Steel

SteelSituation: A regional wholesaler of steel products decided to capitalize on the price of imported consumer hardware. In addition, the company had realized that there existed a large market in the U.S. for anchor chain within the mining industry. The challenge was to use the same vehicle to capitalize on both opportunities.

Plan of Action: Develop a strategic alliance with an Asian firm that had U.S. contracts to dismantle ships and the existing manufacturing capacity to manufacture consumer hardware such as pliers, hammers, screw drivers, etc. It was decided that anchor chain would be imported tested and resold to the American shipping industry and that the company would also import hardware to sell to “off brand” locations such as drug stores, general merchandise retailers and others.

Results: Over a nine month period a strategic alliance and import Agreement was initiated that would facilitate the plan. Strategic alliances and Agreements were signed with low end distribution centers to sell the imported products. This resulted in:

  • First year’s sales of anchor chain of more than $2.2 million
  • First year’s sales of consumer hardware of more than $1.75 million to wholesalers
  • An offering from the Asian manufacturer to extend the types of numbers of products offered for wholesale U.S. distribution.

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