個案總覽

Four truths apply to every business situation: 1) it is essential to be a lower-cost supplier; 2) to stay competitive, the inflation-adjusted cost of producing and supplying products and services must trend downward; 3) the true cost and profit pictures for each product/market segment must always be known; and 4) a business must concentrate as much on cash flow and balance sheet strengths as it does on profits. Various costs must be carefully isolated and assigned; expense categories such as R&D, sales, general, and administrative costs must not be ignored. Also gross margins should usually not be less than 40% and assets should not be over 60% of annual sales.

Companies increasingly rely on industrial distributors to sell their products. Products suitable for distributors usually: 1) have a large potential customer base, 2) are stockable, 3) are sold in small quantities, 4) are bought by people who are at low levels in their organizations, and 5) require rapid delivery and service. Companies should select distributors that serve the market segment, not just the geographic area, and are suited to where the product is in its life cycle.