Businessmodel of Mohawk Industries

Customer Segments

Mohawk Industries has a segmented market business model, with customers that have slightly different needs. The company targets its offerings at both residential and commercial customers.

Value Proposition

Mohawk Industries offers two primary value propositions: accessibility and brand/status.

The company creates accessibility by providing a wide variety of options. Its products are used in both residential and commercial spaces, and consist of a broad range of items, including carpet, rugs, ceramic tile, laminate, wood, stone, luxury vinyl tile, and vinyl flooring. It has been able to greatly expand its portfolio due to many acquisitions. In 2015 alone it acquired International Flooring Systems (a manufacturer of luxury vinyl tile and sheet vinyl), Advent KAI Luxembourg Holdings (a manufacturer of ceramic tile), and Xtratherm Limited, a manufacturer of insulation boards.

The company has established a powerful brand due to its success. It touts itself as the world’s leading manufacturer of floor covering produccts. It maintains operations in numerous locations, including Australia, Brazil, Canada, Europe, India, Malaysia, Mexico, New Zealand, Russia, and the U.S. It offers a number of well-recognized brands, including American Olean, Daltile, Durkan, Karastan, Marazzi, Mohawk, Mohawk Group, Pergo, Unilin, Quick-Step, and IVC. Lastly, in 2015 it was recognized by *Builder *Magazine as the most-used carpet product, as well as the carpet product with the highest quality rating and level of brand familiarity.

Channels

Mohawk Industries’ main channels are company-operated service centers, independent distributors, home center retailers, independent floor covering retailers, tile and flooring retailers, mass merchandisers, department stores, buying groups, commercial contractors, and commercial end users.

The company promotes its offering through its website, social media pages, advertising, promotions such as rebates, and participation in trade shows and conferences.

Customer Relationships

Mohawk Industries’ customer relationship is primarily of a self-service nature. Customers utilize its products while having limited interaction with employees.

Key Activities

Mohawk Industries’ business model entails designing, developing, manufacturing, and distributing its products to customers.

Key Partners

Mohawk Industries’ key partners are the suppliers that provide it with the raw materials it needs to manufacture its products. It also relies on various parties to help distribute its products, including independent distributors, home center retailers, independent floor covering retailers, tile and flooring retailers, mass merchandisers, department stores, buying groups, commercial contractors, and commercial end users.

Key Resources

Mohawk Industries’ main resources are its human resources, who include the flooring product experts and engineers that design, develop, and manufacture its products. It also depends heavily on physical resources in the form of manufacturing plants and equipment.

Cost Structure

Mohawk Industries has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is cost of sales, a variable expense. Other major drivers are in the areas of sales/marketing and administration, both fixed costs.

Revenue Streams

Mohawk Industries has two revenue streams: revenues it generates from sales of its products to customers and from fees earned for the licensing of its patents from third parties.