Texas Flooring Distributors is structured to operate under a Disintermediation Cost Leadership Model, developed by co-founder Stephen Bair. Cost leadership is a means to competitive advantage by reduction in operational cost constraints otherwise subjugated to traditional flooring distribution models. Price leadership and gross margin leadership are typical byproducts of successful cost leadership models. For example, if RetailerA buys the same item as RetailerB and both encounter prospective customers of said item Customers X, Y, and Z, the cost leader has a greater opportunity to convert all three customers, on both price competitiveness and gross margin potential, all else being equal. The disintermediation component, or “cutting out the middle man”, is only effective to the degree that it does not affect the status of existing distribution relationships. Optimizing the degree of disintermediation is critical to the sustainability of the model. achievable by a retailer is dependent upon several factors. , l factorsmust does not consdoes not adversely affect existing distribution relationships, e.g., cost and operational constraints.
Market Leadership = Product Leadership + Brand Leadership + Service Leadership + Cost Leadership
In its most simplistic form, the model can be expressed