It was not that long ago that the behemoths of my industry, the Automobile After-Market were considered to be all-knowing. Before the crisis, the prevailing dogma in this world of giants was to follow each other, to not rock the boat, and that a label and design change “will do ya”. These notions once seemed self-evident to industrialist and their investors.
Well these industry giants have enjoyed exalted status for decades, or at least they did until the creation of Falken Industries Ltd, a small (market capitalization about $20,000,000) traded on the OTC, under symbol FLKI. This company, the brain child of a then 26 year old Norwegian woman toting her recently printed MBA from a top European school, quickly recognized the flaws of such rigid thinking and launched in 1997 a revolutionary concept targeting the waste of her giant competitors, which has today become a global leader, expanding the market and taking a progressively more important morsel of the competition’s market share.
The waste was what is today the singularly major market of FLKI; women. Today 57% of all sales of FLKI product conceptions, best known under the Clean Plus® brand, are women.
“The industry had gone astray, ignoring 92% of the market to concentrate on the world of the macho enthusiast, itself only 8%, leaving the balance for the taking; so that’s what we did” said Manuel Garcia, communications Officer at FLKI. Yet the industry continues to vigorously defend their creed very much as an alcoholic denies he has a problem.
Is it worth the thought? For these giants, the auto-care business handled by some far strewn subsidiary somewhere on the organizational chart represents a microbes’ portion of their business. This small incidence in their business in all cases a small fraction of 1% of sales, doesn’t merit the time of senior management or the impact that a capital injection might support. And so, big as they might be, they are, as evident, subject to assault by companies a fraction of their size.
FLKI management to their credit saw the trouble coming. Never falling prey to the herd mentality or to the scattershot findings of big shot industry gurus with no principles to show how to apply their convictions in the real world. It continued its quest for a different way to run an Automobile After-Market business targeting a market that no one addressed or wanted; women.
Little by little FLKI pocked holes in the prevailing theory. It was first to developed and grow a line of auto-care wipes, and its then revolutionary and currently amazing system for procurement ensured rising margins in a time of declining demand guaranteeing its dominance in difficult markets, this all while its competitors were raising prices, abandoning marginal markets, and losing market share. “We built our company on an understanding that the industry giants simply don’t know” added Garcia. The secret seems to lie in FLKI’s ability to study and evaluate markets. To catalog segments and activities and chart their fortunes over time, to categorize the market’s many players. That means identifying the various participants in any given market, and learning what kind of strategy is popular at a particular moment in time. “What is their biomass? How are they going to interact with each other? How are they going to interact with each other? Incredible as it may seem giants as they may be, FLKI competitors do not collect this kind of information. Yet, FLKI researchers argue that consumers adapt and will vary depending on their psychology at any given moment. Over time, tracking a wide variety of settings, FLKI is able to develop an extraordinarily good sense of how the consumer market will behave and target those conclusions with product development that hits the epicenter of growth in the industry.
While it cannot be determined if FLKI’s substantial global lead over its much larger competitors can continue, the company has already done what no one else has dared to do - propose a successor to the vaunted, but flawed industry dogma. It is clear however that the greatest lesson painted by the extraordinary success of this near unknown company (though its stock’s behavior seems to suggest that will change quickly) is that the industry should forego grand unified models for entrepreneurial and unpredictable ones, which of course is an incongruous fit into the Corporate America environment into which these behemoth subsidiaries are compelled to operate. Consequently it is a reasonable bet that FLKI will continue its global operations devoid of real and meaningful competition until that day when it too, driven eventually by the greed of a substantial offer succumbs and falls prey to the acquisition of a behemoth - management and shareholders crying for the loss of their independence all the way to the bank.
Author Resource:-
John David is one of the nation's most respected expert analysts on the Automobile After-Market Industry. He holds appointments as a covering analyst with some of the world's largest players. He also conducts a private practice as a consultant in capital raises, mergers and acquisitions for small to medium size manufacturers in the consumer, professional and industrial chemical, wipe, wet wipe and car and vehicular care industries.
Falken Industries Ltd OTC : FLKI is a diversified industrial conglomerate that operates in Chemicals, Wet Wipe and Biodegradable Technology. Falken Industries Ltd is the concept behind more than 160 products distributed through a network of global platforms and the recipient of trade awards for innovations, biodegradability and environmental and health quality standards.
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