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November - December 2002

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A Not-So-Easy Question
What Business Am I Truly In?
by John Matukaitis

In my last column I mentioned a few unfolding changes that appear poised to have a major impact on the fenestration industry. These embryonic events also dictate that now, and especially in the foreseeable future, it is time to devote resources to making the best products of which you are capable.

I received a number of calls from people, many of whom agreed and some who disagreed (perish the thought), with my comments. One conversation in particular caused me to think in a retroactive mode rather than in a prophetic vein. This man did feel that many changes were going to occur in the fenestration industry, some sooner than others and some with greater impact than others. Two principles he mentioned stuck with me: 1) really identify and thoroughly know the business you are in, and 2) make changes accordingly. These were his keys to the 32-year longevity and success of coping with change in his window and door business.

A week later I called to tell him that his principles and keys for business success really started me thinking. What business are YOU really in? One’s first reaction may be to say the window, door, sealant, glazing, insulating glass or spacer business. Wrong!

Thinking Outside the Box
He was challenging me to think outside the box. A company that makes drill bits is not selling ¼-inch bits, but actually is in the ¼-inch hole business.

A major bubble gum company, which also produced baseball trading cards, watched its market share and profits decline over a three-year period. The company spent a lot of money on market research and compiled reams of quantifiable data relative to other gum and card companies, but still had no meaningful answers. Eventually the staff looked outside the box and realized that they were really in the entertainment business.

The company’s real business was not competing with other gum and card companies, but with anything that competed for the finite, disposable spending of 6- to 12-year-old kids seeking entertainment.

Once the company realized it was in the entertainment business, it changed its product (adding cards for rock stars, wrestling stars, hockey players, basketball players, NASCAR drivers, etc.), and sales and profits rose quickly.

Determining Your Real Business
Fenestration products companies also need to think about their real business. Is it really a few lites of glass and a vinyl, wood or aluminum sash and frame? Or, is it a package of satisfaction that adds complementary accents to a home, a realistic and meaningful warranty, mold-proof windows, self-cleaning glass, etc.? Or is it something different?

During our second conversation, I asked this successful fenestration products manufacturer how long he had been in business. He said he has been in four different businesses—eight years in each. What he meant was that as his customers’ expectations changed and changes in the industry unfolded, he analyzed what business he was really in or about to be in, and made changes to a “different” business, and usually with “different” products. He elaborated by saying that a number of factors—including the energy crisis of the 1970s, the advent of hot-melt butyl IG sealants in the 1970s, the introduction of low-E glass in the 1980s, stronger Equal Employment Opportunity and Occupational Safety and Health regulations in the 1970s and 1980s, gas filling in the 1990s and the shift from wood to aluminum to vinyl—had effected his business throughout the years.

“If I tried to run my business today as I did five, ten, 15 or 20 years ago, I would be a statistic in the out-of-business column,” he said. “Today, a window system is an energy product, an appliance in the wall. Is it still a window? Is it still the same business?”

Something to think about.

John Matukaitis serves as marketing director for Delchem Inc., based in Wilmington, Del.