Increased acquisition activity in wholesale distribution should be making owners and executives at distribution companies reconsider their strategies for industry consolidation. Distributors need a strategic plan for their business that recognizes the reality of consolidation yet maintains a focus on profitable growth.
Our research and consulting from the last major consolidation cycle of the 1990s provides insight into the three basic strategic options for independent distributors in today’s environment: get big, get focused or get out. All other strategies are ultimately variations on these three options.