Flanges stacked in warehouse, selective focused

New Service Exploration For Industrial Products Distributor

The Challenge: A $5 billion industrial products distributor was charged with developing new, value-added services with which to augment its core distribution business, which faced increasing price competition. The company had an under-utilized service capability, which it thought could spur growth.

Assessment: Blue Canyon analyzed the needs of the firm’s customers, segmented the potential market, and performed an opportunity/ fit analysis to determine the best segments and corresponding market size for each service offering. Since the company was concerned about cannibalization of its core products, we developed detailed models to examine alternative approaches to product and service offerings.

Strategic Solution: Blue Canyon identified a market segment that would place a high value on the service, have relatively low price sensitivity, and have a low threat of cannibalization of core product offerings. The market segment was sized at $100+ million in revenues.

Results: The client entered this market with a new service offer and grew its revenue base by 15% in the first 3 years of operation.

Related Insights