Adding Value and Differentiation

In a Competitive Market, It’s Tough for “The Little Guy”

By Eric Thompson

Earlier in the summer, DWM provided some detail around what it called “merger mania,” and the ongoing consolidation of some of the door and window industry’s most notable names. In the article, DWMtook note of the continuing acquisition of window brands by either larger building and construction brands or private equity firms. “A lot of highly successful companies are continuing to place large bets on the future success of the building and remodeling industries,” notes mergers and acquisitions (M&A) expert Michael Collins in the article.

Now, I’m no M&A expert myself, but I think there are a few factors hitting the fenestration industry right now that may correlate with this trend. The rising cost of raw materials has caused a bit of a squeeze for independent window makers, while bigger, vertically-integrated buyers have a bit more leverage when it comes to negotiating on some of those prices. Meanwhile, the price of standard windows has stayed relatively flat over the past several years, with manufacturers exploring different avenues to grow their margins. One technique is to grow market share through mergers and acquisitions.

Embracing Alternate Colors

For the independent window manufacturer, I think the way forward lies in continuously adding new value and finding new ways to differentiate. And in today’s marketplace, there’s an increasing variety of ways to do just that, helping to grow margins and drive business forward.

It’s no secret that vinyl windows have achieved market dominance throughout the residential window space for their versatility, energy performance and more. But one of the ways that some window makers have begun to differentiate in the past decade is through offering new in-demand color choices. The convergence of increasingly high-quality vinyl compounds and long-lasting color technology has made it easier than ever to offer end users that “wow factor” for their spaces.

And there are a variety of ways to go about making colored vinyl windows. There are the traditional options, such as painting, of course. But in an industry where plant floor space is at a premium and finding extra workers for an ancillary task can be difficult, adding one or more paint lines can come with a few extra headaches. Newer technologies, such as color co-extrusion, eliminate that extra step in the production process, allowing window makers to fabricate finished products with a variety of colors right away.

Achieving High Performance

Across the industry, high-performance doors and windows matter more than ever. Even with Energy Star presently on the backburner.

For example, I had the occasion to speak with a multifamily housing developer at a conference earlier this year who was working on a new property in Miami, Fla. He explained that he wanted to utilize vinyl, which came as something of a surprise, considering the strict impact codes that govern the Miami marketplace. Designers and developers tend to attack those requirements with steel or aluminum. His rationale was simple: He wanted the thermal-performance and energy-efficiency benefits that vinyl could provide.

It’s not just thermal performance either. Sound control, for instance, is becoming a hotter topic in markets where sound pollution might be a challenge for residential occupants—think New York City. Meanwhile, increasingly strict codes and standards are driving all areas of high performance. I’ve heard plenty this year about Passive House, a new building standard based out of Germany that takes total building comfort into account—everything from insulation to air ventilation and, of course, doors and windows. Manufacturers looking to further differentiate in the marketplace can seize an opportunity here.

Strategic Outsourcing

Earlier this year, DWM shared some tips from a few of my colleagues for a feature story on today’s modern window plant. Yes, automation is the most easily identifiable way to boost production, improve quality consistency and maximize your labor. But another is to carefully consider what is worth keeping “in house.” Doing it all yourself these days isn’t easy. And out-sourcing something like your window screens from a strategic supplier can help you cut back on intensive labor costs. It also leaves you freer to pursue other ways to build added value into your products. Today, that’s more important than ever.

Success in the modern fenestration industry means keeping your eyes on the future and doing things differently than you—and your competition—have always done them. Or, risk being left behind.

Eric Thompson is a national account manager with Quanex Building Products.

To view the laid-in version of this article in our digital edition, CLICK HERE.

DWM Magazine

Leave a Reply

Your email address will not be published. Required fields are marked *