Principia Consulting

Strategy Consulting for Companies
in Materials-Related Industries

Building Products

CASE STUDIES

Valuing Exterior Trim

New Facility Justified?

Downstream Integration

Launch New Wallboard

Improving Wood Products

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Building products are booming, but with some companies doing far better than others. Shifting channel dynamics are playing a big role across almost all product categories, as imports, raw material supply issues and consumer tastes combine with other forces to make this one of the most dynamic industries in the world economy today.

The most successful companies are finding ways to innovate, to add new kinds of consumer and builder appeal to their products and services, and to anticipate and counter competitive moves better than companies that are just getting by.

Principia Partners is expert at helping position companies in the building products industry and related markets, and in helping them select the right moves from among a wide range of new business growth opportunities.

The Principia Partners Advantage

Our business consulting programs for the building products industry provide a range of proven ways to measure performance and establish solid strategies for managing and growing the core business. These custom tailored programs are created to directly support specific business objectives.

Principia consulting teams provide highly efficient problem solving. Combined decades of industry experience and the right mix of expertise serve as a foundation for exceptional results in solving business challenges, and can mean better results for your business.

Faster results to help you grow, extend or transform your business sooner
A short and painless teaching curve at the front end of consulting assignments
Sharper insights based on our focus on building products and specific industry experience
A unique industry perspective that can help change or confirm internal biases
Specialized information, experience, expertise and insights that lead to better decisions

PRODUCTS	MARKET CHANNELS / SEGMENTS	CONSULTING SERVICES
Ceiling Panels Cladding Decking Dimensional Lumber Drywall Exterior Trim Fencing Flooring Hardware Insulation Interior Trim Millwork OSB / Plywood / MDF Pipe / Conduit Railing Roofing Siding Windows / Doors	Master Distributors / Wholesalers Specialty One Step Distributors Lumberyards Co-operatives / Buying Groups Big Boxes / DIY Retailers / Dealers Direct to Builder / Installer New Construction Remodel and Repair	Opportunity Screening Market Assessment Innovation Strategy Profitable Growth Program Manufacturing Cost Analysis Product Positioning Competitive Strategy Intellectual Property Channel Strategy Customer Satisfaction Brand Equity M&A Advisory Services Business Planning

INDUSTRIES SERVED

Building Products

Plastics

Specialty Chemicals

Private Equity

Manufactured Goods

PRINCIPIA SERVICES

Principia helps business grow by providing consultation, insights and recommendations related to key business and marketing topics, including:

Opportunity Screening

M&A Advisory Services

Market Assessment

Innovation Process Strategy

Profitable Growth Program

Cost & Profit Benchmarking

Product Positioning

Competitive Strategy

Intellectual Property Licensing

Channel Strategy

Customer Satisfaction

Brand Equity Measurement

Business Planning

Building Products:
Due Diligence for Acquisition of Synthetic Residential Exterior Trim Producer

Challenge:
A private equity investor group needed a detailed business analysis of an acquisition target’s synthetic exterior trim business.

Principia provided the client with an in-depth understanding of the market dynamics, and the adoption curve for residential exterior trim. The key question was: Would the target likely provide long term growth and value sufficient to justify a high-multiple purchase price?

Analyses included market size and growth projections, product and pricing features within the category, the competitive landscape including relative manufacturing economics, as well as market channel evaluation.

Result:
The Client received accurate insights into the target company to determine the best valuation and bid price for the property.

Building Products:
Manufacturing Cost Benchmarking for Laminate Flooring

Challenge:
A leading flooring manufacturer entered the North American market for laminate flooring through a supply relationship with a European producer, and needed to determine if a North American production facility was justified.

Principia Partners analyzed the production costs for each of the major domestic producers and for the two key processes used. Principia further developed pro forma analysis for the "next generation" process for flooring production and provided accurate estimates of the cost to produce.

Result:
The Client determined that its position is best served by maintaining the European supply relationship and continued its supply partnership.

Building Products:
Quantifying Brand Equity for Composite Decking

Challenge:
In the rapidly evolving market for composite decking, the Client found it difficult to maintain pricing discipline and to differentiate itself among an ever-growing array of competitors. What value did the brand represent in the marketplace?

Principia designed and conducted a program to pinpoint the reasons that customers selected various decking products, and the perceived value of each product feature, including product brand. The analysis was conducted separately for each key customer type: retailer, contractor, and homeowner. These statistical techniques provided very accurate insight into the actual purchase decision processes, and results were used to tailor product, pricing, and marketing strategies.

Result:
The company gained an accurate measure of price sensitivity for its product relative to key competitive products, and set a pricing strategy to yield the greatest share while maintaining margins. The company also refined its marketing materials for both distribution channels and end users (i.e. contractors, homeowners) to focus on those factors of importance to each group to further support its positive image in the marketplace.

Building Products:
A Competitive Strategy for Flooring Adhesives

Challenge:
A leading producer of commercial flooring products required an in-depth understanding of its competitive positioning in flooring adhesives.

Principia developed a program to evaluate the business activities of three floor covering adhesive competitors to reveal the best business options for value creation and business growth.

Principia provided the Client with an in-depth assessment of the strengths and weaknesses of competitors, including coverage of their R&D, sales and marketing, manufacturing, and distribution resources. The program included detailed channel analyses and cost economics analyses of the competitors' production facilities.

Result:
The Client effectively modified its business approach, including its customer segmentation schemes and a reconfiguration of customer support resources.

Building Products:
Competitive Repositioning for Windows and Doors Manufacturer

Challenge:
A leading manufacturer of windows and doors was developing a strategy to reposition portions of the business to better serve key segments of their market. To plan properly, the company required a detailed understanding of their competitors' strategies in order to predict their response to the new marketing programs.

Principia designed and executed a program to evaluate all aspects of each competitor's business, and to clarify the best strategic moves.

Result:
The Client repositioned itself by introducing new product lines for previously unserved segments, taking advantage of weaknesses in the competition's product line, channel strategy, and cost position. The Client adjusted its level of support to specific distribution channels based on economic value generated from that specific channel.

Building Products:
Identify Customer Expectations for a Stucco Manufacturer

Challenge:
In support of its entry into the stucco products market in California, a French building products company required an assessment of customer expectations of suppliers.

Principia designed and conducted a market research program to identify the support services of greatest importance to customers, including building products dealers and stucco contractors. Principia then surveyed a cross section of the market to provide the company with concrete recommendations for minimum service levels on delivery, lead time, packaging, technical support, and other factors of interest.

Result:
The company incorporated Principia's recommendations as part of its marketing and operations plan, and worked hard to surpass the benchmark performance levels. Within two years, the company gained a 14% market share in the highly competitive market.

Building Products:
Entering the Dock and Seawall Business through Acquisition

Challenge:
A leading aluminum company was interested in integrating downstream into value-added segments of the fabricated aluminum market. The company had identified the dock and seawall market as an attractive area, and needed help identifying acquisition candidates that represented a good strategic fit.

Principia first provided an overall market assessment to confirm their interest in the market. Principia then identified more than 250 companies active in the business, and screened the candidates to reach the 50 most attractive targets. Principia then provided a comprehensive evaluation of these acquisition candidates, of whom several were selected for their ability to collectively form an entity with national coverage and a complete product line.

Result:
The company made its first acquisition, and is following an aggressive plan to roll up other acquisitions as part of its national commercialization strategy. Annual sales are targeted at $250 million within three years.

Building Products:
Assessing the Market for Moisture-Resistant Wallboard

Challenge:
A leading building products producer required a thorough understanding about its likely success in launching a new moisture-resistant wallboard product for critically wet areas.

Principia designed and implemented a customer value program to first determine the product and service features important to customers, and then investigated the value received by customers from these attributes.

Result:
Principia assessed the company's performance across all potential specifiers and users for these factors and determined likely potential penetration of the new product.

Building Products:
Identifying New Opportunities for a Chemical Producer

Challenge:
A leading chemical producer was assessing how acetylation technology could be applicable for a variety of wood building products, including those used in residential, commercial, and infrastructure end uses.

The company required a feasibility assessment on the best roll-out strategies for the technology as well as how to best secure specification in existing pressure treating facilities.

Principia evaluated a number of business scenarios to determine best product positioning and pricing options to reach maximum revenue and profitability targets over the next five to seven years.

Result:
Based on Principia's recommendations, the Client has begun next steps in its product development process.

Building Products:
Screening a Fast-Growth Market for a Large Additives Company

Challenge:
A leading international supplier of plastics additives developed two products to improve physical properties and aesthetics for Wood-Plastic Composite products for decking, railing and fencing applications. The additives help manufacturers improve their products without sacrificing manufacturing throughput.

The Client required an assessment of the business opportunity for this technology to advance its own manufacturing technology to the next stage of commercialization.

Principia assisted the Client with a product entry strategy including possible pricing levels and the likely adoption curve for the products at potential users.

Result:
Pilot programs are in place at several leading WPC producers.

Building Products:
Finding New "Windows" of Opportunity for Extruded PVC Profiles

Challenge:
The strategic plan for a major supplier of profile extrusion to the fenestration industry called for the development of two new markets to reduce dependence on its volatile core market.

We first assessed the Client's process capabilities and design, sales and support skills. Screening criteria were then developed to identify attractive markets. Over 170 applications for extruded profiles were identified, which Principia evaluated against the criteria. Each market was ranked according to market factors and the Client's competencies. Entry strategies were developed for eight highly attractive markets that fit the Client's capabilities.

Result:
The Client pursued three target markets and successfully launched new products for one of them, increasing total revenues by $10 million in two years.

Building Products:
Product Introduction Strategy for Reflective Films

Challenge:
One of the world’s largest suppliers of window and industrial film products needed a clear strategy for introducing a new product line.

Principia assisted in developing this important marketing and product introduction strategy. A comprehensive plan was developed to introduce the new product line, which utilizes technology to more economically create metallized flexible polymeric films made with sputtered exotic metals such as stainless steel, titanium, copper, and silver.

Result:
The program was successful, as the company introduced a highly successful reflective film product line in the building and construction industry.

Building Products:
Positioning Window Glazing to Surf the Storm Surge

Challenge:
The leading supplier of polyvinyl butyaryl (PVB) asked Principia to help position the product for hurricane-resistant glazing to meet the criteria of new coastal region legislation.

Principia interviewed many of the leading window manufacturers to determine their interest and specific programs around this market development, and how they were addressing the need. A product repositioning strategy was developed to properly introduce the Client's product as an interlayer solution to this market.

Result:
The client has furthered its leadership position in PVB film, a result based largely on following Principia recommendations.