Flowserve Corporation (FLS): Business Model Canvas

Introduction

The fluid motion and control industry has been seeing immense growth in recent years. According to a report published by MarketsandMarkets, the global fluid handling system market size is expected to grow from $39.3 billion in 2020 to $52.4 billion by 2025, at a CAGR of 5.9% during the forecast period. The growth of the industry can be attributed to the increasing demand for fluid handling systems across various sectors such as oil and gas, chemical, pharmaceutical, and water management, among others. In this context, the Flowserve Corporation (FLS) stands out as a leading provider of fluid motion and control products and services worldwide.

• Core business: Flowserve Corporation (FLS) primarily operates as a provider of fluid motion and control products and services worldwide.
• Product range: The company offers a broad range of pumps, valves, seals, automation, and services to various industries such as chemical, pharmaceutical, power generation, oil and gas, and water management.
• Revenue streams: Flowserve's revenue streams are categorized into three main categories: Engineered Product Division (EPD), Industrial Product Division (IPD), and Flow Control Division (FCD).
• Strategic partners: The company's key strategic partners include equipment manufacturers, engineering firms, third-party distributors, and local service providers.
• Operational model: Flowserve mainly operates its business via a direct sales force, and also conducts business through distributors, and online through its website.
• Installed base: Additionally, Flowserve has a large installed base of products, providing significant opportunities to drive aftermarket services and growth.

The above factors indicate Flowserve's strong footing in the industry and its potential for future growth. In this blog post, we will delve deeper into the Flowserve Corporation's business model canvas to understand the different aspects of its operations and strategy that contribute to its success in the fluid motion and control industry.

Key Partnerships

Flowserve Corporation (FLS) operates in a highly competitive market, and forming strategic partnerships is crucial to maintain its position and drive business growth. The following are some key partnerships that FLS maintains: Suppliers: FLS relies on suppliers to provide the necessary raw materials and components for its products. Maintaining good relationships with suppliers is essential to ensure a steady supply of quality materials and to receive favorable pricing terms. Distributors: FLS partners with distributors who handle the sale and distribution of its products in various regions across the world. These partnerships allow FLS to reach customers who might be difficult to reach on its own. OEMs: FLS partners with Original Equipment Manufacturers (OEMs) to integrate its products into their equipment, providing a more comprehensive solution to end customers. These partnerships help expand FLS's reach and product offering, while also providing an additional revenue stream. Technology Partners: FLS collaborates with technology partners to develop innovative solutions and improve its products. These partnerships help FLS stay at the forefront of technology and provide customers with cutting-edge solutions. Industry Associations: FLS partners with industry associations to stay up-to-date with regulations and industry trends. These partnerships help FLS remain compliant and informed, while also providing networking opportunities and exposure to potential customers. In conclusion, partnerships play an integral role in FLS's business model. By leveraging the strengths of its partners, FLS can deliver superior products and services to its customers, expand its reach, and drive business growth.

Key Activities

Flowserve Corporation (FLS) operates in the global industrial market and provides fluid motion control solutions. To fulfill its market needs, FLS performs a series of key activities that ensure the company's smooth operations and satisfy customers' requirements. These key activities include:

• Design and manufacturing: FLS designs and manufactures highly engineered flow control equipment, including pumps, valves, and seals, tailored to industry-specific end-users' stringent requirements. The company's products are built to perform in demanding industries such as oil and gas, chemical processing, and power generation.
• Research and Development: FLS invests in research and development to continuously innovate its products and remain competitive in the market. The company leverages its expertise and cutting-edge technologies to improve its products' reliability, efficiency, and sustainability.
• Sales and Marketing: FLS's sales and marketing team operates globally to promote its products in the market. The team works with end-users, distributors, and channel partners to identify opportunities, understand customer needs and requirements, and provide tailored solutions. FLS's marketing team also raises brand awareness through various channels, including digital marketing, trade shows, and industry events.
• Supply chain management: FLS's supply chain management team manages vendor relationships, inventory levels, and logistics to ensure on-time delivery of products and services to customers. The team leverages digital solutions to optimize its supply chain and minimize costs while maximizing efficiency and quality.
• Service and Maintenance: FLS provides post-sales services to customers to ensure the proper operation and maintenance of its products. The company's service team offers installation, repair, and maintenance services to extend the product's life cycle and maximize its performance.

These key activities allow FLS to provide customized solutions to the industrial customers worldwide and offer high-quality products and services. FLS's continuous investment in research and development, design and manufacturing, supply chain management, sales and marketing, and service and maintenance activities ensure that the company remains competitive and meets customer's needs.

Key Resources

Flowserve Corporation's (FLS) business model canvas requires the following key resources:

• Human Capital: Flowserve needs a skilled and experienced workforce to manage its operations, design products, and provide technical assistance to customers. The company invests in attracting and retaining top talent, and offers opportunities for professional growth and development through training and education.
• Manufacturing Facilities and Technologies: Flowserve's manufacturing facilities are strategically located in various regions around the globe. The company uses modern technologies, equipment, and processes to deliver high-quality products that meet the needs of its customers.
• Research and Development: Flowserve invests significant resources in research and development (R&D). The company's R&D team is responsible for designing innovative products that improve efficiencies, reduce costs, and increase competitiveness.
• Supplier Network: Flowserve's supplier network enables the company to source quality raw materials and components necessary for its manufacturing processes. The company maintains long-term relationships with suppliers to ensure product consistency and reliability.
• Intellectual Property: Flowserve has several patents, trademarks, and copyrights that protect its innovative products and technologies. These assets contribute to the company's competitiveness and protect its market position.
• Distribution and Sales Network: Flowserve's distribution and sales network enables the company to deliver its products to customers all around the world. The company manages a network of distributors and sales representatives who are responsible for promoting and selling Flowserve products.

By leveraging these key resources, Flowserve is able to provide high-quality products and services to its customers and maintain a competitive edge in the market.

Value Propositions

• Industry-leading products: Flowserve Corporation (FLS) is committed to providing its customers with high-quality, reliable, and innovative products. Our products are designed to meet the needs of the most demanding industries, including oil and gas, chemical, and power generation.
• Expertise and knowledge: With over 200 years of combined experience, our team of experts has the knowledge and experience to help our customers solve even the most complex fluid motion and control problems. We partner with our customers to understand their unique needs and develop customized solutions that meet or exceed their expectations.
• Global capabilities: With a presence in over 55 countries, we are able to provide our customers with local support and expertise, no matter where they are located. Our global network of sales and service centers ensures that our customers receive the same high-quality service and support, no matter where they are in the world.
• Reliability and performance: Our products are designed to perform in even the most challenging environments. We use the latest technology and materials to ensure that our products are reliable, efficient, and perform at the highest level. Our products are engineered for long-lasting performance, reducing downtime and maintenance costs for our customers.
• Customer-centric approach: We are committed to providing our customers with the highest level of service and support. From initial consultation to post-installation support, we work closely with our customers to ensure that their needs are met and their expectations are exceeded. Our team of experts is available 24/7 to answer any questions or address any concerns our customers may have.

In summary, Flowserve Corporation (FLS) provides its customers with industry-leading products, expertise, global capabilities, reliability, and performance, all while maintaining a customer-centric approach. We are committed to working with our customers to ensure that we provide customized solutions that meet their unique needs and exceed their expectations.

Customer Relationships

At Flowserve Corporation, we value customer satisfaction and strive to establish long-lasting relationships with our customers. Our dedicated customer service team works closely with our clients to ensure that their needs are met and any concerns are addressed promptly.

• Personalized Support: We understand that each customer has unique requirements and preferences. Therefore, we provide customized services that are tailored to their specific needs. Our customer service representatives engage with clients on a personal level to develop a deeper understanding of their requirements and provide solutions accordingly.
• Timely Responsiveness: We ensure that we are easily accessible to our customers and that their queries, complaints, and feedback are promptly responded to. We are committed to providing timely solutions to any issues that our customers may face.
• Collaboration and Transparency: We believe that collaboration and transparency are crucial to building strong relationships with our customers. Therefore, we encourage open communication with our clients, keeping them informed about our operations, products, and services. We work collaboratively with our customers to identify opportunities for improvement and to optimize our services accordingly.
• Continuous Improvement: We continually strive to improve the quality of our services, and we depend on feedback from our customers to enhance our performance. We conduct regular surveys and gather feedback from our customers to identify areas where we can improve and take appropriate actions to enhance our services.

Channels

Flowserve Corporation (FLS) operates with a multi-channel approach to reach out to their customers and clients, and deliver their products and services efficiently. The following are the main channels that Flowserve Corporation utilizes to ensure product availability, customer satisfaction, and an optimal customer experience:

• Distribution Channels: Flowserve's channel partners, distributors, and authorized representatives work on the company's behalf to deliver high-quality products and services, and they help bring Flowserve's products to different markets globally. The company has a close working relationship with its channel partners, and they are well-trained and equipped to offer exceptional customer service in their respective markets.
• Direct Sales Team: Flowserve has its in-house sales team that engages with customers and clients on a personal level, offering them comprehensive and individualized solutions that are tailored to their needs. The team also communicates the company's core values and value propositions to clients, discusses the technical aspects of different products, and looks for ways to develop long-term relationships with clients.
• Online Channels: In today's digital age, online channels have become increasingly important for companies to reach out to customers globally. Flowserve has a robust online presence, with an e-commerce platform that allows customers to easily order products, receive quotations, track shipments, and access digital content such as manuals, installation guides, and technical data. The company's website is also a valuable source of information for customers, providing them with details about product specifications, applications, and certifications.
• Showrooms and Exhibitions: Flowserve showcases its products and services at exhibitions and trade shows globally, where customers can engage in live product demonstrations, attend seminars, and interact with the company's team of experts. The company also has showrooms in different regions globally, providing customers with a hands-on experience of its products and solutions.

Flowserve Corporation's multi-channel strategy ensures that its products and services are easily accessible to customers and clients, whether they are based locally or internationally. The company's well-established distribution channels, direct sales team, online channels, and showrooms play a critical role in delivering exceptional customer service, building customer loyalty, and driving the company's growth.

Customer Segments

Flowserve Corporation (FLS) primarily serves customers in the energy, oil and gas, chemical, water treatment, and general industries. FLS provides pump, seal, valve, and automation solutions to customers worldwide, helping them to improve their operational efficiency and reduce downtime.

• Energy: FLS serves customers in the renewable, nuclear, and conventional energy sectors. Its customers include energy producers, transmission companies, and utilities.
• Oil and Gas: FLS provides its products and services to customers in upstream, midstream, and downstream segments of the oil and gas industry. Its customers include exploration and production companies, refineries, and petrochemical plants.
• Chemical: FLS serves customers in the chemical manufacturing industry, including producers of basic chemicals, plastics, and specialty chemicals.
• Water treatment: FLS provides solutions for customers in the water and wastewater treatment industry, including municipal and industrial facilities.
• General industries: This segment consists of customers in various industries such as mining, pulp and paper, food and beverage, pharmaceuticals, and others.

FLS caters to various customer types, including OEMs (original equipment manufacturers), end-users, and service providers. The company provides customized solutions to meet the specific needs of each customer, depending on their unique requirements.

Cost Structure

The cost structure of Flowserve Corporation (FLS) is a combination of fixed and variable costs that are incurred in the process of providing high-quality flow control solutions to its customers. The cost structure includes the following:

• Cost of goods sold (COGS): This includes the direct costs associated with the manufacturing of Flowserve's products, such as raw materials, labor, and overhead costs. The COGS is the highest cost incurred by the company and is typically variable depending on the volume of production.
• R&D Expenses: As a technology-based company, FLS incurs significant research and development expenses for the development and improvement of its products. These costs are fixed and essential for maintaining the competitiveness of the company in the market.
• Sales and Marketing Expenses: This includes the expenses for advertising, promoting, and selling the company's products. The cost structure includes salaries, commissions, and travel expenses for the sales and marketing team.
• General and Administrative Expenses: These are the expenses incurred for the day-to-day operation of the company, such as salaries, rent, utilities, and other administrative costs.
• Warranty Expenses: FLS provides warranties for its products, which incurs a cost and is typically a variable cost based on the volume of sales.
• Depreciation and Amortization Expenses: FLS incurs this cost as a result of distributing the cost of its long-term assets over their useful lives.
• Interest Expense: This includes the cost of borrowing money to finance the company's operations.

Overall, the cost structure of Flowserve Corporation is designed to maintain operational efficiency while providing high-quality flow control solutions to its customers. The company continually seeks to optimize its cost structure to increase profitability and maintain a competitive advantage in the market.

Revenue Streams

Flowserve Corporation generates revenue through the following streams:

• Product Sales: Flowserve Corporation designs, manufactures, and sells industrial flow-management equipment to customers in various industries, such as oil and gas, chemical, power, and water treatment. This revenue stream includes sales of pumps, valves, and seals, among others.
• Service and Aftermarket: This revenue stream includes services such as installation, repair, and maintenance of the products sold by Flowserve Corporation. The company also offers aftermarket parts and upgrades to existing products to enhance their performance and prolong their lifespan.
• Engineering, Procurement, and Construction: Flowserve Corporation also provides engineering, procurement, and construction (EPC) services to clients. This revenue stream includes designing and constructing large-scale projects, including oil and gas pipelines and power plants.
• Licensing: Flowserve Corporation generates revenue by licensing its patented technology to other companies.
• Consulting and Training: Flowserve Corporation provides consulting services to clients in areas such as system optimization, process design, and asset management. The company also offers training programs to customers, including courses on equipment operation and maintenance.

Conclusion

After analyzing the business model canvas of Flowserve Corporation, it is evident that the company has a strong competitive advantage in the industrial manufacturing sector. The company's focus on innovation, quality, and customer service has enabled it to establish itself as a leader in the industry.

The company's primary revenue streams are derived from product sales, services, and aftermarket parts, which have been consistent over the years. The company's global footprint, diverse product offerings, and R&D investments provide numerous opportunities for organic growth and acquisition prospects.

As a result, Flowserve Corporation has the potential to enhance its market share, expand its customer base, and increase profitability in the years to come. The company's strong financial position, experienced management team, and commitment to sustainable practices, make it an ideal long-term investment option for potential investors.

• Flowserve Corporation's strengths:
• Strong brand recognition in the industrial manufacturing sector
• Global footprint and diverse product offerings
• Quality products, exceptional customer service, and after-sales services
• Focus on innovation, R&D, and sustainable practices
• Experienced management team and a strong financial position
• Opportunities for Growth:
• Expanding its customer base and market share
• Acquiring complementary businesses and technologies
• Increasing focus on emerging markets and new product offerings
• Investing in digital technologies and automation to reduce costs and improve efficiency