oil
and energy, machinery and packaging. The company employs a growth
strategy primarily focused on consolidating about 100 highly profitable,
small distributors they do business with in the U.S. These distributors
represent a large piece of the market and, unlike Sterling, often
specialize in only certain types of rubber or certain industries. Many
of these smaller operations, generating between $500k to $5M in sales,
have been in the game for several decades and are now looking to end
their time in the business. Sterling's strategy is to acquire and
streamline these businesses with the latest technology in order to
maximize efficiency and effectively address a target-rich environment.
This approach is in stark contrast to that of the traditional,
impersonal, behemoth-sized companies in this sector. Building upon an
impressive track record of consistent profitability over the last four
decades, Sterling sees its aggressive acquisition model as being key to
its growth. Not to be confused with the often failed strategy of growth
for growth sake, employees at Sterling’s acquired companies realize
better benefits, a higher level of administrative, operational
efficiency and enhanced overall healthcare coverage. In a day where
many smaller businesses are seeing healthcare benefits erode, Sterling’s
presence is making a noticeable, positive difference.
Another Sterling differentiator is its regional footprint approach
combined with its specific O-Ring product line focus. With sales in
this industry being mostly regional in nature, the company's western
Pennsylvania location, R.G. Sales, is a case in point as its customer
base consists largely of miners. By catering to the needs of specific
markets, Sterling delivers expertise not readily available from its
competitors. This underlying regional approach exists in numerous other
markets, driven and reinforced by logistical constraints as well as
product mix concentration due to serving a local customer base, making
Sterling's strategy worth taking special note of. Another example
exists within their North Carolina operation, where the customer base is
mostly automotive. Through its largest subsidiary, Sterling Seal and
Supply, and wholly-owned freight forwarding subsidiary, Integrity Cargo,
LLC, the company’s understanding of customer needs far outweighs in
value what any low price/high volume competitor can hope to offer.
Though the company has been around for more than 40 years, it only
recently became public (in 2013). The high-growth acquisition plan,
coupled with the localized focus, offer significant potential for
Sterling as it expands its industrial supply footprint.
Click here to receive free updates on Sterling Consolidated developments: http://www.tdmfinancial.com/emailassets/stcc/stcc_landing.php
Snap-on Inc. (NYSE: SNA) is a global manufacturer and marketer of tools,
equipment, diagnostics, repair information and systems solutions for
professional users performing critical tasks. The company understands
that without local knowledge of tooling and application needs, it would
stand without distinction among the hundreds of other tool
manufacturers. SNA’s mobile tool vendors represented in
franchised-owned, Snap-On trucks are ever-present on today’s roadway
systems supporting tool users on a first name basis where they live and
Products and services include hand and power tools, tool storage,
diagnostics software, information and management systems, shop equipment
and other solutions for vehicle dealerships and repair centers, as well
as for customers in aviation and aerospace, agriculture, construction,
government and military, mining, natural resources, power generation and
technical education. Founded in 1920, Snap-on is a $3.1 billion,
S&P 500 company headquartered in Kenosha, Wisconsin. Over the last
five years, Snap-On stock has appreciated 299%.
In summary, the companies who are realizing robust growth numbers in
today’s economy are those mining and embracing the unique, local needs
of their customers. With the supplier network being more global in
nature than ever and choices to fill need growing every day, the one
aspect that differentiates one supplier to the next is its ability to
identify and meet the need of its customer in the most precise and
accurate way possible. Companies more than ever before are realizing the
importance of simply asking the customer what they want and then of
course listening to what they have to say.
Except for the historical information presented
herein, matters discussed in this release contain forward-looking
statements that are subject to certain risks and uncertainties that
could cause actual results to differ materially from any future results,
performance or achievements expressed or implied by such statements.
Emerging Growth LLC is not registered with any financial or securities
regulatory authority, and does not provide nor claims to provide
investment advice or recommendations to readers of this
release. Emerging Growth LLC may from time to time have a position in
the securities mentioned herein and may increase or decrease such
positions without notice. For making specific investment decisions,
readers should seek their own advice. Emerging Growth LLC may be
compensated for its services in the form of cash-based compensation or
equity securities in the companies it writes about, or a combination of
the two. For full disclosure please visit: http://secfilings.com/Disclaimer.aspx
SOURCE: Emerging Growth LLC
Leave a comment...