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What Separates Market-Driven Distributors from the Competition

Written by Mike Marks on Friday, 07 October 2016. Posted in Distribution

One distinction stands above all others in separating market-driven distribution companies from the competition: They set internal priorities based on an external, market perspective. This requires the confidence to define your own direction and the discipline to avoid the trap of generic “best practices.”

After all, a strength is only a strength if it provides value to a target customer. If your customers are industrial production facilities buying flawless logistics to support 100% uptime, technical expertise is not a strength, even if every single rep in your company holds a PhD in engineering.

In today’s hyper-competitive environment the only way to create shareholder value is by providing authentic customer value. There are no shortcuts. If you can solve their problems and provide the important things better than anyone else, you are in a position to sustain high profitability for a long time. If you don’t, you may be able to temporarily gain higher margins by cutting service or secretly raising prices. But, sooner or later, they will recognize the disconnect between cost and value, and defect to your competitors.

Read more about the key drivers for shareholder value.

 

About the Author

Mike Marks

Mike Marks

Mike Marks co-founded IRCG in April 1987. He began his consulting practice after working in distribution management for more than 20 years. Over the years, his narrow focus in B2B channel-driven markets has created an extensive number of deep executive relationships within virtually every business vertical in construction, industrial, OEM, agricultural, and healthcare.

Mike has led project teams that improve market access by aligning resources to growth opportunities serving manufacturers, dealers, and distributors. Clients have ranged from small privately owned firms to many of the industry’s market share leaders. Ownership structures have included owner-operators, private equity, ESOPs, and publically traded firms. Mike is proud of the teams work and the confidence clients have shown with additional project work.

He has written extensively, and is frequently quoted on many industry issues. He has substantial board experience on both public and private distribution firms. His contributions to the field include serving multiple terms as a Research Fellow with the National Association of Wholesaler-Distributors, permanent faculty at Purdue University’s University of Industrial Distribution, eight years as Graduate Adjunct Faculty in the Industrial Distribution Program at Texas A & M University, and rendering several precedent-setting expert opinions in contract disputes between manufacturers and distributors.

Prior to forming IRCG, Mike held the position of Executive Vice President at Lex Electronics, an $800 million vertically integrated electronics distributor in Stamford, CT. Mike’s path to management in his early career was through increasing responsibilities in sales and sales management. He also completed a tour of duty as a manufacturer’s representative.

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