What’s occurring?
Chris Ball of MBA Associates gives readers a revealing insight into the state of play of the window industry and offers some invaluable advice
Nessa’s greeting from that well known TV show is in fact a question we are asked a lot, though usually couched in different language it has to be said and it leads to reflection on the sector and where, as the country drags itself out of the worst period economically most of us can remember, we are.
In truth the past few years have been kind to the window industry and in part that’s because it was a challenging place to do business even before 2008/9. This is a sector where no one has a unique product (sure there are differences but nothing that gives a clear competitive advantage) so no Microsoft. No one has a unique route to market so no Direct Line (although that was copied quickly and is no longer unique) and no one has a unique manufacturing process so no one to compare with Pilkington at the height of their patent. However there are clear differences in company performance. There are businesses out there that are still making money and some at the other end of the scale that face clear and present threats ‘it’s a mixed bag’ the only thing that changes is the proportions in each category…. In a growing market more do well than fail and in a challenging market more fail than do well. The real question is why?
Sometimes it’s strategy, old business models that worked fine in the past don’t necessarily fit a company for the future and no doubt there are still some companies out there that haven’t thought ahead and many are frantically now trying to catch up (or worse are “waiting for things to get better”!) strategy ‘on the hoof’ and reactive at best. Markets and customers change and in today’s world are changing ever faster. Listing the examples above of companies that had unique advantages in their markets brings home the point about how fast a unique advantage lasts before it is copied or bettered. Microsoft, a world beater if ever there was one is going to get swallowed by the internet revolution if it doesn’t change and even a company of that size and power acknowledges that it will become irrelevant if they don’t address the model. If you still think that the sector is about business as usual but working a bit harder then lets not forget that we are about to see some sizeable players with great home improvement brands and proper funding enter our market, the likes of B&Q and Homebase see real opportunity and are likely to make inroads and that scenario will require a strategic response.
Sometimes it operational excellence, you can bet your last £ that your competitors (or any worth worrying about) are striving to improve and even those companies that sat comfortably on ‘acceptable’ profits in the good times are now seeing those eroded and addressing their operational performance. Increasingly it’s consolidation and M&A is back with a vengeance in the sector giving acquirers scale, market share and access to talent.
You could argue its luck and being in the right place at the right time has made many a fortune in our sector but you need to put yourself in a position to be lucky (no one wins the lottery without buying a ticket!) All these factors share one common element people! (well maybe not if you are relying on luck). Good people formulate and even more importantly deliver good strategy. Good people deliver operational excellence and good people work hard and put themselves in front of…. and then take, opportunities.
By asking “what’s going on in the sector” people often mean “How is everyone else doing” the enquirer is usually saying “what are they doing that I should be?” and the answer is clear, make sure your BIG IDEA is clear and well thought out then recruit, retain and develop top performing teams of people. Winning the talent wars is not optional and as a client of ours with more millions that I care to count says…. “Survival is not a right.”
E: chris.ball@mba-associates.co.uk
