Husky Injection Molding free essay sample

What is Husky’s strategy? Using the value-based strategy terminology, articulate the basic logic of Husky’s position. Using an activity map or value chain, show whether (and if yes, how) the choices Husky made in different activities reinforce each other and that logic. Husky’s strategy is differentiation. They build the best injection molding machines(medium-tonnage) and also they give customers a fully integrated system of mold, machine, and product-handling equipment, as well as specialized expertise. Advantage of the company is their additional support that remained unmatched by their competitors. This differentiation includes: †¢Product/service attributes, †¢Relations between a firm and its customers, †¢Relations between the activities which Husky offer to its customer, †¢Links within and between firms. Value chain analysis; According to ‘creating competitive advantage’ article we have to analyse Husky containing the subjects which is shown in Figure 1. Figure 1 †¢INBOUND LOGISTICS; Machines: The bulk of Husky’s sales were in the medium tonnage class for the injection molding machine. We will write a custom essay sample on Husky Injection Molding or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page It was most dedicated to the PET preform and thinwall applications. The company held shares in the rest of the medium and large tonnage markets, where it made customized machines for particularly demanding applications. Molds: Husky made molds only for PET preforms, thinwall and other containers and closures such as bottle tops. Husky had formed alliances with a set of mold makers to provide customers with integrated systems. Hot Runners: It is a highly engineered system of manifolds and nozzles designed to channel hot resin into the cavities of the mold. They not only produced hot runners but also sold hot runners to other mold makers. Robotics: Husky produced robots which removed plastic parts from molds, sorted them, packaged them and stacked them. The company made robots both for Husky machines and for machines made by others, thought its robots were most easily and thoroughly integrated with its own machines. Prices ranged from $60000 to $250000 per robotic system. †¢OPERATIONS; Similar to other makers of large, sophisticated machines, Husky operates in a job-shop setting, assembling customized machines from modules. In contrast, smaller machines are often produced on assembly lines. Husky’s choice of production mode is obviously related to the customization. it offers its buyers. Its automated mold production is very different from how mold makers operate. The case also notes that machines are made using expensive specialized equipment. As a result, Husky produces only 200-300 per year. Husky took a modular approach to system design and construction. With the help of sales people, customers selected from building blocks: injection units, clamps, controls, bases, robots. Husky then assembled the systems to order. The company tracked the production methods and products of its rivals closely but had not analyzed their costs in detail. Husky’s managers believed that the company incurred higher unit costs than competitors in many product lines, but in some, their investments made them more efficient. †¢OUTBOUND LOGISTICS; Husky begun to build Technical Centers in key locations to provide local technical support and training. Centers were open in Atlanta, Los Angeles, Luxembourg, and Japan, and additional centers were slated for other locations. Husky had deployed a system to ship spare parts to any location quickly. A distribution center in Buffalo, New York, stocked 22000 different items, including components for machines built in the early 1960s. †¢MARKETING SALES; Husky deployed 300 people in 24 regional offices in 17 countries to find and serve customers in more than 70 countries. Husky sold exclusively via its internal sales force and gave general managers in each region for both the local sales force and the local service technicians. Husky was known for charging a premium for its products. The Husky thinwall system described above might be priced at $400000 versus $350000 for a competing system. Husky charged roughly $1.2 million for the preform system while rivals might ask for $1. 0 million. †¢SERVICE; They took sales and service activities together. Husky deployed 300 people in 24 regional offices in 17 countries to find and serve customers in more than 70 countries. Husky begun to build Technical Centers in key locations to provide local technical support and training. Centers were open in Atlanta, Los Angeles, Luxembourg, and Japan, and additional centers were slated for other locations. Husky promoted itself as a supplier of complete factory solutions for the plastics industry rather than a simple vendor of equipment. The company began in the 1990s to plan injection molding facilities for its customers, train customers, integrate production systems, and produce turnkey factories. †¢PROCUREMENT; Husky might audit and certify a mold maker’s operations, recommend a mold maker to a company buying a machine, or buy and resell the molds of a particular mold maker. A mold maker might in turn buy a Husky machine to operate in its test room and might purchase hot runners from Husky. Husky â€Å"relied almost entirely on components purchased from outside vendors†, whereas most other machine makers â€Å"produced many of their components in-house†. This seems slightly at odds with the rationale given above for producing a broad line of products; one might think that Husky’s high-performance systems also requires specialized components that need to be produced in-house. But apparently those components are pretty standard products (and hence better outsourced), what Husky focuses on instead is design and assembly. †¢TECHNOLOGY DEVELOPMENT; Husky managers prided themselves on their willingness to take on the toughest technical challenges and their ability to bring new technologies to the market rapidly. Schad had invested $25 million in the early 1990s to build Husky’s Advanced Manufacturing Center. It was given a mandate to create the injection molding factory of the future. New molding systems were operated in a controlled 24 hour production environment. †¢HUMAN RESOURCE MANAGEMENT; Deeply imprinted on the firm were Schad’s personal values. His concern for the environment, devotion to personal health(heavily-used fitness and wellness center employed a nauropathic doctor, chiropractor and a massage therapist. Cafeterias promoted vegetarian meals and offered no junk food. Smoking was banned. Child care center featured airy play spaces, heated hardwood floors, the latest learning technology, high staff-to-child ratio and extended hours. ), dedication to hard work(the long hours of the child care center not only showed concern for its people but also its expectation is that they work hard. ), egalitarianism(An employee council, in operation for more than 25 years met regularly with Schad to air concerns openly. Everyone called each other by first name, no parking spaces reserved, all cafeterias and washrooms shared and casual dressed was required. Schad noted that everyone call him Robert, his frist name, and if they didn’t it would be a $5 fine and the proceeds were donated to charity. ), and perfectionism. †¢FIRM INFRASTRUCTURE; Husky was a privately held company, Robert Schad and his family held 65% of the company’s stock. Key employees designated by the senior management team, were permitted to buy non-voting shares, and collectively, they owned 25% of the company. To be identified as a key employee, an individual had to demonstrate strong leadership potential and possess knowledge that could not readily replaced. Komatsu, the Japanese equipment maker, held the remaining 10% of the company, obtained when Husky was in need of capital in 1990. 2)Are Husky injection molding systems worth the price premium? (Hint: Try to calculate a customer’s WTP for Husky’s product. To do so, consider a customer who wants to make as many plastic products as a Husky system can make in a year. At what price point would this customer be indifferent between Husky and a competitor? That’s the WTP for the Husky system.