The battle for the customer

Citation

(2003), "The battle for the customer", Anti-Corrosion Methods and Materials, Vol. 50 No. 1. https://doi.org/10.1108/acmm.2003.12850aaf.001

The battle for the customer

The battle for the customer

Keywords: Industry, Metals, Customers, Business plan

Over a quarter of the industry will suffer casualties in “The battle for the customer,” according to the latest Plimsoll analysis on the UK Metal Treatments industry. Drawing up a special “battle plans” edition, Plimsoll found a record number of companies showing declining sales and losing money.

Likening company Directors to Generals of their own army, Plimsoll analysed the top 1,000 companies in the UK Metal Treatments industry to produce “battle plans” each company will use to prosper. They found that 135 companies need to retreat in order to survive, 180 should hold their position and 119 need to force home their current advantages. Crucially though this special edition shows how each of these companies will carry out these tactics.

“Every General of an army must preserve the life of the troops by recognising the signs of strategic advantage and exploiting their enemies’ weaknesses. If companies are vulnerable then they must retreat and regroup so they can fight another day. It seems the Metal Treatments industry is waging a war,” says David Pattison, Senior Analyst at Plimsoll.

The walking wounded are the 135 companies Plimsoll feels should retreat and regroup. These companies would greatly benefit by strengthening their strategy in three key measures. Cutting back on all non-profit making parts of the business is primary. Debt levels should be reduced by at least 32 per cent. In any battle there are casualties, and in this case, 18 per cent of the workforce would have to go.

The analysis suggests that fundamentally many of these businesses could have a great future if costs could be controlled. Plimsoll found that if costs were brought in line, margins would rise from an average loss of 4.8 per cent on sales to an average 1.0 per cent profit margin.

Unless these 135 companies move quickly, 119 companies are set to win the battle. “These companies have edged into a winning position and I believe they have yet to recognise how good an advantage they have. Their strengths speak for themselves yet their biggest threat is sitting back and doing nothing,” Pattison concludes.

Performing far above the industry norms, here are just a few of the outstanding figures that set these 119 winning companies apart from the rest.

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  48 companies managed to grow last year on average at 7 per cent,

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  36 companies made a 48 per cent pre-tax margin on sales,

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  28 companies made a 26 per cent return on investment,

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  11 companies increased their work force by 10 per cent or more last year.

Plimsoll’s UK ‘Metal Treatments – Battle Plans’ special edition reveals the tactics each of the 1,000 companies will use in the battle. To order this special edition for £325, ring Plimsoll. Readers of this publication will receive a 5 per cent discount if mentioning this article upon ordering.

Plimsoll Publishing has also launched a new Web site aimed at owners/managers in the UK Metal Treatments industry looking to make an acquisition or to sell their own company.

This unique service from Plimsoll helps companies gain a better understanding of what their own company is worth and presents company names and analysis of what companies would be their best options for buying or selling.

“The idea for the Web site and the buying or selling’ service came from a great deal of interest we were receiving from companies keen to go on the acquisition trail. Yet they did not have a simple, cost effective means of assessing what companies to go after. I knew we could offer a real insight into specific companies in the industry our clients could target. Now, prior to calling in the professionals, owners can take a good look at the possibilities for themselves,” says David Pattison, Acquisitions Manager at Plimsoll Publishing Ltd.

“There has never been anything like this kind of service before that I am aware of. Traditionally buyers have waited for companies to hit the receivers before they look to buy, but Plimsoll’s model of analysis actually spots ‘what companies’ are showing signs of failing several months or years before the company folds.

Of the 392 companies currently in the UK Cleaning Equipment and Materials industry that we have (Plimsoll) put a value on, 132 of them have good future potential and could be transformed under new ownership,” says Pattison.

Plimsoll’s buying or selling service includes valuing their client’s company, locating and analysing companies that they could afford as well as locating and analysing companies they could sell their company to. Also included is a full study of 1,218 UK Metal Treatments companies including valuations and analysis of current and future performance. The fee for this service is £600 plus VAT. For details, visit www.whatcompany.com

Details available from: Plimsoll Publishing Ltd, Tel: +44 (0) 1642 262410; Fax: +44 (0) 1642 626410; Web site: www.plimsoll.co.uk