Cartridge World: Managing Growth During a Flat Market

Recycling Times has an exclusive interview with Rod Young, Global CEO of Cartridge World.

1. Which global and business markets are you particularly do you want to grow in?
One of our particular interests is the Asian market. We’ve recently established a Hong Kong trading corporation. And we’re in the market selling directly to customers in the region, as well as facilitating the development of other Asian markets. We have seen the Asian market grow significantly, that’s not to say we’re ignoring the rest of the world. We have very large business in Australia and North America. And as the European market recovers, we see some business opportunities there as well.

2. Cartridge World is well-known for work successfully with the small home offices and home consumers. Is this the area Cartridge World will continue to focus upon, or you’re looking at other markets as well? 
We are consolidating that market, and continue to grow our market share in that market. But just as the bigger players are finding markets tough at the top end, we are actually pushing successfully into this market as well. We are very pleased with the big brand names we are now doing business with. And I might say, the business that we are now doing business with around the globe, would absolutely surprise many! We are doing business with major corporations of the world in many markets across the world. And that’s an opportunity we will see continue to grow.

3. How is the aftermarket consumables industry different to what it was 5 years ago?
I think it’s a question of the change in technology, and the combination of the change in complexity and the change in margin. The OEMs are really ramping up their technologies to make it more difficult for the aftermarket industry. And they’re also compressing their prices. What we’re seeing is very significant shake out. We see that the nature of the business will change significantly and Cartridge World is certainly on top of that change. And to be frank, we’ve been slow to make that move up until a couple years ago, but we’re accelerating rapidly to put ourselves in front of that change to ensure that we’ve got the products and services that our consumers need.

4. What does Cartridge World need to do change to adjust to these times?
Let me list what we’re doing: we’re changing and upgrading the quality of our people across our network, not only in terms of management, but up-skilling our franchise owners, the introduction of new franchise owners with new skills, and importantly, in the grooming of “masters” from existing “franchisees” in new regions.

Some bigger corporations are now interested in acquiring the rights to Cartridge World. This allows us to open new markets in the Middle East, in Africa, in China as well as the rest of Asia. We’re attracting a much higher caliber of individual or corporation—I’m talking about groups or individuals with a net worth of not less than $10 million—who are serious about taking on, for example, the $22 billion dollar market opportunity in the Asian region.

So our big change is in the quality of our people and in the way our business processes are conducted.

5.How many Cartridge World stores are there around the world and how many do you think will there be in the next 3 years? 
We have change taking place every week. We have some stores closing which were improperly located or not in the right markets, and we have some stores opening. At the moment, we have about 1,500 stores in 50 countries. In the next 3 or 4 months, we will be opening in another 3 or 4 countries with a raft of new stores. Of course, our activities aren’t just retail-based, but we’re moving more of our business onto the internet as well. So our global reach is growing as a result of that.

We have a very solid, “bricks and clicks” strategy which will see us opening more stores. For example, in North America, we only geographically reach about 30% of the market, so just in this region alone, we should have about 2,000 stores. So we have significant growth opportunities there. Cartridge World has very mild market share in some of our markets. And in some markets, we’re not even growing as quickly as the market itself, especially in Asia.

6. What is your strategy for growth in the future?
People are the core part of our strategy, so our key strategy is actually to attract more significant businesses who wish to acquire our master development rights in a number of areas around the world. And what we’re looking to do is to attract people who see the opportunities in the market globally. It’s an $80 billion market and continuing to grow. We are looking for entrepreneurial organizations who see these opportunities. I want the industry to know that Cartridge World is in growth mode and it’s looking for people who want to get into the very vibrant and interesting industry.