Husky

Strategic Planning:
Husky Injection Molding Systems
October 22, 2012

Take 2 Consulting Group

Agenda
1

Summary of
Framework

Statement of
Intent

Presentation of
Alternatives

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 Huskys 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 addl 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?