Uploaded by JOEL JOHNSON

Husky Strategic Planning: Injection Molding Systems

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Husky
Strategic Planning:
Husky Injection Molding Systems
October 22, 2012
Take 2 Consulting Group
Agenda
1
2
3
Summary of
Framework
Statement of
Intent
Presentation of
Alternatives
4
5
6
Recommended
Action Plan
Implementation
Strategy
Risks and
Contingencies
Five Forces Analysis
Industry:
Injection Molding Machine
Threats of Entry & Power Levels: High
High Threat of Entry
High BP Suppliers
High BP Buyers
Low Threat of Substitutes
High Rivalry Among Competitors
Preliminary Analysis
Willingness to Pay [Thinwall System]:
Preliminary Analysis
Willingness to Pay [Preform System]:
Current Strategy
Industry:
Injection Molding Machine
Competitive Advantage Source: Differentiation
Classic Differentiator
Innovative products
Operate more efficiently
Serve a niche market
Price Premium
Value communicated through sales force
Statement of Intent
Goal:
To determine Husky’s best course of
action to ensure continued success
despite a short-term soft market.
Presentation of Alternatives
1
Increase competition with Nestal by lowering
machine prices to 20% of current markup.
2
Hold prices constant while introducing a leasing
program for firms unable to finance new capital.
3
Increase machine prices to price of indifference,
eliminating differentiator status.
Baseline Analysis
Industry Demand Forecast for Husky Products:
Baseline Analysis
Baseline Scenario KPIs [No Action]:
Analysis of Option 1:
Increases demand
Perpetuates detrimental price war
Boosts sales in a trying year
Option 1 KPIs:
Analysis of Option 2:
Focuses sales pitch on benefits rather than price
Allows firms low on cash to invest in machinery
Spreads machine revenues over multiple years
Option 2 KPIs:
Analysis of Option 3:
Increases profit margin overall
Negatively impacts market share [Decrease in QD]
Risky strategy in a tight market
Option 3 KPIs:
Recommendation
2
Hold prices constant while introducing a
leasing program for firms unable to finance
new capital.
Implementation Short-Term
0-6 Months:
Implement leasing option
Formulate credit terms & lease-to-buy terms
Institute training seminars for sales force
Prepare them to better communicate value
Design new compensation plan for sales force
Prioritize lease contracts & whole-system
sales
Implementation Short-Term
6-12 Months:
Continue to expand leasing program
Redirect marketing to support leasing options
Continue with heavy R&D Expenditures:
Reduction of resin use & overall waste
Energy efficiency & life cycle design
Systems engineering
Redesign sales force compensation plan
Utilize AMC to build cross-functional synergies
Implementation Long-Term
1-5 Years:
Continue to direct marketing
funds to support leasing initiative
Plan partnerships between AMC
& technical research universities
Continue R&D investment with add’l funding
for energy efficiency & alternative energy use
Focus design on leading the industry in
quality, low waste, and energy efficiency
Implementation Long-Term
5-10 Years:
Maintain R&D & AMC educational partnerships
Utilize for advanced training of sales force
Formulate & implement sustainability goals
Expand current CSR initiatives
Position Husky product lines & systems as
sustainable solutions
Consider strategic acquisitions of smaller
preform PET or thinwall injector manufacturers
Contingency Plan
1
Demand does not strengthen in the near future.
Lease option allows greater flexibility for
financially constrained buyers.
Redirecting marketing towards leasing supports
continued cash flow.
New focus on systems solutions opens up new
markets and forms of revenue.
Contingency Plan
2
Prolonged Resin cost increases at greater rate.
Investment in low resin
technology and low waste design
hedges against increases in price.
Can also use this efficiency to
further differentiate product
line from competitors
Contingency Plan
3
Competition enters preform or thinwall market.
Continue innovating through efficiency and whole
system solutions to differentiate Husky lines.
Further emphasize Educational Partnerships:
Build brand loyalty by training students on
Husky products
Provides path to employment for engineers
Concluding Remarks
Thank you for your time.
Any Questions?
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