1. INDUSTRY SITUATION ANALYSIS
1.1 Dominant Economic Characteristics of the Industry Environment
• Market size: The Industrial Distribution industry was estimated to be $400 billion in 2001, but the industry has many sub-industries within it (16). To name a few, Home Improvement revenues were $73 billion in 2003, $5.1 billion for the Building Materials Wholesale industry, $61 billion for the Electronic Wholesale industry, $10.4 billion for the Industrial Equipment Wholesale industry, and $211 billion for the Basic Materials Wholesale Industry (14).
• Scope of competitive rivalry: All of the top ten companies in the industry have a national impact with their companies, although some have expanded into small international ventures in countries like Canada, Singapore, Mexico, and Puerto Rico. Some of the smaller but still large companies in the industry have a regional impact moving toward national (7).
• Market Growth Rate: The market growth rate from 2002-2003 was both up and down for the top 50 companies in the industry. Half of the companies had declining sales at an average of 11%, 23 of the top 50 companies reported an average of 11.6% in sales gains, and two companies reported flat rates of growth (7).
• Stage in life cycle: The industry is at the mature stage in the life cycle. The major competitors have been established for over 25 years, some dating back as early as the 1920’s.
• Numbers of companies in the industry: There are over 100 “big” companies in the industry. The top fifty companies, the “biggest of the big,” range in sales (2002) from $86.5 million to $4.64 billion and from 20 locations to over 110 ...