Your longtime competitor has been acquired by a much larger company – are you ready for the change this will mean for your local market?
As someone who’s spent your entire 40-plus year career in the LBM business, you and your company have been through a lot. You’ve enjoyed the housing booms and survived the busts. You were there as the big box lumberyards exploded from coast to coast—including two within 10 miles of your location. Only one of those is still operational. From material shortages to spiking mortgage rates, you’ve seen plenty of challenges. And you’re still standing.
Indeed, the most serious—and lasting—challenge that your company has faced is the other major LBM dealer in your market. Like your company, they operate one location, they’re family owned, and have spent decades building a solid reputation for delivering quality products and services. In short, they’re a good company and a formidable competitor. That may all be about to change.
You just learned that your longtime competitor has been acquired by a much larger company. At this stage, it’s impossible to know what this will mean to the competitive situation in your market. But already, rumors are rampant—and most of the talk positions your company as the probable loser.
Specifically, there’s speculation that their new ownership will mean more resources, better access to capital, and more robust buying power. While this all may be true, you know from experience that the bigger competitor is not always the strongest.
You remember clearly the day the news broke that Builders Square was going to open a big box location just one block away from your yard. You remember people assuming that meant the end of your company—for how could you possibly compete? You remember the brief drop in business after they opened, and the satisfaction of welcoming customers back once they realized that bigger isn’t necessarily better. Lastly, you remember the day that store closed for good.
At this point, it’s too early to know what the ramifications will be for your business. As the general manager, the news definitely gives you some fresh challenges to manage. Already, several members of your staff have approached you and asked if this means that they should start looking for a new job, and some of your builder customers are making noises about possibly giving the competition another shot at their business—once the deal closes.
In your gut, you don’t believe that the competitor’s new ownership will seriously disrupt your market. After all, your company’s membership in a member-owned co-op gives you tremendous buying power. You’ve got a great team in place—all the way from your outside salespeople to your yard workers and delivery drivers. You’ve got deep roots in your market, and have solid relationships with many of your biggest customers.
Here’s the challenge: you know all of this, but your market doesn’t. Unchecked rumors—like those burning through your market—can take on a life of their own. What would you do?
What would you do?
1) Run your race. New ownership at a competing company is a reality that’s beyond
your control. Remain focused on what you do best: serving your customers.
2) Make some noise. Don’t let the competitor dominate the conversation. Your still a family owned firm that has lots to be proud of. Contact the media and tell your story.
3) Do some digging. It’s time to learn what the new ownership will mean to your
competitor’s operations. Research how this scenario played out in other markets.
4) Make changes. Those changes that you and your yard’s owner have been
discussing? Now’s a perfect time to pull the trigger, and put your company in the
best position to win.
Something else?
If you’d take a different plan of attack, email your suggested solution to Rick@LBMJournal.com.
WANTED: CHALLENGING BUSINESS SITUATIONS. Got a Tough Call of your own?
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