State of the Industry
than there were just two years ago.
Furthermore, coatings suppliers are
facing this hyper-competitive environment with less resources and an
increased urgency to grow. Balancing
these contradictory forces creates a
significant management problem.
Orr & Boss recommends that a structured, methodical approach to market development be employed.
There are three key steps to this type
of strategic market development:
• Market Assessment;
• Opportunity Analysis; and
• Strategy Development.
Successfully using this type of
process will not only greatly increase
the probability of success, but will
prevent precious resources from
being wasted. These steps are depicted below in Figure 1.
Many coatings companies have
been able to successfully operate
within their strict market boundaries. They have grown by selling
their existing products and services
to their current customers. There has
been no need to go outside their comfort zone. The new reality is that
they may need to expand in new market areas. To do this effectively
requires Market Assessment. A company must understand the market
structure and dynamics to have a
chance at success. They must also
fully understand market needs, the
technology requirements and the
competitive landscape. Armed with
this information, coatings suppliers
can identify those segments of the
market that are most attractive to
them and where they have an opportunity to be successful.
Once potentially attractive seg-
ments are identified, an Opportunity
Analysis needs to be conducted. This
type of analysis is used to more fully
define the requirements of a given seg-
ment, what makes competitors suc-
cessful in the market and to identify
gaps in a company’s offering. It is here
that a potential supplier must fully
define their potential value proposi-
tion to prospective new customers. An
additional component of a well execut-
ed Opportunity Analysis is a quantifi-
cation of the market opportunity.
SUMMARY
The global recession of 2008 and 2009
has had a tremendous impact on the
coatings market and has resulted in a
decline in market volume and value.
This impact has been particularly hard
Figure 1
in Western economies. Virtually all segments—decorative and industrial—
have been negatively impacted. The
good news is that the market now
appears to be in recovery. However, this
recovery will be uneven in terms of
both geography and market segment.
Furthermore, the recovery will be
nowhere near as dramatic as the
decline. It will take the market several
more years to return to previous levels.
This slow and uneven growth makes it
essential that coatings suppliers make
the most out of the limited opportunities that exist in the marketplace.
Companies that are able to execute a
well planned market development
strategy will be the winners coming out
of the decline and will be in the best
position for long term prosperity. CW
About the Author: Scott Detiveaux is a
senior consultant with Orr & Boss, Inc.,
a U.S. based, international management consulting firm that specializes in
the global specialty chemicals and coatings industries. Mr. Detiveaux is the
project manager for the recently published IPPIC global coatings market
study report referenced in this article.
