Husky. Strategic Planning: Husky Injection Molding Systems. October 22, Take 2 Consulting Group

Transcription

1 Husky Strategic Planning: Husky Injection Molding Systems October 22, 2012 Take 2 Consulting Group

2 Agenda Summary of Framework Statement of Intent Presentation of Alternatives Recommended Action Plan Implementation Strategy Risks and Contingencies

3 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

4 Preliminary Analysis Willingness to Pay [Thinwall System]:

5 Preliminary Analysis Willingness to Pay [Preform System]:

6 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

7 Statement of Intent Goal: To determine Husky s best course of action to ensure continued success despite a short-term soft market.

8 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.

9 Baseline Analysis Industry Demand Forecast for Husky Products:

10 Baseline Analysis Baseline Scenario KPIs [No Action]:

11 Analysis of Option 1: Increases demand Perpetuates detrimental price war Boosts sales in a trying year Option 1 KPIs:

12 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:

13 Analysis of Option 3: Increases profit margin overall Negatively impacts market share [Decrease in QD] Risky strategy in a tight market Option 3 KPIs:

14 Recommendation 2 Hold prices constant while introducing a leasing program for firms unable to finance new capital.

15 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

16 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

17 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

18 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

19 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.

20 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

21 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

22 Concluding Remarks Thank you for your time. Any Questions?