If we look back at history, there have been many large companies that have received poor PR by the media and if you look at the storm that this has caused in the Financial Review, there is plenty of buzz going on! The real problem for Spotless is not brand driven, but service oriented.
If you look at the myriad of small business that supplies Spotless, what you will find is service excellence and value adding which is why they won the contract in the first place. To use Hunter Industrial again, they supply industrial cleaning products, but also run environmental and OHS programs free of charge. Without Hunters, Spotless need to outsource this function or forgo it, losing their competitive edge.
The equation for Spotless is simple, they will lose their smaller suppliers and consolidate their supplier list to a few larger companies, with greater economies of scale. This will drive their costs down and position them better for the future. This brings us back to the age old marketing question, can you compete on price along?
Josh Strawczynski's Opinion:
Price is not the be all and end all, particularly in tough economic times, service value is the key. Spotless run the risk of losing this competitive edge in a dynamic marketplace, all brought on by greed and shortsightedness.
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