Key success factors

Company History, Background and products, and services.

Firms operating in different industries face stiff competition and are compelled to rely on key factors that determine their success in a specific industry. One such firm is Comfort Systems USA. It operates in one of the most competitive industries that include Heating and Air Conditioning Contractors (HVAC) in the mechanical services also industry. According to IBIS World, the HVAC contractor’s industry is growing rapidly at 4.9% annual growth with an estimated $87.9bn in annual revenues thus there’s a need for firms in this sector to identify their main success factors that would promote a wider market share (Noordewier, & Lucas, 2020). An increase in per capita disposable income, increased residential construction including the rising value of non-residential construction is fueling the growth of HVAC firms. 

Comfort Systems USA is an American HVAC firm based in Houston Texas. Founded in 1997, Comfort Systems USA is a publicly-traded company in the New York Stock Exchange under the symbols (NYSE: FIX) and is considered large enough given it has over 12,000 employees. The firm is located in multiple areas and therefore enjoys a wider market share due to its 38 operating units in over 86 locations within the U.S. Based in the institutional, commercial, industrial HVAC markets, Comfort Systems provides heating, air conditioning, ventilation, and other HVAC services including installation, maintenance, and overhaul services. Other than HVAC services, the firm also provides specialized applications including building automation, fire protection, cooling processes, piping, and electronic monitoring. As such, Comfort Systems requires relevant key success factors to successfully maneuver in the highly competitive HVAC market. 

Given the competitive nature of the HVAC market, Comfort Systems must develop key success factors relative to the mechanical services industry while also considering the highly volatile nature of equipment and technology it applies. According to US Census Bureau, only 36.4% of all construction based firms make it to their fifth year due to various factors that are critical to the firms but are often overlooked (Noordewier, & Lucas, 2020). Factors are the effective management of accounts receivables.

 

Company History, Background and products, and services.

Firms operating in different industries face stiff competition and are compelled to rely on key factors that determine their success in a specific industry. One such firm is Comfort Systems USA. It operates in one of the most competitive industries that include Heating and Air Conditioning Contractors (HVAC) in the mechanical services also industry. According to IBIS World, the HVAC contractor’s industry is growing rapidly at 4.9% annual growth with an estimated $87.9bn in annual revenues thus there’s a need for firms in this sector to identify their main success factors that would promote a wider market share (Noordewier, & Lucas, 2020). An increase in per capita disposable income, increased residential construction including the rising value of non-residential construction is fueling the growth of HVAC firms. 

Comfort Systems USA is an American HVAC firm based in Houston Texas. Founded in 1997, Comfort Systems USA is a publicly-traded company in the New York Stock Exchange under the symbols (NYSE: FIX) and is considered large enough given it has over 12,000 employees. The firm is located in multiple areas and therefore enjoys a wider market share due to its 38 operating units in over 86 locations within the U.S. Based in the institutional, commercial, industrial HVAC markets, Comfort Systems provides heating, air conditioning, ventilation, and other HVAC services including installation, maintenance, and overhaul services. Other than HVAC services, the firm also provides specialized applications including building automation, fire protection, cooling processes, piping, and electronic monitoring. As such, Comfort Systems requires relevant key success factors to successfully maneuver in the highly competitive HVAC market. 

Given the competitive nature of the HVAC market, Comfort Systems must develop key success factors relative to the mechanical services industry while also considering the highly volatile nature of equipment and technology it applies. According to US Census Bureau, only 36.4% of all construction based firms make it to their fifth year due to various factors that are critical to the firms but are often overlooked (Noordewier, & Lucas, 2020). Factors are the effective management of accounts receivables.

3.1.5 Industry key success factors

Key success factors (KSFs) are the competitive factors for any leading organizations to use in the global marketplace. It is often attributed to its survival and proper organization alongside with elements, products attributes, operational approaches and competitive capabilities which might be internal or external.

3.1.5.1 Managing accounts receivables

Most firms depending on the construction industry are often capital intensive due to the large capital investment in purchasing fixed assets like those used in the HVAC industry. Most HVAC contractors usually face payment issues thus company leaders like Comfort Systems must ensure an adequate amount of capital to ensure continued operations. The most effective and efficient way of achieving this is by ensuring the appropriate management of accounts receivables with the intent of eliminating cash flow issues (Noordewier, & Lucas, 2020). As such, HVAC firms must be proactive in receiving accounts receivables. Success in the HVAC market therefore depends on the delivery of accurate invoices while ensuring a strict customer qualification requirement before issue material or labor on credit. Most critically, HVAC firms must protect their right to file liens due to high chances of default payments (Noordewier, & Lucas, 2020). 

3.1.5.2 Technology- related

Technological advancement and innovation is another major factor defining success in the HVAC industry. The construction and mechanical services industry makes up one of the least digitalized sectors other than agriculture. Most HVAC firms perceive modern technology primarily as an expense rather than an investment into the future, and as such, they are likely to face challenges due to technological changes (Sasasanelli, et al., 2018). HVAC firm must ensure data-driven decision-making that will not only ensure customer satisfaction but will also create higher revenues. For instance, cloud computing and other communication technologies promote efficient and effective communication between management and field staff. The success of HVAC firm therefore depends on modern technology and efficient communication because poor installations or any mechanical error may lead to huge financial losses or even death as most of the HVAC equipment could catch fire (Sasasanelli, et al., 2018). As such, HVAC firms must leverage technological innovations for efficient operations including effective communication.

3.1.5.3 Business Diversification

Business and client diversification also influences successful businesses. Most HVAC firms are usually impacted by economic downturns that influence customer’s purchasing power. For instance, during the 2008-09 economic recessions, most firms closed down and millions of staff were sent home due to the low demand for products/services. Most firms with diversified revenues sources survived the 2008 economic recession unlike those whose business neither is nor so diversified. Having various revenue sources due to businesses distributed across different industries will ensure HVAC firm’s survival during tough economic times (Sasasanelli, et al., 2018). The business diversified also creates a wider markets that ensures constant cash flows while reducing business volatility thus creating a major critical success factor in the HVAC industry. 

3.1.5.4 Corporate structure

Corporate structure plays a critical role in a firm’s success. Firms with organizational structures that support conflict resolution and problem-solving not only ensure an affordable working environment but also promote sales through adherence to excellent customer care and product delivery (Noordewier, & Lucas, 2020). Corporate structure also encourages proper leadership which in turn promotes accountability especially is fiscal responsibilities and production processes while staff will be highly motivated and focused because of clear and precise job descriptions and other responsibilities. Without a corporate structure, there would be confusion and personality conflicts that would impact service delivery and customer care thereby influencing the overall profitability (Noordewier, & Lucas, 2020). As such, HVAC firms mainly being service-oriented must have a defined corporate structure to avoid conflicting roles and other challenges mainly accountability; otherwise, they are likely to fail. 

In conclusion, other than the above factors, corporate culture also influences a firm’s success. The HVAC industry is mainly service-oriented thus must have a corporate culture that promotes employee satisfaction but not revenues. Business diversification is also critical as it offers additional revenue sources while widening a firm’s client base. An HVAC firm must therefore determine its main products and services before establishing its critical success factors because each element influences profitability in various ways compared to others. 

3.1.5.5 Marketing-related KSF’s

in order to score big leads and account, delivering high quality leads to sellers will be a major focus. Comfort systems USA prioritized how hey can better appeal to their customers by providing different options customers can access and reach them interms of products and products solutions. They included Account Based Advertising, Digital marketing, sales acceleration and D&B Direct

 
 

References

Comfort Systems USA (2019). About us. Retrieved from 

https://www.linkedin.com/company/comfort-systems-usa

Graening, J. (2020). “Five Success Factors for Growing Commercial Services”. Retrieved from 

https://www.hvacwebconnection.com/hvacarticles/growing-commercial-services.htm

Noordewier, T. G, & Lucas, M. T. (2020). On being green and profitable: Does Industry context matter?. International Journal of Production Economics, 223, 107528.

Sasasanelli C., Pezzotta, G., Pirola, F., & Terzi, S. (2018, July). What affects manufacturers approaching servitization: a case study in HVAC industry. In International Conference of Product Lifecycle Management (pp. 400-409). Springer, Cham.

Hobson, B. (2020, September 4). Two factors to watch at Comfort Systems Usa Inc. Stockopedia. https://www.stockopedia.com/articles/two-factors-to-watch-at-comfort-systems-usa-inc-116998/