Part II: Don’t be a snail.
Last month I began a series of columns dedicated to stimulating your thinking of ways to strengthen and grow your wood products manufacturing business in the midst of a rapidly changing world. I began with the fact that some consumers are going to shop price only, usually resulting in buying low-cost imports. I then challenged you to determine who your target customers are today, who you want for customers tomorrow and what they will require if they purchase the products and services you provide. I also highlighted the opportunities, now and in the future, for exporting U.S. wood products and encouraged you to start thinking global.
Thus, a formula for success includes targeting customers [in the United States or anywhere in the world] who share similar requirements and to design your products and services to meet those needs. However, it is critical that you do this while being careful not to lose the focus of your company and thus stray from your core competencies.
You must ask yourself the critical question I posed at the end of my July column if you are to maintain or grow market share: “Why would anyone want to buy my wood products instead of someone else’s?”
Why They’ll Buy Yours
When I ask this question of a client, the most common answer relates to the excellent quality of his product and the high level of service and excellent reputation. While this may be true, it is a weak and inadequate answer at best because some or all of your competitors can boast the same. None of them are going to have poor quality and service and be around very long. As I mentioned above and last month, the answer to this question has to be more specific and detailed, and actually depends on the customer requirements of your target market. Does that sound too simplistic? Sometimes the simple is the profound — I will buy your product if it meets my requirements but, if your product is too generic or out of touch with today’s trends, I will go elsewhere to buy what I want.
Even if you are in the budget market, the customers who shop your products have their own specific tastes and preferences. Everyone does. The challenge is to research these customer preferences and pick out those issues that are most common, and that you recognize as differentiating attributes that can give you a competitive advantage. You probably cannot or do not know how to include these differentiators now and likely will have to learn how and change the way you do things today. Yes, you will have to embark on that dreaded course of change that [of necessity] is a frequent topic of this column.
Some consumers are going to want ergonomically designed and engineered products, while others want ecologically correct products or green products. Some will want to take it home with them, while others are willing to wait months for it to be manufactured to their exacting specifications. Some wood products manufacturers may want to outsource to you so they can get genuine Appalachian red oak components with super-quick delivery. Other emerging middle class customers may want wood products “Made in America,” but customized to their fancy.
Make what you do best, but the way the customers want it. Again, be careful not to stray from your core competency. You cannot be all things to all people but rather be focused on a niche you can profitably manage. I hope you have gotten the point that you must meet your customers’ requirements in order for them to want your products. You must hit their hot button — here or anywhere on this planet. If you can offer them a bonus they did not think they could afford — so much the better.
Don’t Be a Snail
It seems that every time you pick up an industry periodical there is something about green on the cover. The reason is simple. The wood products industry is finally getting the point that the market is serious about this issue. Ten years ago it was a tree-hugger’s cause — a wacko environmental movement. At the beginning of this decade I began warning clients of the impending demand for certified wood products. Back then, the Europeans were already into a “Green Movement.” Here in the United States, Home Depot, Lowes and others were already looking for sources of these materials as part of an overall strategy to go green. Meanwhile, federal and state bureaucracies were requiring green materials to be used in renovations or the construction of new buildings.
The biggest beef I have had with our industry is its reluctance to change. I have been in the industry since my days at N.C. State University, during 1960-1964, and have seen industry leaders, with a few rare exceptions, move like snails when it came to embracing new ideas and trends. We have never been world leaders in this industry and that is because we have moved so slowly. We never attained the label of innovators — the attribute that defines industrial leadership.
A relevant example today is incorporating green into your growth strategy as one very serious option that you had better consider. This trend to green has been too long ignored throughout our supply chain; and every “snailish” company that continues to ignore the issue will miss an opportunity to grow and is at risk of losing market share.
Why would anyone want to buy your product if you are still making and marketing goods and services like you did 10 years ago? The reality is that fewer will want to today. New consumers have entered the workforce and gained enough purchasing power to demand products and services as they perceive they should be. Every reader must analyze his or her company in light of the 21st century world and develop a revised business plan to meet this new world head on.
If it is difficult for you to understand or believe the necessity of this, read a book like Fareed Zakaria’s The Post American World and attend seminars and meetings, like the Green Summit to be held in Indianapolis in October that is sponsored by Purdue University and Wood & Wood Products magazine. Hopefully you are attending IWF 2008 in Atlanta to review the current and emerging technologies and materials available to our industry. We must erase the snail mentality in this industry because the fast pace of world change is leaving us further behind every day. [To see a visualization of this point, go back to last month’s column and the photograph of Joseph Kittinger jumping out of a gondola at 102,000 feet and free falling at near the speed of sound.]
Made in the USA
Last month I stated that there was a time when manufacturers naively thought that “Made in the USA” stamped on a product would be reason enough for patriotic Americans to buy that item. Now I will contradict that statement to a degree. It is time for our industry to change its mindset and give consumers here, and around the world, a reason to want to buy a product with the “Made in the USA” label.
It is the snail mentality that sees the U.S. wood products industry as a lost, backward, unattractive and offshore industry. It is the snail mentality that says, “I am too small to export,” or “I can’t afford to change.” It is the snail mentality that ignores global trends. It is the snail mentality that refuses to look ahead and see the opportunity of a lifetime for our industry unfolding this very day.
Those readers that will color outside the lines and scour the globe [this includes the United States] for a new or additional customer base, and do their homework well, will rebuild energy, momentum and relevance for their company and help rebuild the wood products industry in this country. Next month we will look at some of the trends in the “new world” that should be drivers of your strategic plans, and how some might be incorporated into your own strategy.
Tom Dossenbach is the president of Dossenbach Associates Inc., a Sanford, NC based international consulting and research firm. Contact him at (919) 775-5017 or e-mail [email protected]. Visit his Web site at www.dossenbach.com. Past Management Matters columns are archived here.
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