K J Somaiya Institute of Management Studies and Research

Mumbai

2016-2018

Strategic Management

Case study Assignment

On

Husky

Submitted to
Prof. Rushi Anandan

Submitted by

Ankit Balyan (1)

Maneesh Gondesi(15)
Sharan Mangal (34)
Neeraj Sharikkal (52)

PGDM- Core (B)

1. Investigate Husky's variety - based and need-based positioning. How does the choice of
positioning give it a competitive advantage?

Husky provided a wide variety of products, however, the same was based on customer segments.
Hence, we can say it followed Need-based positioning.

Need based positioning:

The primary reason for Huskys success, since the end of the 1970s until 1995, is the polyethylene
terephthalate (PET) industry niche to which the company focused itself at that time. The focus on the
PET technology was accompanied with a shift of the soft drink makers to the plastic bottles usage.

Husky positions itself as a company providing its plastic industry customers with the complete and
comprehensive manufacturing solutions. This strategy is implemented by producing machines based
upon technological innovation, durability, reliability and efficiency on one hand and by providing its
customers with a professional, reliable and quick service, based on highly trained technician on the
other hand.

competitive advantage:

The delivery of high technologic machines with both characters of speed and efficiency positioned
Husky as the leader of this niche. This was actually achieved by placing high obstacle for competitors
to get into this niche with compatible products and by eliminating the bargaining ability of the
customers, due to the top performance of its products relatively to the competitive ones and the
worldwide professional service.
2. In which parts of the value chain does Husky focus on creating value?

Primary Activities:

a. Inbound logistics:
Machines: the bulk of Huskys sales were in the medium tonnage class for the injection molding
machine. It was most dedicated to the PET preform and thin wall applications. The company held
shares in the rest of the medium and large tonnage markets, where it made customized machines for
particularly demanding applications.

Molds: Husky made molds only for PET preforms, thin wall and other containers and closures such as
bottle tops. Husky had formed alliances with a set of mold makers to provide customers with
integrated systems.

Hot Runners: It is a highly-engineered system of manifolds and nozzles designed to channel hot
resin into the cavities of the mold. They not only produced hot runners but also sold hot runners to
other mold makers.

Robotics: Husky produced robots which removed plastic parts from molds, sorted them, packaged
them and stacked them. The company made robots both for Husky machines and for machines made
by others, thought its robots were most easily and thoroughly integrated with its own machines. Prices
ranged from $60000 to $250000 per robotic system.

b. Operations

Husky took a modular approach to system design and construction. With the help of sales people,
customers selected from building blocks: injection units, clamps, controls, bases, robots. Husky then
assembled the systems to order. The company focused on design and assembly, and it relied almost
entirely on components purchased from outside vendors. The company tracked the production
methods and products of its rivals closely but had not analysed their costs in detail. Huskys managers
believed that the company incurred higher unit costs than competitors in many product lines, but in
some, their investments made them more efficient

c. Outbound logistics

Husky begun to build Technical Centres in key locations to provide local technical support and
training. Centres were open in Atlanta, Los Angeles, Luxembourg, and Japan, and additional centres
were slated for other locations. Husky had deployed a system to ship spare parts to any location
quickly.

d. Marketing & Sales

Husky deployed 300 people in 24 regional offices in 17 countries to find and serve customers in more
than 70 countries. Husky sold exclusively via its internal sales force and gave general managers in
each region for both the local sales force and the local service technicians.

Husky was known for charging a premium for its products. The Husky thin wall system described
above might be priced at $400000 versus $350000 for a competing system. Husky charged roughly
$1.2 million for the preform system while rivals might ask for $1.0 million.
 e. Service

Husky begun to build Technical Centres in key locations to provide local technical support and
training. Centres were open in Atlanta, Los Angeles, Luxembourg, and Japan, and additional centres
were slated for other locations. Husky had deployed a system to ship spare parts to any location
quickly.

Value-added services: Husky promoted itself as a supplier of complete factory solutions for the
plastics industry rather than a simple vendor of equipment. The company began in the 1990s to plan
injection molding facilities for its customers, train customers, integrate production systems, and
produce turnkey factories. Fees were a small part of Huskys revenue

Support Activities:

a. Procurement

Husky might audit and certify a mould makers operations, recommend a mould maker to a company
buying a machine, or buy and resell the moulds of a particular mould maker. A mould maker might in
turn buy a Husky machine to operate in its test room and might purchase hot runners from Husky
b. Technology

Husky managers prided themselves on their willingness to take on the toughest technical challenges
and their ability to bring new technologies to the market rapidly. Schad had invested $25 million in
the early 1990s to build Huskys Advanced Manufacturing Center. It was given a mandate to create
the injection molding factory of the future. New molding systems were operated in a controlled 24-
hour production environment.

c. Human Resource Management

Devotion to personal health: Heavily-used fitness and wellness centre employed a neuropathic
doctor, chiropractor and a massage therapist. Cafeterias promoted vegetarian meals and offered no
junk food. Smoking was banned. Child care centre featured airy play spaces, heated hardwood floors,
the latest learning technology, high staff-to-child ratio and extended hours.

Hard work: the long hours of the child care centre not only showed concern for its people but also its
expectation is that they work hard.

Egalitarianism: An employee council, in operation for more than 25 years met regularly with Schad
to air concerns openly. Everyone called each other by first name, no parking spaces reserved, all
cafeterias and washrooms shared and casual dressed was required. Schad noted that everyone call him
Robert, his first name, and if they didnt it would be a $5 fine and the proceeds were donated to
charity.

D. Firm Infrastructure

Husky was a privately held company, Robert Schad and his family held 65% of the companys stock.
Key employees designated by the senior management team, were permitted to buy non-voting shares,
and collectively, they owned 25% of the company. To be identified as a key employee, an individual
had to demonstrate strong leadership potential and possess knowledge that could not readily replaced.
Komatsu, the Japanese equipment maker, held the remaining 10% of the company, obtained when
Husky was in need of capital in 1990.