Friday, March 24, 2023
HomeCommentarySheet metal fabricator develops full-fledged diversification strategy

Sheet metal fabricator develops full-fledged diversification strategy

Management of Southern Stainless company in Virginia understand how important diversification of their product offering is for success of the company. In order to increase the revenue and plant’s capacity, new laser cutting machine is installed. By doing this, company bridged the gap between their sheet metal operations and the machine shop. Management understands that new equipment will enable the company to anticipate market shifts and successfully meet the demand, while maintaining competitive advantage. In a strategic shift for the company, Southern Stainless is able to bring the opportunities to their customers, instead of customers approaching the company first.

Key Takeaways:

  • Often manufacturing companies get their start by making custom parts for a specific single customer.
  • Relying too heavily on a single part of an overall industry is a dicey proposition however when it comes to developing long-term growth
  • One manufacturer who appreciates the need for diversification operates three companies under one roof, including one which offers more than 6000 powder coating options.

“The parent company, Southern Stainless, would buy a machine or develop a process for a single customer and before long, word would get around among his customers. In these two cases Rouse created new companies to focus on those specific capabilities.”

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