Rock Ledge Resources > Liz DeMarais > Representative Project - New Market Development

New Market Development

Business Challenge

Custom fabrication has a fairly low barrier to entry, so fabricators constantly find themselves challenged by new US and offshore competitors. One such company offered high quality engineered fabrication to a core clientele, but struggled with declining margins and fluctuating order volume. They sought ways to improve margins and minimize plant downtime in a highly competitive marketplace.

Solution

A Rock Ledge Resources principal took a two-step approach to the problem. She first analyzed the core strengths and capabilities of the fabricator, then ran simulations of the optimum projects for those competencies. Next, she located markets that had fabrication needs identified in the "optimum" simulations. One market had previously been considered by the fabricator, but not pursued because of misperceptions and concerns about future demand. The new markets could bring large custom orders and, more importantly, repeat orders that allowed for greater productivity and, in turn, higher margins.

Results

Because of the order sizes, repeat rates and the addition of new technology, the two new markets brought an 18% margin improvement compared to the fabricator's core customer base. In the first three months alone, a custom order from the new markets brought $2.5 million in new sales.

Relationships: Liz DeMarais | Customer-Focused | Manufacturing