Facing the forces of change survey results segmented by total sales_october 2011

IBM Global Business Services
Segmentation by Self-Reported Total Sales
Facing the Forces of Change Segmentation by Self-Reported Total Sales

Online Survey Results
Segmented by Self-Reported Total Sales

388 total responses

$20 million $50 million $250 million
Less than $500 million
to < $50 to < $250 to < $500
$20 million and above
million million million

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
(917) 224-9868
(917) 224-9868
to < $50 to < $250 to < $500



Total Sales segmentations

to < $50 to < $250 to < $500

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
to < $50 to < $250 to < $500



Online survey participant
Title Less than $20 million $20 milllion to < $50 million $50 million to < $250 million
$250 million to < $500 million $500 million to over $1 billion

70% 67%

58%
60% 55%

50%
43%
38% 37% 38%
Column %

40%
32%
29%
30%

19%
20% 17%
11%
8% 8% 7% 9%
10% 6% 7% 5% 6%

0%
Chief Executive Of f icer / Director / Vice President Regional / Branch / Sales Other (describe in
Chief Operating Of f icer / Manager comments box)
Other C-suite / President

to < $50 to < $250 to < $500
Sample Size = 365 $20 million and above



Primary responsibility than $20 million
Less $20 milllion to < $50 million $50 million to < $250 million

80% 75%
72% 70%
70%
63%
60%

50% 46%
Column %

40%

30%
23%
19% 20% 20%
20% 15%
12%
10% 10%
9%
10% 5% 6% 5%
2% 1% 2% 2%1% 0% 3% 3% 1% 2%
3%
0% 0% 1%0% 0% 0% 0%0% 0% 0%
0% 0%
0%
Executive / Sales / C usto m er Supply C hain / P ro curem ent Finance / Info rm atio n Other
M anagem ent M arketing / Service Lo gistics A cco unting Techno lo gy (describe in
D em and co m m ents
Fulfillm ent bo x)

Sample Size = 363 Less than $500 million
to < $50 to < $250 to < $500



Organization size (Total Annual Sales)
Less than $20 million $20 milllion to < $50 million $50 million to < $250 million

120%

100% 100% 100% 100%
100%

80%
Column %

57%
60%

43%
40%

20%

0%0%0%0% 0% 0%0%0% 0%0% 0%0% 0%0%0% 0% 0%0%0%0% 0%0%0%0%
0%
Less than $20 $20 million to $50 million to $250 million to $500 million to $1 billion or more
million $50 million $250 million $500 million $1 billion

to < $50 to < $250 to < $500



Ownership Less than $20 million
structure $20 milllion to < $50 million $50 million to < $250 million
99% 100%
100% 95%

90% 85%

80%

70%

60%
Column %

53%
50% 47%

40%

30%

20% 15%

10% 5%
1% 0%
0%
Privately Held Publicly Traded

to < $50 to < $250 to < $500



GeographicLess than $20 < $500 million
sales to million
$250 million
coverage $20 milllion to < $50 million
$500 million to over $1 billion
$50 million to < $250 million

60%
51%
48%
50% 45%
44%
41% 42%
40% 37%
Column %

30%
30% 25% 25%
21%
20% 16% 18%19%
14%
9% 10%
10%
4%
0% 0%
0%
Local: We serve Regional: We serve Multi-Regional / National: Multi-National: We serve
customers w ithin a single, customers w ithin multiple We serve customers in customers both inside
local geographic market geographic markets in a multiple regions of North and outside North
single region of North America A merica
America

to < $50 to < $250 to < $500



Online survey participant $20 milllion to < $50 million
Less than $20 million $50 million to < $250 million

Organization’s majority customer type $1 billion
$250 million to < $500 million $500 million to over

50% 47%

45%
39%
40% 36%
34%
35% 33%
31%
29%
30% 28%
Column %

24%24%
25% 21% 20%
20% 18% 18%
16%
15%
15%
11% 9%
9%
10% 7%
5%
4% 3% 3% 2%3%
5% 1% 2% 1% 0% 2% 0% 0%
2%
0% 0%
0% 0% 0% 0%
0%
Co ntracto rs Industrial Retail sto res Co m m ercial Health care Independent N o n-pro fit and Other
m anufacturing facilities pro vider and chain Go vernm ent who lesaler-
facilities restaurants, institutio ns distributo rs
cafeterias

to < $50 to < $250 to < $500



Online survey participant $20 milllion to < $50 million
Less than $20 million $50 million to < $250 million
Organization’s type of sales million to over $1 billion
$250 million to < $500 million $500

70%
63%

60% 56%

50% 48%
46%
40% 41%
39%
Column %

40%
34%
29% 30% 29%
30%

20%
14% 15%
11%
10% 7%

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

to < $50 to < $250 to < $500



Organization’s primary products to < $50 million
Less than $20 million $20 milllion $50 million to < $250 million

35%
30%
30% 28% 28%
27%
26%
25% 23% 22%
21% 21%
20% 19% 20%
Column %

18% 19% 19% 19%
20% 18%
17% 17% 17%
15%
15% 13%
12%
11%
10% 7%
5%
4%
5% 3%
0% 0%
0%
MRO: OEM: Components Equipment: Capital Resale f or retail: Resale f or Other (describe in
maintenance, incorporated into equipment Finished products service: Finished comments box)
repair, and another product products f or resale to products to
operations of consumers service
customer f acilities customer’s
customer

to < $50 to < $250 to < $500
Sample Size = 340



Company Strategy:
Sell product and offer fee-based services

100%

90%
79%
80%

70%

60% 54%
52% 53%
50% 46%
38% 37%
40% 35% 33%
30%
19%
20% 14% 13%
10% 10%
7%
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

to < $50 to < $250 to < $500
Sample Size = 285



Company Strategy:
Services available to customers even if no product is purchased

100%

90%

80%

70% 64%

60% 53% 54%
49%
50% 46% 45% 44%
42%
40%
32%
30%
21%
20% 15% 14%
10%
10% 5% 4%

0%

to < $50 to < $250 to < $500
Sample Size = 278



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

100%

90%

80%

70% 65%
62% 60%
60%

50% 43% 42%
40% 33%
29% 29%
30% 25% 27% 25%
23%
20%
12% 13% 13%
10%

0%

to < $50 to < $250 to < $500
Sample Size = 276



Company Strategy:
Optimize network design (i.e., #, size, location of branches, DCs)

100%

90%
78%
80%
71%
70%

60% 55%
49% 51%
50%

40% 36%

30% 27% 25%
24% 21%
19%
20% 15%
13%
7% 9%
10%

0%

to < $50 to < $250 to < $500
Sample Size = 271



Company Strategy:
Outsource warehouse operations to < $50 million $50 million to < $250 million
Less than $20 million $20 milllion to a third-party

100% 93%
89% 89% 87%
90% 86%

80%

70%

60%
Column %

50%

40%

30%

20%
10% 9% 9% 9% 7%
10% 4% 5%
0% 1% 2%
0%

to < $50 to < $250 to < $500
Sample Size = 270



Company Strategy:
Outsource additional non-core administrative activities

100%

90%

80%
71% 71%
70% 66%
63%
60% 55%

50%

40% 34%
28%
30% 24% 24%
21%
20% 13%
11%
5% 7%
10% 5%

0%

to < $50 to < $250 to < $500
Sample Size = 272



Company Strategy:
Outsource elements of IT infrastructure (e.g., applications, server)

100%

90%

80%

70%

60% 55%
49% 50%
50% 45% 47%
40%
40% 36% 36% 36%
32%
30%
20%
20% 15% 15% 14%
9%
10%

0%

to < $50 to < $250 to < $500
Sample Size = 272



Company Strategy:
Create and/or grow presence in geographic markets outside U.S.

100%

90%

80%

70% 65%
61% 63%
60% 56% 54%
50%
38%
40%
29% 27%
30% 25%
20%
20% 16% 15%
12% 13%
8%
10%

0%

to < $50 to < $250 to < $500
Sample Size = 273



Company Strategy:
Stop doing business with highly unprofitable customers

100%

90%
82%
79% 78%
80%
70% 71%
70%

60%

50%

40%

30%
21% 21%
20% 14% 13%
9% 11%
7% 8% 7% 9%
10%

0%

to < $50 to < $250 to < $500
Sample Size = 278



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

100%

90%

80% 76% 75%
71%
70% 64%

60% 55%

50%

40% 36%

30%
22% 21%
20% 15% 15%
11% 13% 9%
9% 7%
10%

0%

to < $50 to < $250 to < $500
Sample Size = 272



Company Strategy:
Market our own private label products

100%

90%

80%
68%
70%

60%
49% 50%
50% 46% 46%
39% 39%
40% 33%
29%
30%
21%
18% 17%
20% 15% 14% 14%
10%

0%

to < $50 to < $250 to < $500
Sample Size = 275



Company Strategy:
Participate in distributor buying group/ marketing alliance

100%

90%

80%
69%
70% 64%
60%
60% 56% 55%

50%
41%
40%
29% 29% 29%
30% 25%

20% 15%
12%
5% 7%
10% 5%

0%

to < $50 to < $250 to < $500
Sample Size = 282



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

100%

90% 86%
79%
80%
70%
70%

60% 55%
48%
50%

40% 33%
28%
30% 24%
19%
20% 13% 10% 13%
7% 8% 7%
10%

0%

to < $50 to < $250 to < $500
Sample Size = 276 million million million



Factors Impacting - Today:
Increased product traceability

60% 57%

49% 48%
50%
45%

40% 38%
34% 33%
29% 29% 29%
30%
25%
23%
21% 21%
20% 17%

10%

0%
Less signif icant Moderately signif icant More signif icant

to < $50 to < $250 to < $500



Factors Impacting - Future:
Increased product traceability

60%
53%
50%
50%

38% 38%
40% 37%
36% 35% 33%
32%
30% 30%
30% 26%
25%
21%
20% 17%

10%

0%

to < $50 to < $250 to < $500



Growth ofLess million$20business$20 milllion to <over $1 billion
greento <million million $500 million to $50 million
$250
than
$500
segments $50 million to < $250 million

70%
62%
60% 57%

48% 49%
50%

40%
Column %

40% 36%

29% 29%
30% 27%
25% 24% 24%
21%
20%
14% 14%

10%

0%

to < $50 to < $250 to < $500



Growth of green business segments

58% 58%
60%
52%

50% 46%
43% 43%

40% 37% 38%

32%
30%
25%

20% 16% 16% 17%
14%

10%
5%

0%

to < $50 to < $250 to < $500



Disintermediation

50%
45%
43%
41%
40%
39%
40%
36%
34%
33%

30% 28%
Column %

25% 24%
24%
21%
20%
15%

10%

0%

to < $50 to < $250 to < $500



Disintermediation

60% 58%

50% 48%
46%
42%
40% 38% 37%
35%
33% 33%
Column %

32% 32%
30%
25%

20% 16% 15%

11%
10%

0%

to < $50 to < $250 to < $500



Private label products

50%
45%
45% 43% 43%
41%
40% 40%
40% 38%

35% 33% 33% 32%
29%
30% 28%
Column %

26%
25%

20%
15% 14%
15%

10%

5%

0%

to < $50 to < $250 to < $500



Private label products

60%
53%
50%
50%

41% 42%
40%
39%
40% 36%
35%
Column %

31%
29%
30%
25% 24% 25% 25%

20%

10%
5%

0%

to < $50 to < $250 to < $500



End customer consolidation

60% 56%

50% 50%
50%
43% 43%
40%
40% 38%
35%
Column %

29% 28%
30%
25%
21%
19%
20% 16%

10% 7%

0%

to < $50 to < $250 to < $500



End customer than $20 million
Less consolidation milllion to < $50 million
$20 $50 million to < $250 million

58%
60%

49% 48%
50% 47% 47%
44%
42% 42%
40% 37%
Column %

30%
25%

20% 17% 17%
14%

10% 8%
5%

0%

to < $50 to < $250 to < $500



Supplier consolidation

60% 57%
55%

50% 50%
50%
43%

40% 38%
36%
33%
Column %

29%
30% 27%

21%
19%
20% 16%
14%
12%
10%

0%

to < $50 to < $250 to < $500



Supplier consolidation

70%
63%

60%
52% 51% 50%
48%
50%
42% 42%
Column %

40% 37%
32%
30% 25% 25%

20%
13%
10%
10% 6% 5%

0%

to < $50 to < $250 to < $500



Industry consolidation

50%
45% 45% 46% 45% 45%
45% 43% 43%
41% 40% 40%
40%

35%

30%
Column %

25%

20%
15% 14% 15%
15% 14%
10%
10%

5%

0%

to < $50 to < $250 to < $500



Industry consolidation

68%
70%

57% 58%
60%
52% 51%
50%
44% 44%
42%
Column %

40% 37%

30% 26%

20%

10% 6% 5%
4% 5%
0%
0%

to < $50 to < $250 to < $500



Overseas competitor expansion

58%
60%

50% 47%
43%
41% 42%
40% 37%
36% 35%
33%
Column %

30%
30% 26%
25%

20% 17% 16%
15%

10%

0%

to < $50 to < $250 to < $500



Overseas competitormillion
Less than $20
expansion to < $50 million
$20 milllion $50 million to < $250 million

60%
52%
50%
50%

41% 42%
39%
40% 37% 37% 37%
Column %

30%
24% 23% 25% 25% 25%
21% 22%

20%

10%

0%

to < $50 to < $250 to < $500



Macro-economic impact of crisis

80% 75%
69%
70% 67% 67%
62%
60%

50%
Column %

40%

30% 26% 28% 27%
23%
20%
20% 15%

10% 7% 7%
3% 5%

0%

to < $50 to < $250 to < $500


Facing the forces of change survey results segmented by total sales_october 2011

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