netrashetty
Netra Shetty
Ace Hardware Corporation is a hardware cooperative based in Oak Brook, Illinois, United States. Ace Hardware was founded in 1924 by Richard Hesse, E. Gunnard Lindquist, Frank Burke, and Oscar Fisher in Chicago, Illinois.
[edit] History
Ace Hardware, incorporated in 1928 as Ace Stores Inc., was founded to provide a centralized purchasing organization to supply the founders' and members' stores. Its retail network expanded to hundreds of dealers by 1949, when annual sales reached about $10 million.
After Hesse retired in 1973, Ace was sold to its retailers, becoming a cooperative,[1] and the headquarters moved to suburban Oak Brook. Independent owners became dealer-owners and shareholders in the company. Because it is a co-op and not a franchise, each Ace Hardware store looks different. Ace has placed a focus on Ace stores exhibiting some similar characteristics, such as signaled and core product lines. The Vision 21 program, as this is called, is aimed to make all stores look recognizable as an Ace Hardware.
As of 2005[update], the $13 billion retail hardware cooperative is made up of more than 4,600 independent stores in all 50 states of the United States and in 70 different countries. Ace Hardware was named after the Ace fighter pilots of World War I, who were able to overcome all odds.
DISTRIBUTION STRATEGY
In response to the arrival of home improvement mega-stores in communities across the country, Ace and its dealers are concentrating on giving their customers a level of service that can't be duplicated by these giant competitors. That there is strength in numbers is apparent from the comments of Ace Hardware dealers, who admit they'd rather not have to compete with giants like Home Depot, but feel confident that, with the backing of Ace corporate headquarters, they can weather the storm.
Connie Hansen, who has run an Ace Hardware outlet in Plano, Texas, for 20 years, told the Dallas Morning News that she was not particularly cowed by the opening of a Lowe's warehouse-type store in Plano. Two Home Depot stores are also within a five-mile radius of her store. Ms. Hansen contends the area is large enough to support all the stores. She expressed some concern, however, that the competition might lead to price wars.
Khandoo Nagar, operator of a Dallas Ace Hardware outlet, recalled the threat he faced when Home Depot moved into his neighborhood. "When Home Depot opened, our profits were hurt but not our sales," he said. "We consulted with Ace [corporate headquarters] and worked very hard to increase sales. We expanded and we changed our prices. Customers were mesmerized with the new Home Depot at first, but they soon realized that they can get many of the same prices here and be in and out in five minutes instead of spending more than an hour in Home Depot."
INFLUENCES
One of the factors that is helping Ace shape its strategy for the new millennium and weather the storm of competition is the growing American demand for higher levels of customer service. This gives Ace a leg up on its larger competitors, whose very size makes it difficult to supply that level of service. As the company points out in its literature, Ace truly is the place "with the helpful hardware man." In an open letter to customers on the company's web site, chairman Richard E. Laskowski and CEO David F. Hodnik express pride " . . . in the helpful quality service the folks in the red vests provide to our customers day after day, year after year." Most notably, the company offers its customers a "No Hassle Return Policy" and a "Satisfaction Guarantee".
CORPORATE CITIZENSHIP
Ace's dealers are actively involved in the communities in which they operate. The company promotes awareness of the importance of assisting customers in the community as well as in the store. Ace is a national sponsor of the Children's Miracle Network, which helps children's hospitals in every corner of the United States. To promote greater sensitivity to environmental concerns, Ace has developed a corporate Conservation Initiative.
Another way in which the company helps communities is through the Ace Hardware Foundation, which was founded in 1991. The Foundation encourages donations from both Ace Hardware Corporation and its individual stores for disaster relief and the Children's Miracle Network. By 1997 the Foundation's contributions to victims of natural disasters totaled more than $113,000.
GLOBAL PRESENCE
In addition to its vast network of hardware stores across the United States, Ace Hardware supplies more than 400 retail units in 62 other countries. Says CEO David F. Hodnik of the company's international presence, "Based on the success many of our international operators are achieving, we're convinced the Ace retail concept is transportable to most countries, especially where there is an emerging middle class seeking to improve their homes and lifestyle. We see Asia and eastern Europe as having considerable long-term growth potential in that regard."
The company's first Asian store, a 15,000-square-foot outlet outside Indonesia's capital of Jakarta, was opened in 1995. Since then, Kunkuro Wibowo, an Indonesian hardware distributor, has opened three additional stores and hopes to eventually open 50 to 100 more by sub-franchising the Ace concept.
TAGS:
channel motivation , channel strategy , channel value proposition , company in us , consumer location , distribution activities , distribution chain , distribution channel , distribution strategy , document automation , exclusive distribution , extended enterprise
[edit] History
Ace Hardware, incorporated in 1928 as Ace Stores Inc., was founded to provide a centralized purchasing organization to supply the founders' and members' stores. Its retail network expanded to hundreds of dealers by 1949, when annual sales reached about $10 million.
After Hesse retired in 1973, Ace was sold to its retailers, becoming a cooperative,[1] and the headquarters moved to suburban Oak Brook. Independent owners became dealer-owners and shareholders in the company. Because it is a co-op and not a franchise, each Ace Hardware store looks different. Ace has placed a focus on Ace stores exhibiting some similar characteristics, such as signaled and core product lines. The Vision 21 program, as this is called, is aimed to make all stores look recognizable as an Ace Hardware.
As of 2005[update], the $13 billion retail hardware cooperative is made up of more than 4,600 independent stores in all 50 states of the United States and in 70 different countries. Ace Hardware was named after the Ace fighter pilots of World War I, who were able to overcome all odds.
DISTRIBUTION STRATEGY
In response to the arrival of home improvement mega-stores in communities across the country, Ace and its dealers are concentrating on giving their customers a level of service that can't be duplicated by these giant competitors. That there is strength in numbers is apparent from the comments of Ace Hardware dealers, who admit they'd rather not have to compete with giants like Home Depot, but feel confident that, with the backing of Ace corporate headquarters, they can weather the storm.
Connie Hansen, who has run an Ace Hardware outlet in Plano, Texas, for 20 years, told the Dallas Morning News that she was not particularly cowed by the opening of a Lowe's warehouse-type store in Plano. Two Home Depot stores are also within a five-mile radius of her store. Ms. Hansen contends the area is large enough to support all the stores. She expressed some concern, however, that the competition might lead to price wars.
Khandoo Nagar, operator of a Dallas Ace Hardware outlet, recalled the threat he faced when Home Depot moved into his neighborhood. "When Home Depot opened, our profits were hurt but not our sales," he said. "We consulted with Ace [corporate headquarters] and worked very hard to increase sales. We expanded and we changed our prices. Customers were mesmerized with the new Home Depot at first, but they soon realized that they can get many of the same prices here and be in and out in five minutes instead of spending more than an hour in Home Depot."
INFLUENCES
One of the factors that is helping Ace shape its strategy for the new millennium and weather the storm of competition is the growing American demand for higher levels of customer service. This gives Ace a leg up on its larger competitors, whose very size makes it difficult to supply that level of service. As the company points out in its literature, Ace truly is the place "with the helpful hardware man." In an open letter to customers on the company's web site, chairman Richard E. Laskowski and CEO David F. Hodnik express pride " . . . in the helpful quality service the folks in the red vests provide to our customers day after day, year after year." Most notably, the company offers its customers a "No Hassle Return Policy" and a "Satisfaction Guarantee".
CORPORATE CITIZENSHIP
Ace's dealers are actively involved in the communities in which they operate. The company promotes awareness of the importance of assisting customers in the community as well as in the store. Ace is a national sponsor of the Children's Miracle Network, which helps children's hospitals in every corner of the United States. To promote greater sensitivity to environmental concerns, Ace has developed a corporate Conservation Initiative.
Another way in which the company helps communities is through the Ace Hardware Foundation, which was founded in 1991. The Foundation encourages donations from both Ace Hardware Corporation and its individual stores for disaster relief and the Children's Miracle Network. By 1997 the Foundation's contributions to victims of natural disasters totaled more than $113,000.
GLOBAL PRESENCE
In addition to its vast network of hardware stores across the United States, Ace Hardware supplies more than 400 retail units in 62 other countries. Says CEO David F. Hodnik of the company's international presence, "Based on the success many of our international operators are achieving, we're convinced the Ace retail concept is transportable to most countries, especially where there is an emerging middle class seeking to improve their homes and lifestyle. We see Asia and eastern Europe as having considerable long-term growth potential in that regard."
The company's first Asian store, a 15,000-square-foot outlet outside Indonesia's capital of Jakarta, was opened in 1995. Since then, Kunkuro Wibowo, an Indonesian hardware distributor, has opened three additional stores and hopes to eventually open 50 to 100 more by sub-franchising the Ace concept.
TAGS:
channel motivation , channel strategy , channel value proposition , company in us , consumer location , distribution activities , distribution chain , distribution channel , distribution strategy , document automation , exclusive distribution , extended enterprise
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