Volume 34, Number 4, April 1999


Smaller Can Be Better

Combating the Trend Toward Window Consolidation

by Clark Halladay

The trend toward consolidation in the window and door industry is going strong and gaining momentum. Almost overnight we have seen regional manufacturers become part of nationally recognized organizations. This trend is creating a highly competitive environment for large manufacturers who are competing aggressively with high-volume distributors and mass merchandisers for business opportunities.

But amid all this activity, what is happening to our small and medium-sized manufacturers? More than others, these companies are feeling the pressure due to price wars and economies of scale in manufacturing. With large distributors dictating price, demanding advertising allowances and requiring consigned inventories, the smaller manufacturers are losing their ability to compete.

But, there are ways for the smaller manufacturer to remain competitive and profitable despite this difficult business climate. The key continues to be differentiation, creativity and innovation. Over the past decade, the most common points of differentiation included changes to window substrates (from historical aluminum or wood windows to vinyl), low-E glass, warm-edge spacers and inert gases. However, these options are no longer unique points of differentiation, as these product alterations have become prevalent throughout the industry. Since energy efficiency is one of the primary concerns for homeowners, offering these products is no longer an option, it has become a must. And, in light of our strong economy, today’s homeowners have the capital to demand and invest in energy-efficient upgrades. (For more info about consumer energy efficiency programs see March 1999).

Product and market differentiation is easy to accomplish with the variety of options currently available and the innovations in our industry. Keeping up-to-date on the newest glass options, exotic gases and more productive, cost-effective means of manufacturing, will allow the small window producer to get a jump on the industry. Being smaller often results in the ability to move faster than much larger competitors. With many distributors and mass merchandisers looking to be the first to introduce new and innovative technologies, this can be a major advantage for the smaller manufacturer.

Glass is one of the primary components to consider for differentiation. Next generation low-E’s, as well as new reflective and tinted coatings offer versatility in managing thermal performance and light transmittance. Third generation warm-edge products, exotic inert gases, and unique, creative glazing options such as triple- and quadruple-insulating glass systems also will provide a unique marketing edge.

Along with unique and upgraded components, the small manufacturer needs to search out new ways to improve upon manufacturing efficiencies. Large window manufacturers typically gain economies of scale that are not obtainable by the much smaller manufacturer. This, in turn requires more creativity in searching out ways to cut costs. An alternative method for productivity improvement is to incorporate separate manufacturing steps into work cells. For instance, combining insulating glass production with in-plant glazing can result in reduced costs, as well as increased productivity and flexibility.

The smaller manufacturer that provides these types of industry innovations likely will have a better chance to remain independent and competitive. Bigger does not always mean better, and the smaller manufacturer that stays on the cutting edge of industry evolution will not only produce high quality, high performance products, but profitable ones as well.

Clark Halladay is the sales and new business development manager for TruSeal Technologies Inc. of Beachwood, OH.



Copyright 1999 Key Communications, Inc. All rights reserved. No reproduction of any type without expressed written permission.