INTEGRATING END USER SUPPLIER AND INVESTOR SERVICES

The following example illustrates the desirability of integrating end user, supplier, and investor services.

The Need to Integrate End User, Supplier, and Investor Services

Two technical issues were selected. Membranes are replacing sand filters at drinking plants throughout the world. But membranes are more expensive. Also automatic back wash filters are a third alternative. It is important to operators to know the advantages and disadvantages of the various technologies.  The penetration of each technology is the key revenue driver for the product suppliers. No supplier is equally positioned in each product. So the technology will affect market share. Furthermore the profitability of the individual suppliers and therefore stock value will also be impacted by the technology comparisons.

Another example is that of cooling towers in the power industry. Dry cooling doubles revenues for tower suppliers and also creates substantial revenues for fan manufacturers. However it eliminates sales of pumps, water treatment equipment and chemicals. It is therefore clear that proper assessment of technology is necessary for end users, suppliers, and the investment community. A supplier who can expand his effort through the revenue base from all three segments will do a better job of serving each.

Chart 3 indicates how the various McIlvaine services are useful to the 3 types of clients. The newsletters and abstracts are of equal value to end users and suppliers. “Consultants by Phone” is primarily set up for the end users but the suppliers benefit in that better advice means better products and more profits for the better suppliers. Investors can also benefit from the niche expertise. The market reports benefit both supplier and investor (or investment banker).

Chart 3: Integration of Services