Bekaert Fencing

Part
01
of two
Part
01

Bekaert Fencing - Competitors

ArcelorMittal and WireCo is a company that manufactures fencing for the agricultural industry. ArcelorMittal stands out in the retail space through its wide range of trademarked products and the use of advanced technology in the production of its products. WireCo stands out in the range of items within each product category, each of which varies by weight, strength, and length.

ArcelorMittal

  • ArcelorMittal through its subsidiary WireSolutions has been operating in the space for over 50 years. Its fences are made with the highest quality and using sustainable materials. The company uses its own trademarked corrosion protection technology, 'Crapal coating'.
  • They also use the most advanced technology for the protection of the environment which they call 'Nature coating'. They also stand out in the retail space for other reasons.
  • Their fencing products are wide and varied. They include welded fencing, chain link fence, field fence, 'Dragon Estate WIRE', barbed wire, wire for electric fencing, and hexagonal netting.
  • ArcelorMittal provides galvanized welded fencing These include Sologne 4R, Sologne 4R for wild boars, Atak Heavy and Parco Crapal 2. Its field fence products include Prairie Medium and Prairie Heavy. In terms of their barbed wire products, their offerings include Torro, Scorpio, Rodeo B and Rodeo Crapal 2.
  • Lastly, other fencing products offered by the company are Avigal, Carrelux Annealed, and Quadra. All of these products are trademarked and are manufactured in the company's plants based in Poland, Luxembourg, and the United Kingdom.
  • The company does not have an online retail platform for its direct consumers. In 2018, their sales were made mainly from its US customers followed by Brazil, Canada, Mexico and Argentina

WireCo World Group

  • Through its subsidiary Drumet, WireCo World Group manufacturers and retails, among other things, fencing, galvanized and staple band and wire, as well as forest nettings. They have a wide variety of wires which are differentiated by strength and phosphate coating. This includes wires for technical springs, rope wire, plaited mesh, general-purpose, wire for technical springs and forest nets.
  • They also carry standard ropes that are made of steel strands. These are differentiated by length, weight, and strength. Examples of these steel ropes include the 1x19M, 6v19M — FC, and the 6x36WS — FC. They also carry specialized ropes for cranes and those used in forestry. The company has an online purchasing platform for suppliers but not for its direct consumers.
  • WireCo operates worldwide, they have sales and distribution regions in at least five continents including Australia, Asia, North American, South America, and Africa.

Research Strategy

We started this research by reviewing the website of Bekaert to get an understanding of their value proposition. We realize that the company has a wide variety of fencing products for the agricultural sector. We then searched through databases as well as the SEC. We assumed that the focus should be on the US and therefore the SEC would have reports from publicly traded companies that operate in the agricultural fencing space. Through SEC, we found ArcelorMittal and WireCo World Group. Both companies have operations worldwide, and provide fencing to various industries including agriculture. Their offerings cover different types of wire fencing and ropes used in agriculture and elsewhere. Information on the retail outlets that sell their products were not found, however, it was observed that the company does not sell directly to consumers. Therefore, we assumed that the use distributors or retailers to get the products to the market.
Part
02
of two
Part
02

Promotional Collaborations

While we were unable to locate sources that provided specific collaborations between fencing manufacturers (or farm equipment, tools, and firearms) and agricultural retail chains (Tractor Supply, Runnings, Rural King, Southern States, Blains Farm, and Fleet Farm), we did find some helpful insights about how Tractor Supply collaborates with their vendors in general to promote sales and marketing of products. Below we will outline our research strategy for this project to clarify why the team could not locate publicly available information for this request.

Helpful Insights

  • Tractor Supply, which is the largest agricultural retail chain, uses several collaboration strategies with their agricultural equipment vendors for marketing and sales.
  • To promote sales and market products, vendors (including those who provide fencing, firearms, and farm equipment/tools) may offer temporary cost reductions for products. This is referred to as "vendor supply" in the annual report and is negotiated in vendor agreements.
  • Vendors also help market their products for Tractor Supply by honoring coupons.
  • Vendors provide training/education and educational materials (i.e., brochures) to the sales force within Tractor Supply.
  • Vendors provide assistance with product presentation.
  • Tractor Supply also negotiates volume-based discounts/rebates with vendors to promote sales, which is referred to as "volume rebates."
  • Among the vendors that work exclusively with Tractor Supply--and that provide equipment, tools, or firearms--are CountyLine, Huskee, JobSmart, Treeline, and TSC Tractor Supply Co.

Research Strategy

Our hypothesis supporting our first search was that industry reports for the agricultural/lifestyle retail industry would offer case studies or specific examples of marketing and retail sales promotion between them and fencing (and then expanding to include farm equipment, tools, and firearms) manufacturers. We searched for industry reports (e.g., Market Watch, Business Wire, Market Research, Statista, etc.) and could not locate any that provided specific examples. The reports that may exist for this are all behind pay walls.

The team redirected our efforts to locate sources by searching marketing reports/white papers/press releases that would provide us examples of these specific vendor-and-agricultural-retail collaborations. Our hypothesis guiding us here was that these types of collaborations were new marketing innovations between these two industries and therefore, we would find specific examples of these collaborations in press releases highlighting this marketing technique. Unfortunately, in searching through various marketing industry sources (e.g., Marketing Week and Ad Week) and searching for press releases (e.g., PR News Wire and Business Wire) we could not locate the information.

Next, we decided that we might be able to find specific information concerning fencing equipment vendors and agricultural retail chain collaborations on the websites of either industry (Red Brand, Bekaert, Tractor Supply, Rural King, Southern States). Our hypothesis here was that materials might exist on some of these company websites that explained how they partner (either the manufactures with the retail chain or vice versa) to promote sales and marketing efforts. We first focused on fencing manufacturers (e.g, Red Brand, Bekaert, or Mighty Mule) sold in agricultural retail chains to locate either case studies or information for retail chains, who were searching for new vendors (e.g., information about incentive programs, bulk order rebates, or reduced costs in the early adoption of the brand), but we were not successful. We then searched for similar information by starting with agricultural retail (e.g., Tractor Supply or Fleet Farm) stores that sold fencing (or more generally farm equipment and tools) for future business materials aimed toward vendors that explain their collaboration strategies for sales/marketing. Again, we were unable to find sources.

This third search strategy, however, helped us identify some general information about vendors and Tractor Supply collaborations. Tractor Supply is the only publicly traded company and thus published its annual report. In searching through their annual report, we located explanations of how they partner with vendors (and some examples of vendors they work with) to market products and promote sales.
Sources
Sources

From Part 02
Quotes
  • "Vendors frequently support these specific programs by offering temporary cost reductions and honoring coupons. Our vendors also provide assistance with product presentation and fixture design, brochures, support for in-store events, point-of-purchase materials for customer education, and product knowledge for our team members. "
  • "We receive funding from substantially all of our significant merchandise vendors, in support of our business initiatives, through a variety of programs and arrangements, including vendor support funds (“vendor support”) and volumebased rebate funds (“volume rebates”). The amounts received are subject to terms of vendor agreements, most of which are “evergreen”, reflecting the on-going relationship with our significant merchandise vendors. Certain of our agreements, primarily volume rebates, are renegotiated annually, based on expected annual purchases of the vendor’s product. "
  • "The Company receives funding from substantially all of its significant merchandise vendors, in support of its business initiatives, through a variety of programs and arrangements, including guaranteed vendor support funds (“vendor support”) and volume-based rebate funds (“volume rebates”). The amounts received are subject to terms of vendor agreements, most of which are “evergreen,” reflecting the on-going relationship with our significant merchandise vendors. Certain of the Company’s agreements, primarily volume rebates, are renegotiated annually, based on expected annual purchases of the vendor’s product. Vendor funding is initially deferred as a reduction of the purchase price of inventory, and then recognized as a reduction of cost of merchandise as the related inventory is sold. During interim periods, the amount of vendor support and volume rebates are estimated based upon initial commitments and anticipated purchase levels with applicable vendors. The estimated purchase volume (and related vendor funding) is based on the Company’s current knowledge of inventory levels, sales trends and expected customer demand, as well as planned new store openings and relocations. Although the Company believes it can reasonably estimate purchase volume and related volume rebates at interim periods, it is possible that actual year-end results could be different from previously estimated amount"