Endeavoring to Reduce Influx of Poor Quality ProductsTue, 09/01/2015 - 13:42
If you have ever found yourself standing in the middle of the road with a flat tire, perhaps you can relate to the relief of knowing you have the right equipment to change the tire without having to pay for a tow-truck. Just as with cars, the technology in these tools has evolved, but they have remained simple gadgets for anyone to use in any emergency.
As a privately-owned family company, Mikel’s has been operating since 1960, designing, manufacturing, and marketing the hydraulic bottle jack systems used in almost every car across the country, moving to emergency tool kits in 2005 to complement its range. Mikel’s customer base is heavily tied to the fact that, in Mexico, OEMs must supply fire extinguishers and other emergency tools with the vehicle by law. As a result, the company has solidified its position as a supplier for 42 OEMs based in Mexico, although its main focus lies within the aftermarket. The company has presence in 14 countries in Central and South America, and while it has not yet been able to obtain a distributor in the US and Canada, Mikel’s hopes to begin operations there in the near future.
With more than 1,000 different products, Mikel’s has experienced rapid expansion. OEM products represent approximately 30% of the company’s total revenue, while aftermarket sales to hardware companies, auto parts shops, and retailers represent the remaining 70%. “Although hydraulic bottle jacks represent the company’s core business, there have been certain changes in the aftermarket, making pressure washers, motorized generators, air compressors, and other hydraulic products strong competitors,” states Eduardo Tamer, Director General of Mikel’s. The company also saw a gap in the market and, apart from the Mikel’s brand, it incorporated two different product lines under the Industrias Tamer umbrella. The first one was Mr. Brillo, a line of auto cleaning products and cleaning hardware. The other was Mango, a low-cost brand for imported products used by retailers. Regarding its distribution strategy, Mikel’s stores hold most of the company’s catalog. Distributors, on the other hand, tend to buy the most common products. For that reason, Tamer does not believe the introduction of new stores will create major competition, rather than complement the range already on the market. With a manufacturing plant in Tlalnepantla, Mexico City, and 79 service centers, Mikel’s has developed a truly strong network. The company counts more than 650 distributors throughout Mexico among its affiliates and, in terms of commercial success, the company expects 22% growth for 2015, based on promising growth figures of 12% in 2014.
Mikel’s is an ISO/TS certified company, but Tamer believes there is significant potential for the Mexican government to stem the import of poor quality products into the country. The company takes regulations and accreditations seriously, consistently implementing quality control measures and complying with correct accreditation guidelines, a process that is overseen by its Shanghai office. Tamer admits that the products may not be the least expensive on the market, but adherence to quality standards is top priority. “By designing and manufacturing products, as well as offering service and warranties, we have been able to provide a much stronger brand over the years,” he states. Large distributors in Mexico are emerging, but rather than viewing them as competitors, Mikel’s perceives them as potential customers. Working in collaboration with AutoZone has been a positive experience, Tamer believes, leading to his desire to incorporate other companies such as Napa Riley into the network. The Mexican market represents approximately 5-7% of the US market in terms of auto parts, and although Mikel’s infrastructure is extremely robust, supplying the Mexican market alone could prove problematic. In a bid to maintain pace with the increasingly professionalized market, Mikel’s is striving for optimization within all sectors of the company. According to Tamer, the changing landscape of the industry has a significant impact on distribution and globalization strategies, with factors such as technology, new systems, and low-level management decisions. “Development of a company over a number of decades requires a deep-rooted approach, meaning that results of strategies implemented now may not see success for up to 30-40 years. Therein lies the importance of long-term planning.” A valuable component for the company’s success is brand loyalty, and Tamer wishes to continue following the same quality control measures that have seen Mikel’s become a strong competitor on a global scale.