Generac astutely commandeered the clear leadership position in home standby generators during the late 1990s and after the start of the millennium. In so doing, it developed an expertise in engines optimized for burning natural gas or propane, such as its 2-cylinder OVHI 1,000 cc displacement engine that can deliver 16 kW of standby power, as well as by making transfer switches and other related technologies. Moreover, it has structured its supply chain to optimize a position as an “asset light” assembler that can nevertheless exert control over its intellectual property. But home standby is a niche market, and management has not wanted its growth constrained. It has used M&A to forge ahead into the commercial & industrial markets, historically the domain of entrenched leaders Cummins Onan and Caterpillar. It has also become a leader in tower lighting, for which it does not even make engines. It has also reentered the small-engine portable generator space, and developed a line of power washers. In this segment, Stocks-in-Depth examines the competitive dynamics affecting Generac in its usual granular and entertaining style, providing cameos of several surprisingly profitable innovators against which Generac must wrestle away market share to succeed.
