Tractor Supply Competition
Now Viewing Tractor Supply's competition in: Building Material Supply
Call Preparation Questions
Customers, Marketing, Pricing, Competition
How much of the company's business comes from consumers, commercial contractors? - Large chains have expanded rapidly in recent years by focusing on the home improvement market, with contractor sales as a sideline.
Does the company specifically try to appeal to women? - A national survey commissioned by Lowe's finds the number of women homeowners who consider themselves do-it-yourselfers continues to grow.
What types of marketing does the company use? - Consumer-oriented merchants use typical retail marketing such as TV, radio, and print ads, direct mail campaigns, and special sales events.
How does the company compete against large retailers? - Large retailers often offer the lowest prices, but smaller companies may offer more services or region-specific products.
Does the company offer any special services for contractors? - A large percentage of contractor business is based on credit.
Does the company depend on a few large customers? - Contractor-oriented companies establish and maintain long-term relationships with local builders and contractors.
Competitive Landscape
Demand is driven mainly by residential real estate construction and renovation. The profitability of individual companies depends on merchandising and customer service. Large companies enjoy economies of scale in purchasing and have the ability to offer more products. Small companies can compete effectively by catering to contractors, by offering specialty products and services, and by serving areas unattractive to larger companies because of limited customer concentration.
Business Challenges
CRITICAL ISSUES
Volatile Supply Prices - Although price increases can often be passed to consumers, building material and supply dealers that maintain large inventories can be hurt if prices move sharply. Lumber prices, especially, can be volatile, affected by changing demand, domestic supply, and imports from Canada. Lumber prices can change significantly in just a couple of months. Import disputes between the US and Canada increase the uncertainty of supply.
Cyclical Industry - The building material and supply industry is highly cyclical, depending on the level of new home construction, improvements, and repairs, and the volume of home sales. Homeowners and contractors are more likely to buy building materials when housing starts and home sales are increasing. Repair and remodeling are somewhat less cyclical than new construction.
Industries Where Tractor Supply Competes
- Retail
- Home Improvement & Hardware Retail
- Agriculture
- Agricultural Support Activities & Products
- Consumer Products Manufacturers
- Consumer Services
