Most Profitable Market Initiative for Valves
Table of Contents
- Proposed Initiative for Valve Suppliers
- The Most Profitable Market Program
- Each niche needs to be tied to a sales target
- Forecasting the sub-niche industries
- Validation through the media
The video description of MPM is shown at https://youtu.be/zPkphlA0KiM
Here is a link to the Power Point presentation: http://home.mcilvainecompany.com/images/mpm.pdf
PROPOSED INITATIVE FOR VALVE SUPPLIERS
The same level of value, detail and reliability as your cost accounting can be applied to market forecasts. These forecasts are for the Most Profitable Market (MPM) which is tied into the value proposition and ability to be among the top two suppliers to each market niche which is aggregated.
The program can be undertaken one niche at a time as part of a master plan or just as a demonstration.
It can just cover the forecasting portion or can include the validation. The attached articles appearing in Valve World are a small example of how the facts and factors can be gathered and used in your value proposition.
THE MOST PROFITABLE MARKET PROGRAM
The Most Profitable Market is an aggregation of selected niches.
- The $120 billion valve market is an aggregation of thousands of niche markets.
- The Most Profitable Market (MPM) is achieved by selecting those niches which are most appropriate.
- The size and requirements for success in each niche are determined by the relevant facts multiplied by the appropriate factors.
- The more shared facts and factors across products the higher the potential EBITDA.
- A niche network of facts and factors can be continually updated to provide revenues and other estimates used for the forecasts, and value propositions.
- Reliable forecasts can become the foundation of management strategy as well as use throughout the organization down to quotas in sales territories.
EACH NICHE IS TIED TO SALES TARGETS
Each salesperson can be guided by sales targets which may include a number of niches. Here are examples for a local salesman and regional manager.
Sub-niches for local salesman and regional manager for diaphragm valves.
Here is an example using Pharmaceutical AWE and the Pacific States.
California pharmaceutical Market as % of region, U.S. and World
The Pacific region has 14% of the U.S. pharmaceutical market and 4% of the world market. California is a major market by itself. It has 13% of the U.S. pharmaceutical market and 3.7% of the world market.
The pharmaceutical market in California is growing at 6% and will be the equivalent of 8% of the 2022 U.S. market in 2027. Note that by basing all future numbers as a percent of the 2022 market, the 2022 revenue number is all that needs to be inserted.
The market can be further segment to forecast the purchases by the parge prospects. Here is an example for Amgen.
Amgen will open the NC plant in 2025. It has plants in California and RI. Corporate offices are in California. Even if there is not an OEM accounts manager it is highly desirable to analyze how many valves for the RI plant and the NC plant will be purchased at the Thousand Oaks location.
In order to obtain an analysis of the Amgen purchases the starting point is the known direct sales. Added to this would be estimates of Perrigo and OEM sales. Mcilvaine already has an estimate of the total purchases by Amgen. So, the “other” segment can be calculated.
Amgen valve sales are estimated at $ 32 million and 1.92% of the world pharmaceutical valve purchases.
AMGEN BALL VALVE PURCHASES
The direct sales can be accurately tallied. Sales through a major distributor such as Perrigo can be estimated. So can those through OEMs. The balance can be derived by subtraction.
FORECASTING THE SUB NICHE INDUSTRIES
Even though there are 800,000 revenue numbers in the standard Valve report, each industry has to be further segmented as per the following examples.
The markets for each type of ore are segmented into processing and transportation. Some Companies pump slurry hundreds of miles to the coast for further processing and then shipping.
Lithium mining is a growing application where the markets for each process can be provided.
VALIDATION THROUGH THE MEDIA
Working with the media using the judicial format is recommended. Magazines can provide the body of evidence and litigator arguments (white papers, videos). There are vertical magazines such as Valve World and horizontal such as bioprocess online.
Articles with the facts and factors are shown in the attachments.
- Blood(V2): Various processes including blood plasma where the facts and factors include performance during thermal swings.
- Food: Many sub niches are covered along with easier installation and lower maintenance.
- Pharma: 12 facts and factors influencing valve cost of ownership are covered along with various processes.
- Hydrogen: Valve market forecasts are provided through 2030 by application type along with a list of suppliers.
Mcilvaine has provided this vertical coverage in Valve World. But the horizontal publications are equally good in terms of communicating the value proposition.
Bioprocess online has a formula close to the judicial approach which is so effective. There are magazines in food, mining, chemicals and other industries which can be utilized to validate the value proposition of the valve supplier.