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issue: August 2005 APPLIANCE Magazine

Appliance Line - Editorial
Is There Room For Tradition?


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Lisa Bonnema, Editor

In a time of cutthroat competition and international acquisitions, one questions whether or not a regional player can survive, let alone a family-owned, small manufacturer.

Recent events in the appliance industry have led many to speculate that if youre not global, youre not going to make it. Weve all been scouring the papers daily to follow one of the biggest changes happening to the appliance industry in years-the Maytag acquisition. Because so many have taken it upon themselves to dissect the issues at Maytag, Ill spare you the redundancy.

However, I cant help but ponder the fact that if a major U.S. company is struggling to stay profitable in todays marketplace, what about all of those small, niche players that have roots deeper than the industry itself? A brief look at current market shares might indicate that these guys have little chance, and thats not including the influx of international entrants that are shaking up the marketplace. But I wouldnt write these small guys off so quickly. Theyre obviously doing something right.

Just ask Blake Woodall, director of Sales at Vent-a-Hood, a 72-year-old maker of ventilation hoods based in Richardson, TX, U.S. As you can imagine, hell be the first to tell you that his company, which was started by his great uncle and father, isnt going to disappear. While Mr. Woodall admits that he is obviously biased in that statement, he does believe he can objectively look at Vent-A-Hoods position in the marketplace and where its strengths lie.

I would say that generally speaking, with a family-owned business, there is going to be a much greater concern about quality and the design, things that may be important and a priority for a corporate group, but not quite at the same level, he says. The family-owned businesses normally have the highest regard for quality because they have grown up with that and have that in their history. Although I have four brothers, Im Vent-a-Hoods younger brother also. It was here before I was. I grew up with it and know a lot about it, and it has become kind of second nature that I know this category.

In fact, Mr. Woodall believes that out of the 30 players in his segment, Vent-A-Hood holds the top position in the premium hood category in terms of volume and quality. Those who know anything about ventilation, he says, know Vent-A-Hood quality is hard to match.

As an employee of a family-owned company, I can say there is some truth to the theory that small can mean better. As I hope many of you know, our publication prides itself on quality, and we refuse to accept anything else. Every company says this, I know, but I can tell you personally that this is one reason I have stayed at Dana Chase Publications. While many trade publication conglomerates churn out magazines, articles, and even editors as quick as you can turn this page, the Chases have always focused on their core competency-the appliance industry-because that is what they know best. More than 60 years of experience is a value we enjoy sharing with our readers.

Thats not to say branching out into other segments is wrong. According to Mr. Woodall, companies just need to be careful of how they do it so that they maintain their image and quality standard. For instance, Vent-A-Hood is credited with inventing the ductless hood, but does not make the product. It owns the patents and invention rights to this appliance, but has never sold one unit. Why?

We felt like that would be a ventilation standard that was lower than the integrity of this company, Mr. Woodall admits. We were building a reputation on ventilation that was the highest standard. Although it had a standard reasonable for some customers, it was not a standard that we could put in our product line and develop the type of reputation that we wanted for a long-term company.

And third-generation management stands by that theory. Over the years, the company has turned down many acquisition offers and has strategically refrained from moving into what it calls packaging. Mr. Woodall explains: Packaging has always had a stigma attached to it. It was the low-end way of buying your appliances. Common sense dictates that quality and effectiveness of a product is going to require much trial and error and, therefore, [consumers] are going to know that most companies that have a specialized expertise for a period of time seem to have products that are more credible than those of a broad grouping.

Mr. Woodall goes as far as to say that his company doesnt want to compete against someone like SubZero any more than it wants to compete with him. Trying to make a range hood and compete against a group that has been in business for 70 years like us, or make a range that competes against Thermador or Wolf and those that have been is business for many, many years…thats where your problems develop in these type of industries, he says. Simply put, you just cant match them.

So maybe the place for small players is the premium segment? Perhaps. But I do think the major players have something to learn from all of this. As more and more mass market manufacturers try to beef up their high-end products to improve margins, this is obviously something everyone should think about. In fact, all this talk about the middle range disappearing might be hogwash after all. Developing premium products, it seems, may not be as easy as it appears.

In my opinion, the lesson here is to not disregard the importance of roots. Tradition is the basis for many companies still active in todays appliance industry-Dacor, Wahl Clipper, U-Line, Sub-Zero, Weber-Stephen Products Co., Bard Manufacturing, and Goodman are just a few. You can even turn to pages 62-70 of this issue, and read all about the Fumagallis and their 60 years of success with Candy, one of Europes top appliance makers. I believe that consumers still value roots, and they like the quality and trust that comes along with that. Companies need to be careful that they dont loose their footing by trying to eat up market share.

Maybe the even larger lesson is to check your ego at the door. Dont underestimate anyone-new or old. Although we can all point to examples of those who have done it right in terms of innovation, efficiency, and strategy, theres always someone out there trying to do it better. James Dyson has made quite a splash in the floor care world, and hes just one man.

Still, the reality is that there are an awful lot of acquisitions and product expansions happening in this industry, not to mention players with huge product portfolios entering the marketplace. So I turn this over to you: can one appliance maker make the best of everything? Mr. Woodall says no. Id be interested to hear what some of you think.

 

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