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This study deals with product differentiation in the paper industry.

It seeks to
increase understanding of a product differentiation as a phenomenon, its drivers and
motives, supporting forces and barriers as well as value chain actors and their roles
in this process from a paper manufacturer's perspective.

Before, the Wausau Papers were not the competitive company selling papers
and other stuffs. Unlike other companies who made a name in pulp and paper
industry. Richard Radt being the new president has been the president in other
division so he can easily distinguish what is wrong with the company not being
known in the paper industry. He looked up in the monthly report and found out that
the main problem is the inertia meaning, their product only seeks to survive in paper
industry even though the initial advantage of this are no longer relevant. So Richard
Radt studied the possible reason why, and how to change the companys name in
the industry, on how to be a well known paper distributor of the paper industry and to
have a good profit in return.

By analyzing what strategy to make more profit, Richard Radt first works on
the main source of the problem to minimize the escalation of the problem. He
considered the factors that will benefit the people for having affordable papers for all
and provides high quality papers and made a very big improvement in the company.
Cost competitiveness is the most important success factor for a paper machine line
producing standard papers. Cost competitiveness can be lost for many reasons,
such as old technology resulting in lower production within available time and in
unacceptable quality, or unavailability and high price of production inputs such as
fibers, minerals, energy and manpower, or a distance and high transportation costs
and also high finance costs. And to easily distribute the product to the people, the
core unit of the company which is the Brokaw division sold the products to the large
merchants to the Midwest and sold it to smaller retailers to sell and to introduce it to
the market. Continuous development of paper manufacturing technology, especially
in the sub-processes of coating, but also by using new combinations of raw at a
lower price. Standard paper grades are interchangeable whereas differentiated
papers seldom are. The use of branding among papers is increasing. There is no
generally accepted or standardized paper grade classification. Instead, there are
many classifications in the global markets.
The customers of a paper firm are typically publishers, printers and/or
merchants. Richard Radt focuses on the outcome and to satisfy the consumers and
creating a big name is not easy. Consolidation and globalization are also ongoing
phenomena in the customer industries. This development supports the broadening of
the product range: global customers with their diversified paper needs want to deal
with global suppliers with a broad product offering.

A company is said to have a competitive advantage when it is implementing a


value creating strategy which is not simultaneously implemented by any current or
potential competitor. A firm is said to have a sustainable competitive advantage
when other existing or potential competitors are unable to duplicate it or it proves to
be too costly to imitate (Porter, 1985). When following a resource-based view of the
strategy, a firm's resource must be valuable in exploiting opportunities and/or
neutralizing threats, it must be rare, imperfectly imitable and there cannot be
equivalent substitutes for this resource in order to be sustainable (Barney, 1991).

Radt lowers the cost of the product and emphasizing the quality of the
product. Cost competitiveness is the most important success factor for a paper
machine line producing standard papers. Cost competitiveness can be lost for many
reasons, such as old technology resulting in lower production within available time
and in unacceptable quality, or unavailability and high price of production inputs such
as fibers, minerals, energy and manpower, or a distance and high transportation
costs and also high finance costs.

The advantage of selling bigger amounts of specialty paper to the big


merchants makes profits large and easily distribute to the market because of the
good quality they are making to ensure the satisfaction of the consumer and so that
many consumer will trust the product being used. The production of Brokaw in the
plant already produces high quality product quite efficiently so Radt focuses on the
color matching, paper cutting and packaging and reducing waste to avoid wasting a
large amount of product that can be used. Brokaw installed additional computerized
process control system that can make other employees work less heavy and added
new finishing lines. Even though they are having small plantation, they have so much
sophisticated process control capability.
Environmental friendliness and minimum use of resources are also important
competitive factors. The former is an important element in a good corporate
citizenship and saving the lives of many. The latter has an impact on image and is
important as a cost factor. To be a low cost producer in the paper industry requires
low cost and abundant fiber supplies, energy supplies, control of timberlands and
global sites. A low cost producer is also dependent on the availability of a certain
type of fiber and also prescient investments in addition to economies of scale.
Investments in new technology are vital in order to guarantee high efficiencies.
Capital reinvestments are one of the few critical success factors which management
can control and which determine a company's own availability to earn costs of capital
over a cycle.

To get a competitive advantage from an investment requires a manufacturer


to have a broad skills, capabilities and knowledge base or access to those
resources. Environmental Disadvantages, increased reuse of process water may
result in higher hazardous air pollutant emissions. Metal concentrations increase as
process water is reused, and can affect the process. Increased reuse of process
water may result in higher hazardous air pollutant emissions. Metal concentrations
increase as process water is reused, and can affect the process. Radts team
made a target that in every order of the merchant; it would be 96% or better even
though they not require the merchants to take an entire truckload in every delivery.
The team was very competitive in every aspect and every employee in the company
works on full enthusiasm that they would have been the best of all their competitors.
And for the customers satisfaction, they proposed the high quality papers with low
and affordable price to make it easier for everyone to have it. The satisfaction of the
merchants was fulfilled for being satisfied for the actions and doings of the company
regarding to the product being delivered on time.

Regarding to the problem being solved, the advantage of this is you were
globally competitive to the market but then theres a problem occurred that they
cannot provide the products to one merchant being delivered daily. This wont solve
if they increase the price of the other papers at the same time they would launch a
specialty paper with the same price as the other resellers price. By realizing that
Brokaw really cant afford to transport daily the products, it is good to sell the
products directly to the market to avoid transporting daily.
This concept begins with a vision and commitment to a long-term goal that
should guide all decisions about the direction of both the mill operations and the
selection of manufacturing technologies. In vesting in manufacturing processes that
pre vent pollution and practicing good environmental management go hand-in hand.
So by installing so much process control system, the control of producing would
reduce the product being a waste and by recommending Brokaw to leave the truck
even if it was not full, it has to transport the products in the nearby areas around and
transport bigger amounts through some overnight delivery service that can
accommodate the bigger amounts to send. By implementing this process, Wausau
Paper operates in a very price-conscious market which makes it difficult to maintain
profit margins. The company decided to develop strategic relationships with key
customers through a value delivery framework. Salespeople focus on collaborating
with customers to increase sales through marketing innovations and to reduce costs
through supply chain efficiencies. Wausau would like to generate 35 percent of its
sales from these strategic relationships. Achieving this objective requires a number
of changes in sales management. The company focuses on hiring experienced
salespeople with strong business acumen, trains them to run their sales territory as a
business, ad compensates them based on a variety of business-related metrics.

The strategy is implemented through a sales-and-service model where


salespeople spend most of their time with existing customers. The salespeople
install systems, make sure the customers equipment is working properly train
customer employees, audit results, and solve customer problems. The operational
agility strategy focuses on developing a capability to react nimbly and to reconfigure
characteristics of products and the supply chain to meet emerging customer needs.
Companies using this strategy focus on capturing the premium for being early to
market. Typically, companies using an innovation strategy supported by an
operational agility strategy consider product development and consumer insight to be
core strengths.

The potential problem that can occur during the process is by repairing
damaged machines that can be a cause of delay once it occurred. In terms of
delivering, the problem will be caused by the producer if the produced product did
not meet the required amount to be made. The trucks which will transport to the
other merchants that may occur the problem regarding to the trucks if the trucks
were not in good condition. In order to keep the promise to the customer, they would
have to leave even if the truck is not full load. But what about other merchants who
were four hundred miles or more away to the plant, the company will cooperate with
other delivery company to deliver the said products to the merchants. But the
problem occurs in this situation it that, if they dont deliver the products before the
cutoff of the delivery service, this will cause so much delay to the papers.

The alternative plan is to send products to a delivery service wherein they can
deliver big amount of papers directly to the merchant even though they pay big
amount, they minimize the use of trucks and they can deliver it on time without
worrying what other merchants say. Providing products faster to consumers enables
speed-focused companies to charge premium prices. In order to use this strategy
effectively, collaboration throughout the supply chain is essential. The product needs
to be tracked and managed throughout its progression along the chain to the final
consumer. For a company selling through traditional channels, there is the additional
risk that employing a speed strategy, and heightening consumer awareness of
freshness, increases vulnerability to competitors selling directly.

In contrast to revenue-enhancing supply strategies, the logistics optimization


strategy primarily works the cost lever of the value framework. This strategy focuses
on reducing overall supply chain costs, allowing higher margins at lower selling
prices. They can invest on more trucks to deliver but, they have to add more
employees to operate the trucks to deliver the products on time. At the same time,
they can save more time in order to do more work.