Husqvarna Reflects on 2010 Dealer Channel Sales Growth

In a story posted on earlier this spring, we reported on Husqvarna’s dealer channel sales growth in 2010. However, dealer sales were not enough to offset a reduction in mass merchant-sold product.

In a Q&A with Mike Jones, Husqvarna president of North American and Latin American operations, we learn about a change in their contract with a mass retailer as well as how they have improved distribution and plan to grow with their independent dealers.

Q: In the Husqvarna annual report it says the reduction of mass-merchant product sales was due to losing part of a contract with a major retailer. Why did this occur?

A: Retailers, at times, change their sourcing behaviors. In this instance, we decided to pull an opening price point tractor since most consumers were opting for tractors that had more options and features.

However, we continue to support all of our customers and channels of distribution through innovative products, a lean and efficient supply chain, strong brands and excellent customer support.

Q: Part of the company’s success in 2010 was attributed to the highly efficient distribution network and reduced costs. What changes were made in distribution that made it more efficient and cost-effective?

A: We have consolidated and streamlined our distribution and manufacturing facilities globally and in North America. We have also invested in new infrastructure in parts and other areas of our organization. We also continue to invest in the Husqvarna Operating System (HOS), which is Husqvarna’s version of LEAN manufacturing. This has allowed us to become leaner in our distribution and manufacturing.

HOS is our global supply chain system, a defined strategy that has started in the manufacturing organization and is progressively being expanded into the whole supply chain and Husqvarna Group.

Specific examples of changes in the infrastructure include employee training workshops, plant assessments and certifications, and an ongoing review process designed to reduce accident rates, increase flexibility, reduce environmental waste, increase our fill rates, manage materials and increase productivity.

Q: Also credited for the sales growth was an increased market share in key product categories. Which categories saw an increase in market share and how was it achieved?

A: We have worked to increase our share in professional products, like zero-turn mowers. We have introduced two new zero-turn mowers. The PZ and P-ZT provide value and performance; two key features our customers value. We also market a full complement of handheld products for commercial customers, and have enhanced our support in areas like technical training, our contact center and trade marketing.

Q: Did Husqvarna set out to increase market share among professional users instead of homeowners?

We didn’t choose one customer over the other, we identified key categories that are important to each end user and continued to develop those products in meaningful ways based on user/customer needs.

Q: A reason given for dealer channel sales growth was the recruitment of new dealers. Is Husqvarna choosing to rely more heavily on the dealer network and will you continue to recruit more dealers?

A: While we support all of our customers and sales channels, our independent dealers are central to our success and our sales growth. We remain committed to growing with our dealer partners via product investment, and by providing the support tools necessary for our joint success. We expect to grow with our existing dealers by gaining share first, and then will look to expand as it makes sense.

We are always looking to add new dealers; recruitment is an ongoing process for Husqvarna. When considering new dealers, we look at multiple market indicators to identify which markets are under-represented such as sales broken down geographically. We also look at our competitors’ presence in each market.