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36
STRATEGY

The Big Picture

This year's top company thrives in the electronics industry despite intense price pressure.
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"Packed to the brim" is how S. Dee Davis describes his warehouse in the Chattahoochee industrial area, a gritty but transitioning neighborhood on Atlanta's west side. In the long, narrow space, shelves filled with 50-inch Sony plasma screens and Panasonic projectors soar up to the 30-foot ceiling. Davis's business, Digital Visual Display Technologies Inc., installs video systems primarily in boardrooms, though it does a lot of work on boats, too. Nothing sits for long: The booming reseller typically turns its inventory over in less than 20 days. In the five years after its founding in 1997, DVDT grew to $11.5 million in sales, at a 4,800% rate that vaults it to No. 1 on this year's Inner City 100.

The secret to DVDT's success? An ability to adapt to changes in the electronics market that would make Darwin proud. Anticipating the coming boom in DVDs, Davis launched the company to sell DVD players. He and his partner, Richard Stanton, devoted a large part of their business to exports to consumers in Europe, where margins were higher and competition less intense. As that market became saturated, the company jumped into the domestic business-to-business arena, landing a $2 million deal to install 4,500 systems in Burger Kings. When margins on DVD players began to dwindle, Davis moved into new product lines like liquid crystal display monitors, again sold to corporations. Then plasma screens. Since 2000, DVDT's specialty has been installing the enormous flat-screen systems in boardrooms and schools and on yachts.

Recently, Davis's competitors turned to heavy discounts, squeezing profits industrywide. "Prices are at an all-time low, just like mortgage rates," explains John Balmforth, DVDT's Sony account manager. So Davis has adapted yet again. The company works with a third-party manufacturer to develop mounting equipment and cable wiring for plasma-screen products. Coupled with installation fees, those accessories -- which now account for 30% to 40% of sales -- are helping DVDT grow revenue and earn net margins of 10%. "We keep up by changing the business fast, adapting to overcome the obstacles we face," says Davis. "It's very difficult." But for DVDT, it's a well-worn strategy.


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Last updated: May 1, 2003




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