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Hutech- OMU Graduate Program October 4, 2011

Dr Tran AnhDung

Case Study: Hyflux

Company Profile
Founded in 1989 by CEO, Ms. Olivia Lum, Hyfluxs initial business activities revolved around providing water treatment through purchase of traditional membrane technology(MT) from other companies. However through intensive research and development (R&D), Hyflux moved to designing, manufacturing and selling its own membranes. Today Hyflux is considered a leading regional player in the water treatment industry and ranked by Forbes Global Magazine as the Worlds 200 Best Small Company in 2002. Hyflux Strategy Hyfluxs vision is to be a world leading water treatment company. 1 Hyflux developed a 3 pronged approach to achieve its mission. This overarching modus operandi is done through the means of differentiation through in-house development of superior MT, global expansion by venturing into different markets where profitable and through key alliances which buttress the overall strategy. From this approach, they formulated a business strategy of Differentiation leadership for their products and an Incrementalist approach towards expansion policy. Technology strategy concurrently plays a key cornerstone role in the entire business strategy by providing its core strength of MT.

http://www.hyflux.com/hyflux_vision.html

Hutech- OMU Graduate Program October 4, 2011

Dr Tran AnhDung

Business Strategy
Differentiation Leadership According to Mr. Freddy Soon, Senior Vice President of Hyflux, a strategy of differentiation is used to separate themselves from the pretenders. First Mover Advantages To differentiate, Hyflux quickly identified MT and purified water as a sunrise industry as it is an important commodity for both industrial and public use. Locally, its early analysis gave Hyflux the first mover advantage in which it seized the opportunity and became the leader industry. Quality and Customer savings Hyflux aims to enhance the quality, features and the deliverability of its products to differentiate itself. By focusing on process applications, attention to precision, quality control and reducing production time Hyflux been awarded accolades like the ISO9001:2000 quality award apart from its competitors. In-House Product & Process development Product wise, Hyflux developed its own customized membranes, water treatment technology and manufacturing equipment in-house. By not using subcontractors to build its production equipment it retains better control of the raw materials, manufacturing costs, quality of the product as well as the turnaround time. This is juxtaposed with its local competitors that merely bought and assembled end products like pipes and membranes off the shelf. Competitive pricing With Hyfluxs competitive advantage of in-house development of cheaper components, Hyflux is able to successfully win its tenders at competitive rates.

Hutech- OMU Graduate Program October 4, 2011 Alliances

Dr Tran AnhDung

To further enhance its leadership, Hyflux relies on a network of alliances to develop, produce and market its products. R&D alliances & Tech Alliances Hyflux partners with other companies and organizations to acquire better technology to enhance its R&D efforts. Marketing alliances In regional expansions, Hyflux builds partnerships with local companies to promote its products. This provides it with contextual knowledge to gain a foothold in the local market. Outsourcing alliances To enhance efficiency and cost effectiveness in its production, Hyflux outsourced its production to capitalize their partners competitive advantage. An example is the outsourcing of its production of Aquosus which, according to financial analysts2, will be an important future revenue source. Hyflux increased its current 500 units a month production capacity by outsourcing the manufacturing of component parts to Haier in China and the final assembly to Flextronics. This enabled it to concentrate on its core competency of membrane development while leaving production to companies which have the comparative advantage. Mr. Soon mentioned it is cheaper to outsource as the quality of the products will be guaranteed to be the same or even better before outsourcing. Thus outsourcing provides Hyflux with benefits of lower cycle time and internal investments.

http://www.gohdirect.com/

Hutech- OMU Graduate Program October 4, 2011

Dr Tran AnhDung

Global Expansion Incrementalist Strategy Hyfluxs expansion philosophy is based on an incrementalist strategy. According to Mr. Soon, in 5 years, the company aims to maintain Singapore, sustain China and grow Middle East. Accordingly to maintain focus, the company adopts an incremental expansion approach by having regular reviews and constant market analysis before expanding. This constant reassessment allows Hyflux to maintain market sensitivity and thus alter its objectives in reactively to stay ahead.

Consequently through its business strategy of differentiation, alliance formation and incrementalist policies, Hyflux seeks to maintain market leadership while developing products that have unique attributes, quality, precision and time-to-market benefits.

Hutech- OMU Graduate Program October 4, 2011

Dr Tran AnhDung

Technological Strategy
Hyflux places a huge importance on its technology strategy. The CEO co-ordinates the overall technological efforts of the company and is thus the effective CTO. Recently, 4 directors of technology where emplaced to support the strategy in the following fields: a. Research b. Development c. QC/QA Special Projects d. Membrane Production

Tech Strategy Niche player - Membrane


Hyfluxs technology strategy is to be a niche player in the field of MT. This can be seen in Hyfluxs focused efforts in developing the technology. . First Mover As a niche player in MT, Hyflux is adopting the first-to-market strategy through constant development of new innovative MT to stay ahead. This builds up their reputation as a pioneering producer while exploiting on their technological strength to create a competitive advantage. In-House Development To gain its MT, Hyflux carries out ongoing in-house R&D resulting in innovative products like Kristal300. Also, with control over the quality and supply of its product components, Hyflux is able to offer unique membranes customized for its clients, faster project turnarounds while reducing costs by up to 50% as compared its competitors. Technology Appropriation through Technology alliances

Hutech- OMU Graduate Program October 4, 2011

Dr Tran AnhDung

To appropriate further superior membrane technologies to enhance its niche leadership, Hyflux forms alliances with companies and research institutions. Joint Ventures Through joint ventures and partnerships with other companies Hyflux is able to develop better innovations as seen in the 2003 strategic alliance with Air2Water Inc which allowed Hyflux to combine its advanced MT with Air2Waters patented technology to produce the innovative Aquosus system which creates potable water from water vapour. R&D alliances Further, through R&D alliances, Hyflux is able to improve their MT. An example is the Memorandum for Collaborative Research signed with NTU to make Singapores first desalination plant. Supported by NTUs academic professors, research and technical staff and a comprehensive range of sophisticated scientific and research equipment, Hyflux is able to accelerate its growth in application techniques and development of more advanced MT for water reclamation. Specialized Facilities Production & Research Further, facilities wise, Hyflux possesses a wide array of manufacturing facilities to generate its products and water treatment systems. Additionally it is investing considerable resources in constructing new production facilities in Pudong, Shanghai to triple Hyfluxs production capacity in China. Adding on, Hyflux has state-of-art laboratories with sophisticated testing equipment that conduct R&D to improve their membranes and provide problem-solving procedures for their customers. Thus the technology strategy of Hyflux provides the with its core competencies to remain differentiated from its competitors by giving it namely the ability to create innovative, customized, quality and economical competitive membranes.