Most companies fear commoditization. It is a big threat to small service organizations as they typically lack the ability to control prices in their market, and it certainly had CFO Kevin Rusin worried as he considered the future of McKinley Elevator Corporation.
McKinley provides residential elevators and accessibility lift products for homes, public-sector locations, and businesses. It serves a regional market that includes California, Nevada, and Arizona. While McKinley has a strong industry reputation as a distributor and is sought out by leading manufacturers to sell their products, it is not a unique provider in its market. That reality was disquieting as Rusin candidly admits. “Other companies sell what we sell.” Without differentiators, the company ran the risk of being commoditized. Rusin knew McKinley needed stronger offers to avoid this trap and the inevitable downward pricing pressure that went with it.