Husky’s Strategy Husky’s strategy can be identified based on classification classification according to the target market and
customer value. The analysis is based on the business to business markets. Their strategy falls under Focussed differentiation due to following reasons: 1. Distinctiveness(Differentiation Distinctiveness(Differentiation Strategy): Husky machines were of the highest quality in the industry and they provided complete factory solutions to the customers. As per the VRIO framework framework both are valuable, rare, difficult to imitate and fully exploited exploited by the organization. Their systems were known for for speed, ruggedness, resin utilization, durability and automation. This advantage in the competitive dynamics leads leads to slow cycle market in which the competitive advantage advantage is shielded from imitation and the advantages last longer. 2. Narrow market segment(Focussed Strategy): The company particularly focussed on medium tonnage tonnage PET pre-form and thin t hin wall applications and was able to establish itself as the leading firm in the pre-form and thin wall niche. By 1995, 60% of the pre-forms were manufactured manufactured using the Husky injection moulding systems. This advantage was moderately moderately difficult to imitate since many companies had already entered the market. In competitive dynamics, it leads to a standard cycle markets where Husky has to continuously upgrade its capabilities for sustainable competitive advantage. The company has been able to sustain their competitive advantage advantage despite of high price. This can be understood from the following calculations(Refer to attached excel sheet)
Exhibit 6
Exhibit 3 Exhibit 11
Preforms per cycle Cycle time (seconds) Average operating hours per day No. of preforms produced per day Average weight of preform total preform produced (Kg)per day electricity savings per day (KWh) (0.137 KWh/kg preform produced) Cost saving in a year from electricity ($) (0.08 $/KWh) Resin cost as % of total cost scrap cost as % of total cost Scrap cost as % of resin cost Resin cost in 1995 ($/Kg) Cost saving from 1% reduced wastage ($/kg) cost savings in a year from 1% reduced wastage ($) Total cost saving (electricity+reduced (electricity+reduced wastage) ($/year) Total cost saving (million $/year) Approxiamte purchase price (million $)
From the above calculations, it is evident that cost savings only from electricity and pre-form wastage reduction is $0.22 Million while the premium charged by the company is $0.2 Million. So, direct savings are sufficient to cover the premium charged within one year.
Additional benefits (higher output) due to low cycle time provide the processors to meet the demand in the peak scenarios. The company’s strong values as well as their ability to bring new innovations in technologies
through R&D have helped them sustain their competitive advantages over others.
Their strong service force and sales team helped maintain strong customer service and good relations with the customers
