In a nutshell, here are their observations about our $196 billion foodservice distribution industry, which is comprised of nearly 6,000 company-locations.
Well run megadistributors have six success factors:
They cover wide distribution areas
They are able to obtain "economies of scale"
They have well trained sales armies
They have procurement power
They are financially able to provide value- added services to their customers
They have the financial strength to keep getting bigger
By contrast, smaller independents, according to comments made by their executives in stories in ID Report, have three ways to compete in distribution:
Long Term relationships: Many small distributors have prospered through the strength of their historical relationships with operators, but that method alone won't bring in new business.
Economies of scale: The ability to accumulate buying power is why it is imperative for small distributors to belong to marketing group. These groups can provide the marketing services, procurement strength and sales training services that an independent could not achieve alone. The networking opportunities are replete with business-building intelligence.
Outstanding service: This means being so close to the customer that you can anticipate what they will need. It means knowing how they think; how they buy; what they fear; what their top daily frustrations are; what makes them mad ... and then doing something about it.
How to Fight Goliath - and Win
Several years ago I read a great book called Customer Driven Growth