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Weekly UpdatesThe prices quoted by offshore sources look so attractive that many manufacturers believe there is no way to compete by remaining in the U.S. Here is part three of an example of a company--Baldor Electric Co., Fort Smith, AR,--that not only is facing offshore competition, but winning.
Baldor sells its products to more then 180 market SIC codes. The company's goal is to compete anywhere in the world while manufacturing in the U.S.
"We don't depend on a few large industries for our business. We have a variety of markets and an even wider variety of customers," John McFarland, Baldor chairman and CEO, said.
Sales Strategy
Baldor's sales strategy segments its customers by looking for those who want the highest quality, energy efficient product available in the marketplace and selling to those value-minded customers.
Baldor monitors its customers through its salespeople. Its sales staff spends as much time with customers as possible. A second monitoring method is the service departments. The sales staff gets detailed service reports regarding customer problems and make follow-up calls. Company management goes on sales calls with the sales reps.
"We want to create customer preference by setting ourselves apart from our competitors," McFarland said.
Pricing Strategy
Pricing is simple if competition means offering the lowest price. But, with low-cost foreign competitors coming into our markets, most U.S. manufacturers cannot compete on price alone--they need to sell value at a competitive price.
Many U.S. manufacturers try to reduce cost and shorten delivery times by using internal efficiencies like Lean Manufacturing and Six Sigma. But, customers' perceived value only comes if a company also can produce quality products with superior support and service.
New Products
Baldor has invested in new products of its own design, or acquired new product lines. Its continuous innovation also includes "line extension new products." These are new designs of existing products by the addition of new features or parts. Line extension designs can lead to significant volumes and new market niches.
These strategies pay off for Baldor. It is number one in market share of all industrial electric motors sold in the U.S. and number two in the world.
The Right Company Culture
It has built a culture of providing job security. In communications with customers, management emphasizes that job security only comes from customers. Unions and government cannot provide job security, only customer purchases.
This series makes the case that U.S. businesses always have had foreign competition, such as the Japanese and now the Chinese. But U.S. manufacturers continue to compete by adapting strategies other than cost reduction.
Like many U.S. manufacturers, Baldor uses Lean Manufacturing methods and other systems to reduce waste and lower costs. But, that is only one part of its overall plan to manufacture in the U.S. and compete with foreign competitors. It's other strategies, addressed in this series, shows the way to success.
Mike Collins
President
MPC Management
Mike Collins is the author of Saving American Manufacturing, a step-by-step strategy that demonstrates how to become an organization that finds opportunities in today's fast-changing global environment. Visit the author's website at www.mpcmgt.com
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