Husky Injection Molding Systems- Group 7

Husky’s Strategy

Husky’s strategy can be identified based on 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 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 both are valuable, rare, difficult to imitate and fully exploited by the organization. Their systems were known for speed, ruggedness, resin utilization, durability and automation. This advantage in the competitive dynamics leads to slow cycle market in which the competitive advantage is shielded from imitation and the advantages last longer.

2. Narrow market segment(Focussed Strategy):

The company particularly focussed on medium tonnage PET pre-form and thin 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 using the Husky injection moulding systems. This advantage was 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 despite of high price. This can be understood from the following calculations(Refer to attached excel sheet)

Husky Competitor

Exhibit 6

Preforms per cycle 48 48Cycle time (seconds) 10.4 11.8

Average operating hours per day 22.3 18.9No. of preforms produced per day 370523 276773

Average weight of preform 24.39 24.42total preform produced (Kg)per day 9037.06 6758.79

electricity savings per day (KWh) (0.137 KWh/kg preform produced) 1238.08

Cost saving in a year from electricity ($) (0.08 $/KWh) 36152

Exhibit 3

Resin cost as % of total cost 58% scrap cost as % of total cost 2% Scrap cost as % of resin cost 3.45%

Exhibit 11 Resin cost in 1995 ($/Kg) 1.65

Cost saving from 1% reduced wastage ($/kg) 0.056896552 cost savings in a year from 1% reduced wastage ($) 187675

Total cost saving (electricity+reduced wastage) ($/year) 223827

Total cost saving (million $/year) 0.223827

Approxiamte purchase price (million $) 1.2 1

Husky Injection Molding Systems- Group 7

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

Group Members- Himanshu Mittal(020)Dipti Jha(017)Shruti Mandal(050)Raghu Vamsi(035)Priyanka Chauhan(032)