Facing the forces of change survey results segmented by customer type_november 2011

IBM Global Business Services Segmentation by Customer Type
Facing the Forces of Change

Online Survey Results
Segmented by Customer Type

388 total responses

Contractors Industrial Retail Stores Commercial Healthcare Independent Non-profits Other
Manufacturing Facilities Providers and Chain and wholesaler
Facilities Restaurants government distributors
institutions

1 © 2011 IBM Corporation
© Copyright IBM Corporation 2006


Leading distributors are taking decisive actions and investing to
position themselves for a complex future

Decisive Actions for an Uncertain Economy
Latest iteration of
Facing the Forces of Change®

Available via the N.A.W. website:
http://www.naw.org/

Guy Blissett
Guy Blissett
Wholesale Distribution Lead
Wholesale Distribution Lead
IBM
IBM
Guy.Blissett@us.ibm.com
Guy.Blissett@us.ibm.com
Contractors (917) 224-9868
(917) 224-9868
Industrial Retail Stores Commercial Healthcare Independent Non-profits Other
institutions



Customer types

Contractors Industrial Retail Commercial Healthcare Independent Non-profits Other
Manufacturing Stores Facilities Providers and chain and wholesaler-
Facilities restaurants, government distributors
cafeterias institutions

Notes:
Notes:
• •Number of respondents to each question varies… see Sample Size figure on
Number of respondents to each question varies… see Sample Size figure on
each chart for specifics
each chart for specifics
• •Y-axis scale differs from chart to chart… avoid using visual comparisons
Y-axis scale differs from chart to chart… avoid using visual comparisons
• •Each chart is an embedded Excel file
Each chart is an embedded Excel file
institutions



Participant title
100%

90%

80% 75%

70% 64%
64%
60%
60% 56%
50%
50%
41% 40%
40% 37%
33% 33% 33%
30% 25% 25%
23%
23%
20% 17% 17% 16%
13% 13%
10%
10% 7%7% 6%6%5%
2%
0%
CEO / COO / Pres ident / Director / Vice Pres ident Regional / Branch / Sales Other (des cribe in
Other C-Suite Manager com m ents box)

Facilities Restaurants government distributors Sample Size = 349
institutions



Ownership structure
100% 100% 100% 100%
100% 95% 95%
91% 92%
90%

80%

70%

60%

50%

40%

30%

20%
9% 8%
10% 5% 5%
0% 0% 0% 0%
0%
Privately Held Publicly Traded

institutions



Organization Size: Total annual sales
100%
100%

90%

80% 75%

70%

60% 54%
50%
50%
42%
40%
40% 3 5 %
33%
29%
30% 25% 25%25% 27% 25%
22% 21%
20%
18% 17% 17% 18%
12% 13% 13%
8%
6% 5% 5% 7% 9% 6%
10% 7% 4%
2% 4% 2%
0%
Less than $20 $20 million to $50 $50 million to $250 $250 million to $500 million to $1 $1 billion or more
million million million $500 million billion

institutions



Geographic sales coverage

100%

90%

80%

70% 67%

60%
48% 50% 50%
50%
40% 40% 41%
38% 38%
37% 37% 37%
40%
33%

30% 25% 26% 25% 25%
19% 21% 20%
18%
20%
12% 13% 11% 13%
9% 8%
10%
0%0% 0%0%0%
0%
Local Regional: Multi-Regional / National Multi-National

institutions



Organization description: Type of sales

100%

90%
83%

80%

70%
60%
60%
52% 50% 50%
48% 49%
50% 45%
44%
39% 38%
40% 36%
29%
30% 25% 25%
22%
20% 18%20%
20% 17%
13%
9% 8%
10%
0%
0%
General Line Firm: 90% of sales Specialty Firm: 90% of sales f rom Limited Firm: 90% of sales f rom a
f rom more than f ive lines of trade tw o to f ive lines of trade single line of trade

institutions



Primary products

100%

90%

80%

70%
63%

60%
49% 50% 50%
50%
44% 43% 43%
40%
40%
33%
29%
30% 25% 25%
24% 24%
22% 22%
20% 20% 20%
20% 16%
17%
14% 14%
12% 13% 12%
10% 11% 9%9%
10% 6% 5%5% 4%

0%
MRO OEM Capital Res ale for retail Res ale for Other
Equipm ent s ervice

institutions



Company Strategy:
Sell product and offer fee-based services

100%

90%
80%
80%

70%
62%
57%
60%
50% 50% 50%
50% 45% 46% 45%
43%
40%
37%
40%

26% 29%
30% 25% 25%
20%
20% 16% 15%
14%
11%11%
10%

0%
Our company has no plans to do Our company does this today Our company does not do this
this today, but w ill by 2015

institutions



Company Strategy:
Offer discrete services to customers for a fee
100%

90%

80% 75%
71%
70%
60% 60%
60% 55%
52% 50% 50%
50%
42%
40% 35% 36%
33%
29%
30% 25% 25% 25%
20% 20%
20%
13%
10%
7% 7%
10%
0% 0%
0%

institutions



Company Strategy:
Offer third-party logistics to customers as a fee-based service
100%

90%

80% 75%

70% 65%
59% 57%
60%
49%50% 50% 50% 50% 50%
50%
43%
40% 34%
32%
30% 26% 25%
20% 21% 20%
20% 16%
9%
10%
0% 0% 0% 0%
0%

institutions



Company Strategy:
Optimize network design
100%

90%

80% 75%

70% 65%

60%
50%50% 51%49% 50% 50%
50%
43% 41% 43%
40% 35%34%
31%
30% 27% 25%
24%
19%
20% 16% 14%
8%
10%

0%

institutions



Company Strategy:
Outsource our company’s warehouse operations to a third-party
100%
1 00%
100% 94%
91%
90% 86%
80% 81%
80% 75%

70%

60%

50%

40%

30% 25%

20% 14%
10% 11% 10%
7% 6% 8%
10%
2%
0%

institutions



Company Strategy:
Outsource additional non-core administrative activities

100%

90%

80% 75%
70%71%
70%
62%
59% 57%
60%
50% 50% 50%
50%
43%
40%
31%
30% 25% 25% 27% 25%
24%
21%
20%
11% 9% 11%
10% 5%

0%

institutions



Company Strategy:
Outsource elements of IT infrastructure

100%

90%

80% 75% 75%

70%
57%
60%
51% 50%
50% 44%44%44% 44% 43%
39%
40% 37%
32%
30% 25% 25% 25%25%
20%
17% 16%
20% 13%
10%

0%

institutions



Company Strategy:
Create / grow presence in geographic markets outside U.S.
100%
100%

90%

80% 75%75%
68%
70%
62%
57%
60%
49%
50% 43%
38% 37%
40%
31%
29%
30% 25%25%
20% 20%
20% 14% 13% 13%
8%
10%

0%

institutions



Company Strategy:
Stop doing business with highly unprofitable customers
100%
100%

90%
79%
80% 76% 76% 75%
71% 70%
70%

60%
50%
50%

40%
29%
30% 25% 25% 25%
20%
20% 16% 14%
14% 14%
10%
10% 7%
4%

0%

institutions



Company Strategy:
Manufacture our own private-label products in an overseas plant
100% 100%
100%

90%
80%
80%
71%
68% 68%
70%

60%
51% 50% 50%
50%

40%
33% 32%
29%
30%

20% 15% 16%16%
14%

10% 6%

0%

institutions



Company Strategy:
Market our own private label products
100%
100%

90%

80%

70% 65%

60%
50% 51% 50%50%
48%
50% 45%
43% 43%
40% 37% 35%
34%
30%
30% 25% 25%
20%
17%
20% 14% 12%
10% 5%

0%

institutions


Company Strategy:
Participate in buying group/ marketing alliance with other distributors

100%

90% 86%
83%
80% 75% 75%
73%
70%
58%
60%
48%
50% 45%
43%
40% 35% 37%

30% 25% 25%
21%
17% 17%
20% 14%
12%
10% 7% 5%

0%

institutions



Company Strategy:
Create strategy for current and future human capital requirements
100%

90%
78%
80%

70%
60%59% 57%
60%
53%
50% 50% 50%
50%

40%
31%
29% 29%
30% 25% 25%25% 25% 24% 25% 25%
18%
20% 16% 14%
13%
9% 10%
10%

0%

institutions



Factors Impacting Today:
Increased product traceability
100%

90%

80% 75%

70%
60%
60% 57%
50% 50% 50%
50% 46%
44%
39%
40% 36%
34% 34%
29%
30% 25% 25%26% 24%25%
20% 19% 20%
20%
9%
10%
0% 0%
0%
Less signif icant Moderately signif icant More signif icant

institutions



Factors Impacting Future:
Increased product traceability
100%
100%

90%

80%

70%
60%
60%
50% 50%
50% 46% 45% 47%
40% 40% 40%40%
40% 34% 35%
31%
30% 27% 27% 26%
23%
20% 19%
20%

10%
0% 0% 0% 0%
0%

institutions



Growth of green bus segments
100%

90%
80%
80%

70%

60% 56%
50%50% 50% 50%
50% 46%
44% 44%
41%
38%
40%
33% 33%
29%
30% 25%26% 25%
20%
20% 17% 16%
13% 15%

10%

0%

institutions



Growth of green bus segments
100%

90%
80%
80%

70% 67%
60%
60% 57%
50% 50%
50% 45%46% 46%
42%
39%
40% 36%
33% 32%
30% 24%
20% 19% 20% 20%
20%

7% 9%
10%
0% 0% 0%
0%

institutions



Private label products
100%

90%

80% 75% 75%

70% 67%

60%
50%
50% 46%
40% 40% 40%
40% 37%
34% 33% 34%
32%
29%
30% 27% 26%26%
25% 25%
20% 18%
20%

10%
0% 0% 0%
0%

institutions



Private label products
100%

90%

80%

70% 67%
60%
60% 55%
50% 50%
50%
42% 43%
40% 40% 40%
38% 36%
40% 34% 34%
33%
29% 29%
30%
22% 23%
20%
20% 16%

10%
0% 0% 0%
0%

institutions



Disintermediation
100%

90%
83%
80% 75%

70%
59%
60%
50%
50% 46%
42%
40% 40%
38%
40% 34%
33%
29% 30%
30% 25% 25%24% 25%
24% 22%
20% 20%
20% 17%

10%

0%

institutions



Disintermediation
100%

90%

80%

70% 67%
60%60%
60% 54%
50% 50%
50% 47%
42%
40% 40% 40%
40% 36%36%
33% 34% 33%

30%
22%23%
20%
20%
11%
10%
0% 0% 0% 0%
0%

institutions



End customer consolidation
100%

90%

80%

70%

60% 55%53%
50% 50% 51% 50%50% 50%
50% 46%
40% 40%
40% 37% 36%
32%
29%
30% 25% 25%
20%
20% 17% 16% 15%
10%
10%

0%

institutions



End customer consolidation
100%

90%

80%

70% 67%
60% 60%60%
60% 57%
50% 49% 50%
50% 47%
43%
39% 40%40%
40%
33%

30% 25%
23%
20%
20% 15%
12% 10%
10%
0% 0% 0% 0%
0%

institutions



Industry consolidation
100%

90%

80% 75%

70%
60%
60%
49% 50% 51% 50%
50% 44%
40%39% 40% 39% 41%
38%
40%
33%

30% 25% 25% 25%
22%
20% 17% 17%
12%
9%
10%
0% 0%
0%

institutions



Industry consolidation
100%

90%

80%

70% 67%
60% 60%60%
58%
60%
49% 50% 50%50%
48%
50%
40%40%
40% 37%37% 37%
33%

30%

20% 13%

10% 5%
3% 3%
0% 0% 0% 0%
0%

institutions



Supplier consolidation
100%

90%

80%

70%
60% 60%
60% 54%
49% 50% 50% 50%50%
47%
50%

40% 34%
32% 32%
30% 27%
25% 25% 25% 25%
20% 20% 21%
20% 17%
13% 15%

10%

0%

institutions



Supplier consolidation
100%

90%

80%

70% 67%
60% 60%60%
60%
53% 51%
50% 50%
50% 46%
39%40% 40% 40%
40%
33%

30% 27%
20% 20%
20% 14% 13%
9%
10% 7%
0% 0% 0%
0%

institutions



Overseas competitor expansion
100%

90%
83%
80% 75%

70%
60%
60%
50% 50%
50% 46%
44% 42%44%
40%
40% 34%
33%
30%
30% 24% 25% 25%
22%
20% 20%
20% 17% 15%

10%

0%

institutions



Overseas competitor expansion
100%

90%

80%

70% 67%
60% 60%
60%
50% 50% 50%
50% 46%46%
40% 40% 40%
40% 37% 36%
33% 33%
29%
30% 26%
23%
18% 17%
20%

10%
0% 0% 0% 0%
0%

institutions



Macro-econ impact of crisis
100%
100%

90%
79%
80% 75% 76%
69%
70% 67%

57%
60%
50%
50%

40% 36%
33%
30% 25% 24% 25% 25% 25%

20% 16%

10% 7% 6%
5%

0%

institutions



Macro-econ impact of crisis
100%
100%

90%

80%

70%
60%
60%
50% 50%
50% 44% 46%
43% 43%
40% 38% 40% 38%
38%
40%
30%
30% 27%
24%
18% 20% 20%20%
20%
11%
10%
0% 0% 0%
0%

institutions



U.S. economy structural shift
100%

90%
80%
80% 75%

70%
62%
60% 57%
50% 50% 49% 50% 50%
50% 44% 45%

40% 37%
32%
30%
30% 25%
20%
20% 15%
12% 11%
8%
10%

0%

institutions



U.S. economy structural shift
100%

90%
80%
80%

70% 67%
61%
60% 55%
Column %

49% 50% 50%
50%
42% 43%
40% 40% 40% 40%
40%
33%
28%
30%
20% 20%
20% 17%
11% 11%
10%
3%
0% 0% 0%
0%

institutions


Facing the forces of change survey results segmented by customer type_november 2011

Facing the forces of change survey results segmented by customer type_november 2011

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