Fastenal: Losing its Fast Growth to Amazon Business

  • Reference: IVEY-9B17M170-E

  • Year: 2016-2017

  • Number of pages: 12

  • Geographic Setting: United States

  • Publication Date: Nov 16, 2017

  • Fecha de edición: Nov 16, 2017

  • Source: Ivey Business School (Canada)

  • Type of Document: Case

  • Industry Setting: Retail Trade;

Grouped product items
Format Language Reference Use Qty Price Preview
pdf English IVEY-9B17M170-E
As low as €6.75
Preview

You already have a subscription

To order please contact the person in charge of academic purchases in your university.
You'll be able to order once your profile has been validated.

Description

Fastenal was one of the largest U.S. industrial supply companies, with the highest operating margin among its competitors. It was known and awarded for its innovative industrial vending solutions. With the launch of Amazon Business in the industrial distribution space in 2012, Fastenal’s performance began to decline. In 2017, Amazon Business obtained patents for a drone-based delivery system. This, combined with Amazon’s power of low cost, raised critical challenges for leading players like Fastenal. How should Fastenal respond to this competition: should it focus on low price or pursue a differentiation strategy?

Learning Objective

This case deals with strategic management, customer relationship management, and innovation in the context of industrial business. This case can be taught in strategic management or industrial marketing courses at the undergraduate or graduate level. After completing the case, students should be able to ·analyze elements of sustainable competitive advantage; ·use a strategy map to explain a firm’s success; ·discuss what customer relationship management efforts a firm should take in industrial business; ·conduct an analysis for an industrial supply business; ·explain elements of successful innovation; ·discuss measures for competing against low cost players; and ·understand a strategic feasibility framework.

Keywords

competing against low-cost players Customer relationship management industrial innovation and marketing Porter's five forces strategy map Sustainable competitive advantage