Key success factors part 4 ($TA)

by PlanMaestro

Having distilled the key success factors, selected the appropriate metrics, and collected the data, is nice to check the circumstantial evidence to see the accuracy of the 80/20 analysis. I collected several articles, but I think the following four will give you a sense of the industry and of Flying J’s disruptive influence. The first one is an interview of Flying J’s current CEO on how they got into this mess:

The current CEO, Crystal Call Maggelet, assigns much of the responsibility for the bankruptcy to J. Phillip Adams, who led Flying J for almost two decades. Adams, said Maggelet, was an empire-builder who wanted to put Flying J on the map without giving enough consideration to the possible financial ramifications.

“Phil is all about growing the top line and revenue growth. He wasn’t always that excited by profitability. Although Flying J did

via Flying J’s bankruptcy a tale of rapid growth without corresponding profit – Salt Lake Tribune.

Followed by a consultant view on how Flying J shaped their culture

I always liked Flying J, as the founder Jay Call reminded me of my grandfather who was in the oil distribution / retail sector. He built the chain on offering a new approach to the truck stop image – clean facilities with a price leading (low cost) fuel approach. Jay Call was tenacious and scrappy in his business. Full disclosure – we did some marketing work for them several years ago.

While most of the fleets bought their on-road fuel from the competition, Flying J found considerable success with the small fleet / independent contractor segments. They were not only in the retail business, but the also owned some oil wells, refining, pipelines and also had got into financial services (fuel cards, banking, insurance and equipment financing). This merger however only involves the retail segment.

via Major Truck Stop Competitors Merging – Flying J + Pilot = Higher Ret – GLG News.

Flying J not only disrupted the industry in the US but also in Canada. This is a perspective from a Canadian executive on the recent changes in the industry

In 2006, Flying J began a partnership with Shell Canada. The Canadian oil and gas producer supplies the diesel and the U.S. chain provides the brand and the retail template.

The companies pledged to invest $200 million, build 15 new “travel plazas” across Canada and upgrade existing Shell facilities.

Since then, says McKnight, the Flying J truck stop has become “the Holiday Inn of truck stops” because identical stations on both sides of the border appeal to Canadian drivers who haul goods to the U.S. and at home.

Canadian truck-stop operators can’t compete, adds McKnight, because Flying J is using diesel fuel as a “loss leader” to draw truckers into truck stops and make money from restaurants, repair shops and other services.

via Business Edge News Magazine – businessedge.ca – Calgary/Red Deer Edition – Truck-stop business takes a sharp turn.

And the final one is a piece of history from 1999 on how the travelcenters became what they are today

Since the mid-1980’s, shrinking profit margins on diesel fuel and increasingly efficient truck engines have caused companies like the Ohio-based Travel Centers of America, the largest full-service truck stop company in the country, to look to four-wheelers, including R.V.’s, for profits. A 1995 study commissioned by NATSO, formerly the National Association of Truck Stop Operators, estimated that if just 1 percent of rural auto traffic were diverted to buying gas and eating meals at truck stops, the result would be an extra $300 million annually for a $37-billion-a-year industry. (Most budget-conscious truckers, noted Forrest Baker, a retired trucking industry consultant, do not eat two sit-down meals a day and ”one may consist of bread and bologna.”)

At least 80 percent of truck stops now call themselves ”travel plazas.” Travelers can visit a massage therapist, see a chiropractor, get a manicure or, in the case of Sierra Sid’s 76 Auto/Truck Stop Casino on I-80 in Sparks, Nev., marvel at Sid’s gun collection and Elvis memorabilia.

via Truck Stop’s Image Takes Turn Toward Glitz – The New York Times.

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