It’s a decision that many companies face day in and day out across every business year. Product line extension and expansion is a critically important element in ensuring future success. A greater percentage of revenues have to come from new product introductions to ensure ongoing business vibrancy. But companies must resist falling into the trap of continually “extending and defending” with products that the market may or may not want.
Enter the Dry-back Boiler
At Victory Energy, product line extensions are driven based upon unmet customer needs or from a direct request to get into the business. Such was the case with the recent announcement that Victory Energy has entered the dry-back boiler business. For years, customers asked Victory Energy to get into the business based upon having firsthand experience with the company’s line of wet-back firetube products. The market timing was deemed right as other mature competitive firetube manufacturers began to fade away and customers noted a drop off in service and support from others. It’s a classic case of where the market dynamics and audience desires intersected to create a market opportunity.
Extension and expansion come with significant investment in people, products, and processes. Too many companies try to accomplish this with little to no budget allocated to the effort. It is product extension for the sake of product extension. If done correctly, the extension creates several new revenue streams.
By becoming a full-line firetube manufacturer, with both dry-back boiler and wet-back boiler offerings, Victory Energy is making a significant investment in the manufacture of firetube boilers in our Cushing, OK facility. An entirely new sales force of independent sales reps who specialize in having relationships in the commercial world has to be built. Product and project management talent is being recruited. The market may have the desire and dictates the need for a new product source, but they still expect performance. That is the ultimate decision criteria. Just because you say you’re in a market does not make it so.
Extension into new markets is a hallmark of what Victory Energy is all about. Three of our latest product extensions and introductions were driven directly from customers asking us to enter the market. After years of making tremendous industrial boilers, Victory Energy made the decision to manufacture Vision burners. The perspective of many customers was that it is a natural extension to be in the burner business. The same holds true for greater emphasis on rental boilers as more operations require more steam on a temporary basis. The market spoke and Victory Energy listened and responded with product extensions that delivered on the need. Always listen to the voice of the customer.