Stone & Associates, Inc.

Market Analysis and Business Intelligence

Small and Mid-Size Manufacturers (SMM) Practice

Increasingly, companies are trying to expand the market for their products by targeting smaller companies, particularly manufacturers. However, small and mid-sized manufacturers (SMMs) behave and purchase differently than large companies. As a result, this market cannot be approached in the same way as large company buyers. Stone & Associates provides in-depth market intelligence and strategic guidance to companies interested in growing their business in the SMM market.

Stone & Associates is already one of the foremost experts on SMMs, having completed a series of groundbreaking studies on this market, over the past eight years, for the National Institute of Standards and Technology - Manufacturing Extension Partnership program (NIST-MEP).

However, we have developed an important new research tool – the Market Research Panel – that allows us to provide unique, in-depth market knowledge about SMMs. The Panel provides a unique window into the decision-making of executives in small manufacturing firms.

Market Research Panel

The Market Research Panel is a group of manufacturing executives in small and mid-sized companies, contacted on a regular basis to gather information on their challenges, needs and buying habits. The Panel was established by Stone & Associates, along with the 360vu Research & Education Foundation.  (The Foundation is a non-profit affiliate of the Manufacturing Extension Partnership, whose mission is to maintain the U.S. manufacturing sector as the most technologically advanced, innovative and competitive in the world.) The Panel can be used to identify and understand trends and behavior of small and mid-sized US manufacturers—today and into the future.

The Research Panel is a highly effective mechanism for capturing in-depth market intelligence from Executives in smaller firms, who are difficult to contact at all, much less capture meaningful information from. The Panel currently has 100 members, although it continues to grow and is targeted to have several hundred members over the next two years. These executives will be a primary resource in providing the market information required for suppliers to develop, sell and market the next generation of products and solutions that enhance innovation and competitiveness for small manufacturers.

Why SMMs are Different

SMMs vary considerably in terms of management attitude and behavior. Our research has led us to see the SMM market as segmented along several dimensions, which makes it easier to understand their behavior, potential buying habits, and how to sell to them. As shown in the examples below, we call these two dimensions “Progressiveness” and “Adaptiveness.” Progressive companies are proactive; they have a track record of making improvements, and a game plan for future priorities. The most sophisticated progressive companies, Advanced companies, are approaching world class in their ability to keep pace with leading technologies and processes. Adaptive companies anticipate, prepare for and rapidly adjust to market changes; they are outward- and future-oriented, embrace change and focus on building and maintaining competitive advantage.  Adaptive companies have the greatest chance of continued success, because they can adjust to changes in the competitive environment. Progressive and Adaptive companies are more likely to initiate business improvements, invest in new markets/products, and purchase outside services.

On the opposite end of the spectrum are Disengaged (non-progressive) companies, which are less likely to invest in business improvements, and non-adaptive companies, which are unlikely to grow over the long-term because they are not planning for and investing in the future, and are less able to adjust to market shifts. Disengaged and non-adaptive companies are less likely to make investments and improvements in the business, and less likely to purchase outside consulting and other services.

Strategic Market Analysis

Our strategic market analysis and business intelligence services are designed to help clients make critical decisions about market or business strategy, including competitive positioning, product plans, new markets, channel management, sales and marketing approaches, brand management, pricing, and service levels. To make these decisions, we deliver key information about customer requirements and competition, with emphasis on key drivers and market trends that propel change in a business. We have particular expertise in understanding the economics of different players in an industry or supply chain, which determines how they react to market forces. The economics of each player—competitor, end-user, channel partner, supplier—determines its buying behavior and strategy for achieving competitive advantage or capturing value.   

Market segmentation is at the core of our approach in these projects. We build a coherent “map” of the market and your competitive position in each segment. We characterize each segment in terms of size, growth, customer needs/wants, purchasing behavior and competition and describe changes in the landscape, such as developments in technology, shifts in product mix, channel developments, emerging segments and new competitors. We synthesize and organize all this information to generate insights and determine strategic game plans.

Strategic Cost Analysis

Cost/Profitability of Strategic Options

We help companies determine the most profitable direction by developing cost and profitability models of strategic alternatives. Our detailed models accurately capture the impact of each strategic option on key cost/profit drivers, and generate insights about the trade-offs of strategic alternatives. The models are detailed to establish credibility, but have clear implications for decisions and actions.

Supply Chain Total Cost Assessment

We help companies evaluate procurement and supply chain management strategies, by analyzing the total cost of procurement, acquisition and ownership of materials/components. In addition to material cost, our models incorporate costs related to purchasing department activities, inventory and warehousing, freight, engineering, and the costs of quality. 

We are experienced in identifying cost reduction opportunities through collaboration with suppliers in engineering and purchasing practices. We also help clients follow trends in eProcurement and web enabled supply chain management technologies that are critical in today’s environment.

Competitor Cost Assessment

We are one of the few firms that can develop a credible model of your cost advantage or disadvantage vs. competitors. Our detailed models can pinpoint and quantify cost differences and, most importantly, identify what drives those differences. Our models generally cover full cost per unit, including raw materials, manufacturing, distribution, engineering and SG&A. Analyzing total cost is critical for understanding the trade-offs of different strategies.  A competitor’s strategy may provide a cost advantage in one portion of the cost structure, but may result in disadvantages in other components of cost. The cost model can also be used to project future cost positions, and estimate competitors’ profitability.

Competitor Cost Assessment turns individual competitor datapoints into a coherent picture of the competitor, which supports strategic decision-making.