Lennox Competition
Now Viewing Lennox's competition in: Electrical, Plumbing, and Hardware Distributors (primary)
Call Preparation Questions
Customers, Marketing, Pricing, Competition
To what end-use industries does the company sell? - Typical industry customers include retail home centers, hardware stores, building material dealers, mass merchandisers, construction contractors, industrial companies, and installation, maintenance, and repair businesses.
How many customers does the company have? - A large distributor may have thousands.
How many of the distributor's customers are construction contractors? - According to National Association of Electrical Distributors, nearly half of electrical supply customers are contractors, about 30 percent are industrial, 14 percent are commercial, 6 percent are utilities, 5 percent are other, and 2 percent are do-it-yourselfers.
Who are the company’s top five customers? What percentage of sales goes to these customers? - Small distributors may depend heavily on a few large customers.
How large is the company’s sales force? - Most distributors have a sales force that makes regular customer visits and has detailed technical knowledge of the customer’s business.
What types of technical support does the company provide? - Some customers rely heavily on their distributors for technical information. Distributors are often the source of new product information.
What types of marketing does the company do? - Many distributors conduct promotional activities throughout the year, advertise in Yellow Pages, and participate at regional industry trade shows.
Competitive Landscape
Sales are driven by demand from the construction, telecommunications, and hardware retailing industries. Profitability depends largely on merchandising and efficient inventory management. Large companies have wide distribution networks and may offer customers a broad selection of products and services. Small operators can compete successfully by stocking specialty products, stocking all of the parts their particular customers need, or delivering superior service. The industry is capital-intensive: average annual revenue per employee is about $450,000.
Full Industry Overview For Electrical, Plumbing, and Hardware Distributors
Business Challenges
CRITICAL ISSUES
Heavy Dependence on Construction Industry - A large portion of sales goes to contractors in the construction industry, especially residential, which tends to be cyclical and seasonal. Construction fluctuates depending on a variety of factors, including favorable interest rates, credit availability, and underwriting standards. While higher interest rates tend to dampen construction, construction has been lower despite low interest rates during the most recent recession.
More Customers Move Overseas - During the past decade, more US manufacturing has moved to countries with lower labor costs, leaving behind US distributors that supply them with small industrial parts. Distributors that supply only US manufacturing companies face a market with limited growth.
Industries Where Lennox Competes
- Construction
- Construction Materials
- Plumbing & HVAC Equipment(primary)
- Construction Materials
- Consumer Products Manufacturers
- Appliances
