US Industrial Suppliers Use Local Approach to Fuel Growth


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OTC:BB:STCC / NASDAQ:FAST / NYSE:SNA
06/17/2014 [ACCESSWIRE] 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.

Fastenal

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 Incorporated

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 work.

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%.

Summary

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.

Disclaimer:

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 

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