Ferguson SWOT & PESTLE Analysis
COMPANY PROFILE -Ferguson
Business Sector :Building Materials
Operating Geography :United States, Canada and United Kingdom
About Ferguson :
Ferguson plc is an Anglo-American multinational plumbing and heating products with it’s headquarters in Winnesh Triangle, United States. The company’s brands comprises of Ferguson Enterprise (United States), Wolseley (United Kingdom and Canada) and William Wilson (United Kingdom). In 1887 Ferguson’s business began with making sheep shearing machinery named Wolseley. Herbert Austin who worked in Wolseley’s shearing machinery was appointed it’s manager and was given a share of its equity. Wolseley continued to expand manufacturing, buying and distribution businesses. Later in 1982, it entered the market in the United Kingdom by obtaining Ferguson Enterprise, a dealer of plumbing with supplies with around fifty branches on the East Coast of United States. Ferguson trades as Wolseley and William Wilson, the supplier of heating, plumbing and bathroom products in Scotland, United Kingdom. In Canada, the company operates as Wolseley Canada, where it is assembled into businesses of plumbing, ventilating, heating, air conditioning, refrigerator water works and industrial pipe, valve and fittings. The company leverages the talent of 35,000 employees across the three regions. This Anglo-American multinational company operates in large, fragmented markets with growth characteristics.Ferguson’s Unique Selling Proposition or USP lies in it being the world’s leading specialist distributer of plumbing and heating products. The company aims to be a trusted partner and deliver the best service to customer in its industry by improving their construction, renovation and maintenance projects.
Ferguson Revenue :
£ 22.01 billion – December 2019 (YoY growth 6.07%)
£ 20.75 billion – December 2018
Competitive Analysis of Ferguson
| 1. Consistently strong operating and financial performance 2. Strong position in USA’s fragmented market 3. Differentiation through strong sales culture and push for excellent customer service 4. Broad and diversified portfolio of products 5. Launching e-commerce platform in this sector is a game changing initiative | 1. Pandemic has led to lockdown across various operational areas leading to complete shutdown of work. |
| 1. Repair Maintenance and Improvement (RMI) to increase market for smaller projects 2. Partnering with UV-C HVAC suppliers to make people feel safe from COVID-19 3. Online digital marketing through social websites and application will impact in sales 4. Market growth drivers in the USA proving strong growth opportunity 5. Own brand penetration to lead to higher gross margins | 1. New competitors in distribution and wholesale business with lower rates have disrupted the market 2. Changing regulations and laws will increase operational cost to stay compliant |
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Detailed SWOT Analysis of Ferguson
Strength
1. Consistently strong operating and financial performance: Ferguson PLC has displayed a strong and consistent financial performance over the last six years. In 2019 revenue or the net sales for Ferguson PLC was £ 22.01 billion which is 6.07% higher than the previous year. In 2018, the net revenue or sales generated £ 20.75 billion. The company managed to show strong financial performance in a globally weak economic environment. Ferguson PLC has maintained manufacturing efficiency year on year with improved profitability. Ferguson launched automated valve for the oil and gas industry which gave a boost to its sales. The overall profit before tax rose to $1,324 million.
2. Strong position in USA’s fragmented market: Ferguson PLC has managed to make significant returns from its main focus areas of 14 businesses that is spread across three countries by well equipping itself. The company has maintained its number one or two market position in majority of the nine strategic business units that it operates. Also, Ferguson has recognized strong growth opportunities that will arise from continued consolidation of these fragmented markets. It aims to maximize the shareholders’ value by leveraging its proficiency and scale in providing a wide range of products and services from across business units. The company’s low US costs and improved margins can be attributed to the obtained synergic benefits. Moreover, these markets have helped in generating strong growth, gross and net margins and good ROC in all the business units.
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Weakness
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Opportunity
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Threat
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Major Competitors :
- Lowe’s
- Emcor Group
- Emerson Electric
- Travis Perkins
- Lennox International
- Sig
- The Home Depot
- Huttig Building Products
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References used in Ferguson Analysis Report
1. Ferguson Annual Report 2019 - https://www.fergusonplc.com/content/dam/ferguson/corporate/investors_and_media/anual-report/ferguson_plc_annual_report_2019.pdf.downloadasset.pdf
2. Ferguson Investor Report 2019-20 -https://www.fergusonplc.com/content/dam/ferguson/corporate/investors_and_media/results-and-reports/2020/2019-20-Full-Year-Results-Presentation.pdf
3. Ferguson company profile - https://in.reuters.com/finance/stocks/company-profile/FERG.L
4. Ferguson Company website - https://www.fergusonplc.com/en/index.html#
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