The global bearings market is fairly static with growth between 0-1% year-on-year with an estimated value of £27bn according to skf.com. They also state that the Industrial bearing market accounted for almost 40% of world demand with sales through distributors coming a close second at 30%.
Although fragmented, the highest growth market is China with their worldwide share growing to 30% – mainly thanks to a few international bearing companies accounting for a third of this market share. Other Asian markets with sizeable sales include India, Thailand, Indonesia, Taiwan and South Korea combining to create 10%. Japan alone accounts for a further 10% of the market.
So with strong competition from Asia who already account for 50% of the market, where does that leave the UK’s bearing companies? Is it possible to compete on a global scale.
We think so.
The UK bearing market mainly consists of SMEs but that is what makes the UK great. SMEs are flexible and can act fast in a turbulent market. Couple that with a rising demand for UK products and the platform for success is already there.
There are some inherent challenges though.
Sales professionals are given too much information
If you’re like most bearing companies, the majority of your sales will come from repeat orders through your salespeople. However, in this fast-paced market they don’t have enough time to analyze all the information to make informed selling decisions. For instance, do they know which customers have purchased ball bearing units but no bushes or which customers are gradually reducing spend on a certain brand? Having instant access to this level of information is vital for revenue growth, but most bearing companies find this difficult to achieve.
Reactive, not proactive
An SME should be fast-acting, so being proactive is a key strength. However, at sales-i we commonly hear companies are more reactive to the market instead. Being reactive is dangerous to a business’ survival as you’ll only take action when a customer has already decided to leave, a sale is already going to a competitor or you’re selling a product to an already saturated market. As mentioned in this SlideShare, 50% of sales go to the first salesperson to contact the prospect, so being proactive definitely makes a difference.
A need to break traditional processes
The majority of businesses in the bearings market have a long history and are well established. This however creates a problem – processes are rarely updated so are outdated compared to other markets, meaning you can’t compete on a level playing field. A slow billing process, clunky online ordering, utilizing multiple spreadsheets or manual data analysis to name but a few. These processes are costly and time-consuming – everything that will stifle business growth.
Too much emphasis on price
The Asian markets are so successful because they focus on driving down the price of products. They have lower overheads so can successfully chip away at prices this to achieve greater market share. The UK bearings market needs to focus on quality and exceptional customer service levels. As the western market moves away from manufacturing and more towards services, an emphasis on creating service levels that consistently meet expectations will be your differentiator. You need to keep your customers happy and make it difficult for them to switch to a competitor. After all, 80-90% of next year’s revenue will come from your existing customers.
As a technology partner to companies such Mercury, sales-i has been designed to specifically overcome the challenges outlined above. To find out how we do this, request a demo of our software and we’ll guide you on how to better compete in an increasingly competitive bearings market.